FTB Offer on Probate, multiple offers....

TomN

Hi all, first post for me, but long, long time lurker. I'll just give a short background info on us, any advice on this situation will be welcome.

My girlfriend and I (getting married next year), are looking to get on the property ladder after renting for a few years.

As you can imagine with our wedding around the corner it will be an expensive year for us coming up, however, as the government has announced that the stamp duty holiday will end in March next year, we have decided to try and buy before then (if we find the right property), and stay under the stamp duty threshold of £250k (for FTBs).

Anyway, we have found a property that in our eyes is perfect. It is in a great location, with scope to restore it and extend in the future after being neglected for the past few years.

Of course, with a property like this in a good location (SE London/Kent) several people are interested. The property came on the market last Friday, we saw the property Sat afternoon, and after consulting my Dad (a builder, I am also in construction), we decided to put in an offer for the full asking price (250k) to try and close the deal. We feel that this would be a good investment, as other properties have sold in the same road for over 350k (admitly in 2007, but prices are slowly on the rise again in this area).

However, due to the property being a probate, the estate agent claims to want to get 'the best deal' for the property, which sounds fair enough, but to me it sounds like they are trying to incite offers for more than the property is worth (realistically not much more than £250k, especially with 3% SDLT considered seeing as a lot of work will have to be done to it, currently no central heating etc). Even though we put the first offer on the table, the property will not be taken off the market at this stage. There is to be an 'open day' this weekend, with all interested parties invited to submit their best offer by Monday 12pm.

We have already submitted our best offer, and have sent the estate agent our Mortgage AIP and he has spoken to our mortgage broker (brother in law) so we feel we are in a strong position as FTBs so therefore no chain. There are currently 2 other offers already on the table, and will inevitably be more before next week, but currently we don't think any of the offers are over 250k.

What I am looking for really is reassurance and/or advice as it feels like it will be a long week ahead, and we don't know much about this kind of situation where multiple offers are on the table. We have both fallen for this property (dangerous I know), but there really is nothing else like it on the market currently. We would set up a family home and picture ourselves staying there for years, but realistically if a cash buyer comes along keen to make a quick buck, the vendor will surely accept their offer over ours (there are 4 people involved in the probate, which will complicate matters further I imagine).

Is there anything we can do to make ourselves more attractive to the vendor(s)? We have already asked the estate agent to pass on our personal situation so hopefully there will be an emotional side of what is realistically a purely financial decision. The old lady who lived there did so for over 50 years and was by all accounts a real pillar of the community. We hope that her children share some of her community spirit!

Apologies for the very long-winded post, I know most people (who have bothered to read this far) will probably advise us to keep well away but it really is too good to walk away.

GAH

If all ready a lot of interest, it sounds like its competitively priced and in a good area.

From the agents side, its is their duty to get the best price for the beneficaries they can. If they already have yours and a couple of other asking price offers on table with further viewings booked ahead, then they may want to test the waters a little further.

Of Course the Stamp Duty is the sticking point here though.

Do you know how many beneficaries are involved?, as if it is 2,3,4 or more then it could be a bit more drawn out than you hoped as their is always somone that doesn't agree with something or wants a bit more money.

If I was the agent, and had several offers or more the same on the table, I would be asking from best and final offers from all parties plus their positions to put to the vendor, for them to make a decision.

DominicJ_2

I suppose it depends if they are telling the truth or not. If £250k is a good offer, and they are just being obstructionist, you could always withdraw your offer, saying that was the quick sale price only.
If there are other bidders, well, there are other bidders, and the highest wins.

TomN

Thanks for the quick replies.

GAH - We have been told that there are 4 beneficiaries involved, so as you say it could be drawn out. Apparently the poor lady only passed away last week, so we could be in for a long process, but if it all worked out we'd be prepared to wait as we obviously have nowhere to sell.

If there are several offers of say £250k on the table, then what could potentially put us above the other offers? As mentioned we have already sent the estate agent our AIP to show we are serious. Our LTV is unfortunately quite high at 95%, but that is due to the majority of our funds being tied up in the wedding plans (we are funding it ourselves). Our affordability shouldn't be a problem for the mortgage, but as long as the vendor(s) still get the same amount of money that shouldn't be used against us should it (unless there is a cash buyer interested)?

Could we perhaps agree to commit to a completion date to show we want a quick and painless process? We also have a conveyance solicitor in the family so hopefully that will help matters.

GAH

4 Beneficaries and it only been on a short while could mean a little wait, but what vendors/beneficaries should know is that normally the First offers they get, are normally the best.

I guess its gonna be a bit of a waiting game for you possibly.

But if you were up against somone with say a much larger deposit, they may be favoured over yourself, as for example when you have your mortgage valuation, if the place was downvalued you would either have to make up the difference or not be able to take the mortgage as your margins are tighter, where as if it happened to someone with a larger deposits they may have more room for manouvere.

