Probate - do I use local estate agent to value house?

[astranna]

after a month of faffing around with admin for funerals and other stuff after my mother's death I am beginning to look at the probate details.

So far it seems straight forward - bank accounts, investments etc all seem to be fine - my question is how do i value the house? Can I just ring up a local estate agent and get them to value or do I need someone more reputable? Is there a standard form that needs to be completed or will a figure on headed paper be OK?

I have been advised that I want as low a valuation as possible for inheritance tax purposes (hopefully to keep the estate out of liability) but it almost pains me as the house is in a bit of a state - having watched the Sarah Beany/ Kirsty Allsop/ Homes under the Hammer programmes I know that some quick redecorating, new rugs and plants etc would really lift the rooms and make it much more desirable! I guess I could do this for sale but would I then be liable for capital gains tax?

We had this last year, we got 3 estate agents in to value, then added them in with the paperwork with probate. Made the estate agent aware that the valuation was for probate, and they were all fine with it. Chose the estate agent we liked the best and went with them for the sale of the property

I had to do this for my father's house. I called 3 local agents, told them it was for probate. Were given 3 slightly different valuations and used the average of all 3 for the paperwork.

Sorry for your loss.

I think it depends on the value of the house and overall value of the estate, as well as who it’s left to. Basically if you are on the borderline of paying inheritance tax, then the HMRC may want a more accurate valuation than if you aren’t.

I hope you are aware that depending on circumstances you can leave up to about £1 million without inheritance tax.

If the estate is comfortably below the inheritance tax threshold, then an online valuation or a local estate agent valuation will be fine. If it’s borderline or above, you can still apply with a valuation from an estate agent but HMRC may query it.

I wouldn’t undervalue as you will just pay capital gains tax if you sell above the probate valuation.

I've done this recently. I think it partly depends how likely the estate is to be liable for IHT. If your DM was widowed and inherited DF's IHT threshold, is leaving the house to her children, and doesn't have loads of other assets, then HMRC probably won't care that much and you are unlikely to be asked for any evidence - you can just get an estate agent to give you a rough estimate. If you think you'll need to prove it, you might want to pay a chartered surveyor to do a proper valuation for you.

Sorry for your loss, OP.

You need to get three to do it - and the solicitor doing the probate recommended three local agent she usually used to value properties in these circumstances. All three understood it was for probate so none did a hard sell on wanting to have the place on their books, though we did use one of them in the end.

Alternatively you can ask a surveyor to do a Red Book valuation:
https://www.rics.org/profession-standards/rics-standards-and-guidance/sector-standards/valuation-standards/red-book

I had 3 local estate agents try to value a property for probate purposes. They varied from about £290k to £350k which I though was too much of a spread so I paid a Chartered Surveyor to value it and it was his value of £320k that I used. The problem the EA's said, was that the property was of a slightly unusual design - only 2 rows of about 6-8 houses were built using this design and there were no recent sales (only one in the previous 20 years that was very run down) of any of these properties to compare with.

Sorry for your loss OP.

When mum died she was nowhere near the IHT threshold. I just looked on Zoopla/Rightmove and put what houses like hers had sold for on her road (which was exactly what her bungalow sold for). If you're close to the threshold or over it you probably need actual estate agents

I’m sorry you’ve lost your mum. It’s so hard to deal with the grief and think systematically about important things like houses and money. I approached it as a way of showing respect to the hard work my parents put in that enables us to inherit.

I had to go through all of this a couple of years ago and I knew my mum’s estate would have IHT to pay. Honestly it’s very simple - no fancy surveys required. 3 estate agents, local are best to show they know the market. When working out the value for the estate you take the average of the bottom two quotes. So don’t tidy up! If you’re clear it’s for probate they give you the low end of the range rather than doing the “well you could get…” talk. They have a special form they fill in that shows how they valued it for probate. They can’t just quote you a figure.

From memory IHT threshold is £350k BUT if there is a house and the estate is being left to children or grandchildren, then you can add on another £150k. So a total of £500k. Get the solicitor to do the forms! I had 14 separate forms to fill in due to some fancy footwork investments (all legal) and the solicitor managed to save £20k in IHT by just understand the rules better.
You also have to get any IHT PAID by 6 months from the end of the month the deceased passed. Not just calculated but paid. And they charge interest. It also takes far longer than you think but just keep plodding on.

Best of luck!

You pay CGT on what you actually sell the house for which is not necessarily the valuation. You can't get a lower valuation, do the house up a bit then sell for more but claim you sold for valuation price. The form asks for selling price.

@astranna consider getting a RICS valuation.

Also research CGT.

When I did this, the house was not being sold, so I just looked on Rightmove etc, and found recent sales of comparable houses in the street/nearby.
I printed a few as evidence, and used an average.
BUT this case was not getting near the inheritance tax level.
The probate office accepted what I had done.

Like pp I got three probate valuations from local agents and took the average. This was accepted by HMRC. If you are paying IHT, I wouldn't go too low; if the property sells for less you can claim back the IHT on the difference. We will almost certainly be in this position as the date of death valuation was for last October and the market, particularly for doer-uppers, has completely tanked.

Sorry for your loss OP, it's tough dealing with all of this while grieving at the same time. I have to say, I found the HMRC very helpful whenever I had questions. And most banks etc. had a bereavement team who were usually helpful and kind.

Oops, just realised you started this last month so you're probably further along in the process by now. Hope it's going OK.