Member Article

Why buying probate property could save you money

There is a valuable segment of the property market being overlooked because it’s little understood: probate property.

When someone dies, the person responsible for winding up their estate will usually need to obtain a Grant of Probate or Grant of Letters of Administration from the Probate Registry. This is the document that gives legal authority to the estate’s representative to administer the estate, including selling property.

The process of obtaining a grant can be lengthy, as the estate’s executor or administrator needs to value the whole estate first, which often involves asking investment companies for figures and obtaining professional valuations of items, and often, the most valuable assets they have are their homes.

Probate property: Below market rate

Recently inherited homes can often go for below the market rate. My team and I, some of whom you would have seen BBC 1 daytime TV show Heir Hunters, spend our days tracing next of kin to unclaimed estates.

A probate property is one sold by an estate’s executors. Thus, you’ll likely deal with chain-free buyers who want a rapid sale, even if it comes at a lower price as executors generally want to sell quickly, meaning you may be able to buy an undervalued home.

And I’m not the only one to recognise this undiscovered and undervalued part of the property market. Chris Hodgkinson of the Home Buyer Bureau told a national broadsheet recently that a probate property can offer a more affordable route to home ownership, with its analysis revealing that probate properties are typically 19 per cent lower than the market asking price, which could save buyers almost £54,000 in the current market.

Empty homes

In the case of extended families, family members are often keen to sell and move on. Properties can be in bad condition, especially if they have been neglected or not updated, again lowering the price. The executor or bereaved parties want to sell as soon as possible to close the process.

You also avoid a chain as there is no dependent purchase. A grant of probate is required to exchange contracts, and grants can take months to be issued, delaying house sales. If there are family disputes about the will, this can also slow everything down.

Less competition

Experts say that because probate sales often take longer, then ordinary buyers may steer clear, meaning there is less competition for the property. The condition of the property is another important factor, so buyers should prepare themselves for significant repairs and renovations.

Conveyancers also warn that executors are likely to have limited knowledge of the property for sale, such as neighbour access, legal rights of way, notices of nearby development, subsistence and others.

The experts advise that anyone wanting to buy a probate property should visit it multiple times, and be sure to check the boiler’s age, double glazing and radiators as main points for budgeting. Probate houses sometimes feature large gardens, although they may also need some renovation.

This was posted in Bdaily's Members' News section by David Stoch .