I'm only speaking hypothetically though.

Richard_Webster

Just because they have put the property on the market does not necessarily mean that they actually have a grant of probate, which they need to pass to title. Families of the deceased are forever jumping the gun like this.

The estate agents won't usually know the detail so you need to contact the sellers themselves or get your solicitors to contact the seller's solicitors to find out how far on they are with getting probate.

It is possible they won't have it before the SDLT holiday for FTBs ends at the end of March.

TomN

Thanks for the advice Richard, this is what we thought. Whilst initially it doesn't fill us with dread, we obviously need to find out how far along they are with the probat process. I suppose the amount of time it takes varies in each instance?

The biggest challenge at the moment is to put ourselves at the top of the vendors list so to speak! Any tips welcome.

sonastin

If £250k really is your best and final offer (which I assume it is if you're on the margins and there is nothing left for SDLT let alone a higher offer) then realistically you have done all that you can.

Best thing now is to be patient and carry on as though this isn't going to go in your favour - carry on looking at what else is on the market, see what else you can get for your money, see if you can save up any more deposit, etc. If it comes down in your favour then all to the good but if it doesn't, well you might end up better off anyway.

Stamp duty is a few £k but in the grand scheme of housebuying, it doesn't add up to a big contribution. If you waited a while until you had a bigger deposit, the interest rate available to you would be significantly better and over the life of the mortgage that could add up to a lot more than the amount you "lose" by missing the stamp duty window.

And if the owner has only recently passed away, it is by no means certain you'll get in before that window closes anyway. A dear friend of my OH recently passed away (early September). Even though she kept all her papers together in one place, there was only my OH as executor and beneficiary and we started the probate process immediately (similar situation with no heating in the house - didn't want the responsibility over winter!), it still took until November for probate to be granted. If her affairs were a mess, if there are several executors who need to come together for the interview with the probate registry, if the probate registry is busy even it is easy to see how that would stretch by a few more weeks. And bearing in mind that over Christmas, a lot of the working world shuts down so finding out information necessary for completing the probate forms becomes harder, chances of them being in a position to sell to you in March aren't great.


My advice is to work at not having your heart set on this place. By all means continue to pursue it - if it is as good as you think then it is definitely something to strive for - but don't get yourself in a position where it will break your heart to let it go. The odds are against you but it doesn't mean that its not a gamble worth taking - its not a big stake at this stage after all.

TomN

Thanks sonastin - all of what you say makes sense, and it is sobering to read the example of your OH. I suppose it is difficult not to get too involved in a place when you can picture yourself there etc. but it is best to stay at arms length so to speak.

With regards to afforability, we could go above £250k (probably upto £270k) in terms of affordability but the upfront payment of SDLT is prohibitive, and also we feel it doesn't make financial sense to if we could get a property for £250k or under (£0 v £7500+).

I completely agree with your comment re: saving for a bigger deposit and therefore benefiting from more advantageous mortgage rates - but we can justify this by currently paying over 1k a month in rent + bills on a place that we are seeing no return on. We could maybe just stretch to 10%, but it would leave no money for furniture (we hardly have anything) and more importantly in the medium term our wedding! It might sound like a case of wanting everything now but we have been planning both of these events for over 2 years now.

We feel it is also worth pursuing a bit harder than the other properties that we have seen for a similar price as we could comfortably have children in this place (and extend in the future to accomodate an increasing family), where as nearly all the other properties we have seen in close proximity to stations (a necessity) would require us to move again in circa 5 years when we would like to start a family, and moving once is bad enough without having to a plan another one on the horizon!

Clearlier

TomN wrote: »

We could maybe just stretch to 10%, but it would leave no money for furniture (we hardly have anything) and more importantly in the medium term our wedding! It might sound like a case of wanting everything now but we have been planning both of these events for over 2 years now.

I can't add to the advice you've already received on negotiating but I can suggest that you budget very little for furniture. Start looking at local newspapers, freecycle, small ads etc., you'll soon work out that there's a whole load of people looking to offload furniture that they're replacing. If you have somewhere you can store it start picking up what you want/need after exchange and before completion. Assuming that you have a couple of weeks you'll be surprised at how much you can pick up.

Over time as you have a little more money to play and a better idea of what suits your taste/the house you can start buying good pieces of furniture. If you try and buy new straight away you're going to end up with a level of quality that you're not happy with and you'll want to replace it.

Only caveat I would have is to watch out for people selling stolen goods. I'm not sure quite how you tell them but there have been a few purchases that I've walked away from because I didn't get the feeling that the vendor was telling me the whole story.

TomN

Thanks for the tip clearlier, I actually registered for our local freecycle today! You're right it's best to get older/cheaper stuff first, then build up a bit at a time. We have some things (old table and chairs from uni) but not a lot; it doesn't phase us tho, more worried about getting the place first, and anyway installing a central heating system will be top of the list!!