Selling probate house: go through estate agent or sell privately to son of family friend?

[thethea]

I'm (hopefully) in the late stages of probate for my father's will and so will be in possession of the family home shortly. Its a four bed detached with 'good sized garden' in a desirable Wiltshire village location with good schools etc etc - which I find rather amusing as I didnt appreciate these things growing up there 20 years ago! I now live around 80 miles away in a city having given up the rural life

The house has been valued at £600,000 for probate in its current state but the estate agent said he would expect it to sell for in the region of £700-£750,000 if done up to tip top condition. Its perfectly livable currently but just a bit dated and new owners will want to change it.

So my inclination is to spend a few thousand just doing the basics and remedying obvious problems that will put people off - one or two rooms havent been painted for 30 years or so and some tiles on the roof need fixing - but leave everything else as is. Then put it on the market through an estate agent expecting to get £650,000 fairly easily which I know is liable to capital gains tax.

This week I had a message from the son of the friends of my parents who I vaguely knew 20+ years ago saying he is interested and would like to buy it as is. Whats the best way of coming to a resonable price? And I am slightly concerned about doing business with family friends - is it a good idea or will I regret not going in with a hard 'business' head on?

Who was the valuation from?

I would get market appraisals from 3 different estate agents before putting it on the market or agreeing to a sale.

Why do you think it is liable for capital gains?
What are you transferring it from the estate?

Agree, get 3 valuations, ask if doing the work you plan would add £50k you think it will. If you don’t go via an estate agent you’ll save that money, so would tell him I’ll be putting it on the market for £660,000 expecting to get £650,000. If he is interested, would he like to view?

also is he in a position to buy? Has he got a house to sell? Under offer etc? If you agree then having to wait 6 months that could be very annoying compared to just getting it sold to a stranger.

I wouldn't bother with a lick of paint. People buying probate houses are going to gut the whole place, replacing everything. And will offer accordingly.

It makes perfect sense that a house worth 700-750 done up would cost 600 not done, as it costs 100-150 to fully renovate a 4 bed.

In other words, just sell for 600 if you're not up to a full reno.

And no CGT.

You can do both

When we sold ours we were asked by the agent to name anyone we had already had approached us and it was agreed that if they bought then no agent fee would be due.

So effectively they were bidding against anyone else interested.

If you are the executor and sole beneficiary then it's up to you but if there are other beneficiaries you might want to check with them.

Presumably you as the vendor are 'the executor of the estate of X'. So sell it that way. If no inheritance tax is due, then the executor sells the property, pays the legal (and estate agent if applicable) fees, and then the proceeds of the sale are added to the remainder of the estate. Which is then distributed to the beneficiaries as per the terms of the will.

A solicitor should be able to advise you.

The estate will be liable for inheritance tax, I’d have thought, but not capital gains if you sell it pretty much straight away as executor. If you spend ages doing it up and then sell it for more than the original estate agent valuation, I believe the extra is liable for capital gains.

I wouldn't bother with a lick of paint. People buying probate houses are going to gut the whole place, replacing everything. And will offer accordingly.

'Probate houses' are just houses of people who have died. Why would they need gutting?

(a) not everyone who dies is old; and
(b) not all older people have poorly maintained or outdated houses.

Well the OP did specifically say the house was dated and the EA said it would be worth 100-150k more if it was in a different condition… So it is pretty likely the buyers are going to spend £100k+ on the house. I made my comment based on the OP. Is that ok with you misslucy?

I thought CGT applied if say, the valuation was 600k and then the sale price is 700k, tax is applied to a portion of the increase

Best way is a to get three valuations. One from your choice EA, one from potential buyers choice of EA and a third one. Then work out the average valuation from these three and that's your price agreed with the buyer.

If this family are interested allow them a look around too then proceed with valuations as above. No point then in doing any work.

Unless the house location and style is usually extremely sought after them going to the open market could work better. But the housing market is a funny thing at the moment and perhaps a private buyer might be the best way forward.

Possibly but if the value of the estate is less than inheritance tax adjustments can be made- where did the probate valuation come from?

It is unlikely that a house valued for probate in the past 2 years is now worth more- much likely to be the opposite

"I generalised about something inaccurately.
I got called out about it.
I'm now going to pretend that I meant something different."

Wow, misslucy you are clearly spoiling for a fight, goodness knows why.

I gave my opinion on the OP's situation, as is pretty normal on this forum. Yes, I included a generalisation which is a) true on the whole and b) relevant to the OPs situation. 🤷‍♀️

As executor you have a duty to get the maximum for the benefit of all beneficiaries.

Need professional advice from solicitor and you need more than one valuation.
@thethea you mention the roof needing work.
Whilst the advice upthread is about painting and decorating is right. You might need to ensure the roof is weather tight.
Any buyer will engage a surveyor who will find the problems that exist (and some that don't)
You will get requests for discounts. I would fix first.

I was coming on here to say exactly what you said @Chewbecca so fwiw I agree 100%.

not worth the time or effort to do anything other than get valuations for probate purposes, get the property on the market and sold. It's a difficult time for you as it is OP, so cut yourself some slack and make things easy.

as regards selling it to someone you know, fine as long as it all gets transacted 'arms length' by solicitors on both sides. It gets rid of issues such as expectation for mates rates etc. not saying that's the case here, but it keeps it impersonal, which is best when buying and selling properties.

If its left alone yes, but OP says she was going to spend some money on it in order to get it up to a higher figure

I presume her expenses would come out of the final tally of the estate though

Any buyer will engage a surveyor who will find the problems that exist (and some that don't)

Caveat Emptor will always apply. It is the purchaser who needs to ensure structural issues are known, then a consideration can be made for that, so the OP doesn't necessarily have to fix it themselves, they just have to ensure it's reflected appropriately in the selling price.

which means they are still achieving the market value for the property, they don't have to fix it in their capacity as Executor, because the reality is that any restoration / repair costs will have to come out of the Deceased estate anyway, so surely it's 6 of one and half a dozen of the other, as they say.

I wouldn't spend a penny on it OP

It's 80 miles away so not easy to pop round & get trades in

Trades are very expensive currently & with the time & petrol & effort to get things fixed up - I'm not sure you'll make anything for your trouble, your time is money too

I sold my mum's probate house as is. I could have spent money on it but I didn't see the point. People who want a dilapidated property are buying it because they can add value. Unless you're proposing rewiring & plumbing and not just cosmetic stuff you won't get the money back.

I've recently been house hunting. One thing that became very obvious in this difficult market is the inflated prices vendors are asking for properties that need work. Don't fall into that trap - be realistic.

I wouldn't take it for granted that just because he is the son of family friends that he is unlikely to mess you around with the usual tricks people looking for a bargain use.

If you can afford to lose the family friendship and still sleep well at night, go for it. If they are long term friends that you value, go to market.

Everyone's a viper in this market, so even that 'well raised boy who was always so polite' should not be assumed to behave as such.

Best not to get involved with these direct approaches- yes you'd pay but a good agent could get you viewings and vet any offer/buyer.
The direct buyer could use the agent like any other buyer and bid.
It also removes a lot of the personal involvement, and potential skulduggery.
Nothing like a stressful and problem ridden sale to strain good relations.

Do what was said up above. Put on with agent but specify sale to friend is excluded.

Well no, ours was in perfect condition.
Not all probate houses are in bad condition. But most houses in bad condition are probate houses. Having seen loads we were able to tell , and we were usually right.
In those situations people don't tend to tot up things (like, oh, it has a working boiler, but this room needs redoing etc) they tend to just rip everything out as PP said.

My condolences on the loss of your father OP.