Executor Selling Property.
May 2018. For an executor, one of the big jobs is organising the sale of the property. Here is an easy way of taking that stress and potential liability away from you. But if not, here are a few ways to make things easier, and a few warnings. You should read through all of this page before acting or things could go badly wrong. But do make sure the property is insured as most policies will be invalidated if a property is left empty, and the owner (who insured it) has died – unless you comply with the insurers’ strict conditions and have notified them swiftly.
1) When can the executor sell the property?
Firstly, if the property is already in Trust, it may be nothing to do with the executor of the Will. The Trustees will be in charge of the property and deciding what to do with it. In most cases, the executor will still need to check the situation with a view to including the relevant proportion of the value of the Trust in the estate and completing the IHT forms which are needed where a trust exists. If this is the case, you are much better to contact us than attempt to deal with it yourself. If you get it wrong, it will be expensive.
Back to the question though: the executor cannot actually sell the property until probate has been granted, as before that they do not have the authority to sign the sales contract. That doesn’t mean you can’t put it on the market, but potential buyers may be put off if probate takes longer than one would hope. Or worse, it may turn out that the executor does not have the right to sell at all, perhaps through clauses in the Will.
2) Can the executor sell the property without the beneficiaries approving?
Unless the Will says something to the contrary, or there are complications because a third party lives in the property, beneficiaries have no special rights. They do have the right to sue the executor if the house is sold for less than a reasonable market value, and to make life difficult for the executor, so an agreement is best. But if one beneficiary benefits more than they should – perhaps by paying less than full market value, you are in trouble again. Proceed with caution, and if you think arguments are likely, it may be time to hand the work over to us so we can do the right thing and take the complaints rather than damage the family by making yourself the bad one!
3) Did the deceased actually own all of the property?
Another issue which can prove disappointing is where the deceased either no longer owned the house, perhaps having sold it in full or part to get more income or capital. Or they could have taken out Equity Release for the same reason and only own part of the property. Step 6 will help confirm property ownership. Some people’s expectations will sadly be disappointed. Or they owned it jointly with another person who may automatically inherit full ownership irrespective of any Will.
4) Get competitive quotes from multiple estate agents.
This firm will (at no extra cost to you) organise that side for you, so you can start looking at competitive commission rates which could save thousands.
5) Obtain several valuations of the property.
Have a chat with the top 3 agents produced in step one, and if you like the sound of them, ask them to value the property, with an asking price and the minimum price they think you should accept. Be wary of firms giving high valuations just to gain the instructions – executors sales are very popular with agents as they are certain to sell. Many other homes go on the market, then the sellers change their minds have spent lots of the agents time and money. An executors sale property WILL be sold.
You might want to suggest to agents that you will take the property away from them if they suggest going below the minimum valuation. That should make it more realistic, and show you just how high they are pitching the asking price as compared with what they think they will get for you. The bigger the gap between the two, the less confident that agent is of getting a price near the top of the range. They still might, but it is less likely, and as executor you need to balance the interests of the beneficiaries in selling reasonably soon, and your duty to get a fair price. Some agents will try to beat the price down so they get a certain sale in days, sometimes to a crony who may be paying well below market price. We would never recommend getting just one valuation.
6) Presentation of the Property.
Ask the agent to suggest any modest improvements which would increase the property. It is often worth spending a few hundred pounds on minor repairs and improvements. Too often people take on look at an untidy front garden or paint peeling off the front door and walk away without even going in. But it is surprising how many people want to buy a property they can do up. Unless the property sells very quickly, you may need to organise lawn mowing etc.
7) Check that the property is registered at the Land Registry.
If it is, then the legal process of selling it should be fairly easy (and inexpensive.) You can normally tell even without paying a few pounds for the actual Title documents – if it comes up, unless it says to the contrary, it is registered. That said, very often the title will not have been transferred to the survivor after the first death (if it was a couple), or a trust set up by the Will of the first to die may not have been implemented. So the Legal Title may need tidying up at the earliest possible moment, to save delays later on, which could cause the loss of a sale.
The Title Register is the document you need to see, to determine who owns the property and if there is a debt registered against it, such as a mortgage.
Homes in Probate and dealing with property.
Dealing with a deceased person home in probate (or other property such as buy to lets) is something which can bankrupt an executor if not handled properly. Here are some of the things which can go wrong or just need to be done in some cases (go to the bottom of the page for an easy solution.)
- The insurance conditions are not complied with and the house burns down, or is flooded, or is broken into and vandalised. The executor could be liable.
- The insurance company wants the property inspected on a regular basis to maintain cover, and you live miles away and don’t have the time.
- The local estate agents valuation is challenged by the Taxman who considers the valuation fraudulent and wants to impose financial penalties.
- Some of the beneficiaries think the valuation is designed to line the pockets of the executor or a friend.
- Energy Performance Certificate required to sell.
- Valuation Appraisal (section 160 of IHT Act Compliant) or should it be an RICS Valuation Survey or RICS Homebuyers Survey.
- Electrical Safety Report
- Gas Safety Certificate
- Boiler Service.
- Damp & Timber Survey
- Drain Survey
- Wall Tie Report
- Change of locks (an important issue often missed – at the executors’ peril.)
- Securing vacant property
- Property Inspections
- Vacant Property Insurance.
- Vehicle Disposal
- Tree Risk Assessment
- Japanese Knotweed Report.
- Property Clearance
- Cleaning & Gardening maintenance
- Drain down of heating & plumbing system
- Re-decoration works.
If you just want to make life easy, send off the enquiry at the bottom of the page. You will soon get a call from a firm who can solve all of these problems!
Can a property be sold before probate is granted?
If the property is held by joint tenants with survivorship, the interest of a deceased owner automatically gets transferred to the remaining surviving owners on presentation of a death certificate, so many of the problems here will not arise. The surviving joint tenant can normally sell the property immediately.
But often homes are in the name of a single person or are tenants in common which means that each person owns a specified share. With either of these, a sale cannot be completed until probate has been granted, whether or not there was a valid Will.
Some far-sighted folk have put their property into a lifetime trust and here the Trustees are in a position to deal with the property immediately – though there is no guarantee there will not be Inheritance Tax to pay as it will generally be included as an estate asset for tax purposes, so advice here is a bit specialist and not the purpose of this article.
Can a property be marketed before probate is granted?
Yes, it can, but sometimes it can be a long time before probate is granted and the property sale can be completed, which can put buyers off. But buyers often consider properties sold by an executor to be worth waiting for as they are often a little below market value (as the beneficiaries want to be paid sooner rather than later.) And the fact that there is no ongoing chain is also a major advantage to buyers.
Whilst we don’t deal with conveyancing in-house, we have associates who carry out first registrations and tidying up the Legal Title pre-sale to speed the process. Contact us on 03 300 102 300.