Buying sibling out of inherited property - any advice?

[Quebeccles]

Just wondering whether anyone has done this?

My DSis and I were bequeathed our DF's house in his will. We've agreed that I want to buy her half so I own the property but we're both feeling a bit daunted by what seems quite a complex process.

Has anyone been in this position and if so, did you navigate it successfully? Would be grateful for any tips/advice/warnings.

You need to get the property valued and engage conveyancing solicitors to represent each of your interests.

Yes, you each need to instruct a solicitor. I'd definitely recommend solicitors who you've made aware of your plan, not licensed conveyancers. One solicitor cannot act for both of you.

Unless the two of you have already agreed a price then the solicitors should then be able to agree between them a fair system for valuation. That's probably the most important aspect, and where bad feeling might arise. You need to agree a process first, and then abide by the outcome. You can't agree a process and then one of you complain that the agreed process has not produced the price they're expecting so it's wrong.

Thanks, both. We're right at the start of the process but there's no animosity at all, we're good friends and just wish we still had our lovely Dad here with us rather than the house

We've been told by a solicitor, (not acting for us, just a friend) that we have to sell for market value as decided by estate agent or surveyor valuations as otherwise there could be issues with capital gains, so we're aware it all has to be completely above board!

Presumably it doesn't take any less time than any other house purchase?

I did this a few years ago. Worked with the solicitor who was the executor and they 'assented' the house out of the estate, so effectively transferred it into the names of all the beneficiaries before probate was granted, as opposed to selling it to then putting the money into the estate and distributing it. We were all happy with this, (including the executor,) and had agreed that it would be sold to the beneficiary that wanted to buy the rest out.

That meant that the transaction around selling the house was separate from probate and the executor could get on with the rest of the process. The value of the house was still included in the value of the estate for probate purposes, even though it had been effectively 'distributed' to the beneficiaries.

We than had an independent surveyor (not an estate agent) come and do a full survey, including valuation and indicator of what work needed doing which meant we could get some quotes / ideas of what the market value was. So, say it was worth £250k but had £20k worth of work to do, the market value was £230k and that was the price agreed for the sale between beneficiaries.

We then used the same solicitors firm, but their conveyancing department, to do the necessary work around the sale and conveyancing of the property. The beneficiary who wanted to buy it had a mortgage lined up already and it was a very simple and quick process. We didn't do searches or any of the other stuff that slows a sale as the beneficiary buying it already owned part of it, so no requirement from the mortgage company to do them. They classed it as a remortgage and used the proportion held by the buying beneficiary as the deposit.

We all had the one solicitor for the conveyancing, (I checked with another legal firm who confirmed it was not a conflict of interest,) and agreed amongst ourselves the proportion of the cost of the conveyancing we would pay, so the buyer paid e.g. 50% of the overall cost as the 'buyer' and then 25% of the remaining 50% as there were 4 beneficiaries who were the 'seller'.

As it was all agreed and amicable and the will was clear and uncomplicated (and written by the same firm of solicitors who executed it,) there were no issues, it was quick, much quicker than an ordinary sale and could have been quicker if we'd wanted the conveyancing solicitor to do it faster. We just wanted some time to clear the house properly before the sale and so it could be moved into as soon as the sale was finalised.

The mortgage company transferred the funds to the conveyancing solicitor and they transferred the proportion owed to each remaining beneficiary straight away - took about 30 minutes!

All together it took a few weeks, the only delay, which had no impact on the sale or the new owner moving in, was getting the documents back from the Land Registry which took several months; which is pretty normal. We got the assent documents first and then a month or so later the full transfer of ownership to the beneficiary that bought it.

That sounds amazingly trouble-free, BossBhean. We've got probate now, unfortunately - wish I'd known all this before but tbf we hadn't really come to a decision as to what we were going to do until very recently.

I'd assume, but not legally trained in any way so ask someone who is, that the second part of the process we did - around the valuing, conveyancing and remortgaging - could be similar for you. We made sure that there were always transparent decisions made and agreed on the surveyor collectively, all got a copy of the report emailed to us - one person paid, was reimbursed and then forwarded it. It meant that there was no room anywhere down the line or later on where someone could dispute any of it - not that we expected it, but you never know, people can act 'out of character' when wills and money are involved.

You already own a percentage of the property so it should be easier than buying something in its entirety from a stranger.

We had great solicitors, who have worked with the family for years, charged reasonable fees and kept us well informed throughout the process. That made a huge difference as it made going through it all stress free at what was already a difficult time.

Finding a solicitor has been difficult. It all seems quite problematic so far - your experience does sound ideal, BossBhean, I'm rather envious, I admit!

It is very easy to do this. Get 3 valuations and take and take average. Each get your own solicitor. So say for example it is worth 200k. You need cash or a mortgage for 100k and your solicitor will treat it as any other type of sale. You are purchasing the property for 100k from your sister.

It will take about 2-3 months ish (maybe longer as solicitors still seem very busy).

I did this years ago, and it really was easy and much less stressful than a conventional sale as you know you won't lose the house!

I did it four years ago - bought my brother out. We had to get the solicitor to put it into our names first - we used the one who’d done my dad’s probate. Then I applied for, and got a mortgage - I went with L&C brokers and they got me a mortgage with Nationwide. They sent valuers round, I agreed a price with my brother, and Nationwide also provided a convenancing solicitor. Was all pretty simple.

Could I just revive this thread for a moment and ask @BossBhean and @WhatDidISayAlan (and anyone else who could advise) about the conveyancing process - did you need to use a separate conveyancer for each side? I know you say you didn't, BossBhean, but I'm getting conflicting advice about this. Thanks.

No, we used one for the whole process. I'm sure somewhere wiser and legally trained can advise you better, but it worked for us. There was nothing contentious though and the conveyancer sent out the various documents to the other beneficiaries for approval and signatures. The only bit that required another solicitor was witnessing a signature for one of the other beneficiaries who lived far away. But I assume that might have to happen for any legal process when one party is located elsewhere.

Somebody qualified might well come on and explain why it wasn't a good idea and there should be separate conveyancers, but as I said, worked okay for us.

Thanks, @BossBhean, very interesting. It's all completely amicable and there are just two of us. But we've been advised that we need separate solicitors/conveyancers and it all feels very complex at the moment, much more so than it should be.

Believe it or not, I have bought and sold properties before and this is feeling just as stressful, which seems crazy!

Same here - only used one solicitor. We just went with the guidance from Nationwide who I got my mortgage with.

We were all house buying veterans too and I was surprised at how smoothly it went. I am guessing that because we had already agreed the price as the property had been valued for probate and then again by the surveyor, there was nothing that had the potential to be 'adversarial'. So no surprise damp or dodgy roof or mine shafts. Separate solicitors would then be needed to negotiate price reductions, etc., I would presume.

We just needed someone to do all the legal paperwork and make sure all the fees and taxes were paid.

I'm sure someone will say it was the wrong way to do it, but its done and the title deeds are in their sole name (I checked recently out of idle curiosity,) and the money is in my bank account.