Sorting property after family death

clarky_cat

Hi,

Hoping someone can advise, one of my parents recently died and has left the house to myself and brother. There is no oustanding mortgage and he wants to live in the house. He is going to borrow to buy out my half but how do we reach a realistic valuation and how would do the bank agree on that figure? We have one from probate but IMO it is way below the market value. Never had to do this before so its all a new experience.

BitterAndTwisted

You each get separate valuations done and take a figure midway between the two. You need to be absolutely explicit about what the price should reflect, and that's not some optimistic figure an estate-agent will quote to get the property on their books.

CWSmith

Probate valuations are always low.

When I dealt with my mum's probate a couple of years ago, the solicitor gave me a list of EAs to use and told me to tell them specifically that the valuation was for probate purposes. I believe this is to lessen your chances of being caught up with Inheritance Tax.

But ............ depending on your circumstances, a lower valuation makes you more likely to fall foul of greater CGT when/if you sell the property, so in the long run, it doesn't make any difference I suppose.

clarky_cat

Thanks, I did suspect it was low. We are way below the inheritance tax value so no worries there.
I will probably get another couple of valuations then to give an idea and we'll agree on a price. I've looked at recent sales on the same street and they sold for £15-30k higher.

SmlSave

I think a probate value is similar to the rebuild value rather than a sale value.

Hope everything goes ok for you

davidmcn

The bank will get it valued, so you might want to start with that figure.

troubleinparadise

SmlSave wrote: »

I think a probate value is similar to the rebuild value rather than a sale value.

A probate value is the market value of the property on the date of death - it is nothing to do with the rebuild value.

HMRC can (and does on occasion) ask the District Valuer to verify the probate value they have been given if they suspect it is too low (to potentially reduce the amount of Inheritance Tax payable to HMRC by the deceased's estate).

AMO53

Hi,
I'm in exactly the same situation, my brother wants to buy my half of my mum's bungalow. The probate value was £120k which he insists is realistic but two estate agents have given the valuations of £170 to £162 for a quick sale and £159 to £152 for a quick sale. Just now waiting for a third agent's valuation.
I've suggested we ask a non biased third party to reach a view and one we agree to accept before we hear it. He doesn't think this will work.
Anyone with a better idea?

Idiophreak

AMO53 wrote: »

Hi,
I'm in exactly the same situation, my brother wants to buy my half of my mum's bungalow. The probate value was £120k which he insists is realistic but two estate agents have given the valuations of £170 to £162 for a quick sale and £159 to £152 for a quick sale. Just now waiting for a third agent's valuation.
I've suggested we ask a non biased third party to reach a view and one we agree to accept before we hear it. He doesn't think this will work.
Anyone with a better idea?

Take the average of 3 valuations.

If it's really too high, the lender will downvalue anyway, so your brother has some protection there...

Mojisola

AMO53 wrote: »

Hi,
I'm in exactly the same situation, my brother wants to buy my half of my mum's bungalow. The probate value was £120k which he insists is realistic but two estate agents have given the valuations of £170 to £162 for a quick sale and £159 to £152 for a quick sale. Just now waiting for a third agent's valuation.

Idiophreak wrote: »

Take the average of 3 valuations.

Your brother can't buy the house unless you agree to the sale price so it's either come to an agreement with you over a realistic price or put it on the open market.

As Idiophreak says, get a third valuation (let him choose the EA if that will make him happier) and take the average of the three.

waveneygnome

If you still really can't agree, put it on the market.

If you get buyers/offers for the property at the higher price levels, that will tell you what the market price is.

Your brother then has to decide to either up his offer, or sell to third party. If you sell to third party, your brother hasn't lost half a house worth 120k; he has gained 50% cash of £150-160k

Let the market decide.