Buying out Sibling's share in house

EJennyJ

My husband and his two siblings (one of whom is the sole Executor) have inherited their recently deceased mother's home, and in accordance with his mother's wishes (stated in the will), my husband (and I) would like to move into the house, which means that hubby and I would have to sell our present home in order to pay his siblings their share of the market value of their mother's house. (we believe that is how it works - presumably it is a valuation for probate purposes that is needed, rather than a 'normal' valuation?)

We will be seeking legal advice once the probate valuation is in, but I wondered if anyone here has done something similar, & if you might have any advice for how we might save on tax/fees, or indeed the best way to go about transferring the property... what do we need to be aware of, and what steps do we need to take to make sure that no-one loses out?

Obviously the siblings want to get the maximum possible price for the property valuation, but it seems almost to be a conflict of interest, because whilst not wanting to 'short change' his siblings, the less my husband and I have to pay to buy out their two thirds, the better for us - particularly if there is not much difference in property value - because not only will we have the expense of selling our home, but there is some work needed on the inherited property as well. We are in our fifties and don't want to take out another mortgage! None of us are quite sure how this works, and we don't want to fall out over it, but I can already see that there is a potential for friction... We are also wondering about capital gains tax....how will that affect what we should pay to buy out my husband's siblings?

So many questions, so much we don't know... what questions should we ask a solicitor for instance? Do we need to find a solicitor with particular skills/experience, or will any conveyancing solicitor in our area do? We have just had our house valued (initial estimates from 3 local estate agents) and are waiting for the executor to get the inherited property valued. If the valuations are too similar then my husband says he will not see us out of pocket and will not buy his siblings out, which is fair enough. They are both happy for us to buy them out, by the way- neither are interested in having the house themselves; but it was their mother's hope that it would stay in the family and we would like to honour that if we can.

Any advice greatly appreciated!

antrobus

EJennyJ wrote: »

...We are also wondering about capital gains tax....how will that affect what we should pay to buy out my husband's siblings?

Capital gains tax only comes into play if the estate sells the house for more than the probate valuation. Why would you offer to pay more; why would the siblings accept less? (Apart from maybe knocking off a bit for saving estate agents fees.)

Otherwise, you are massively over complicating the issue.

The executor gets the house valued. You offer to buy that property at that valuation. Or not, as the case may be. Depending on your personal finances.

missbiggles1

The executor has the legal responsibility of getting the highest price possible for the house - your expenses re selling your own property etc are irrelevant.

Keep_pedalling

Do you both actually want to live in your MILs old house? If not then you do not have to follow her wishes, just sell the place and split the proceeds.

If you do want to then get it professionally valued, both for probate purposes and to set the amount you need to buy the other 2 thirds of the property. The cost of the valuation will be down to the estate, as that is required for probate, but costs associated with buying and selling individual shares will need to be met individually.

xylophone

The executor should obtain a valuation for the house.

https://www.gov.uk/valuing-estate-of-someone-who-died/overview

http://death-duties.co.uk/content/valuation

Under the circumstances, so that nobody feels short changed, it might be as well to employ a RICS surveyor.

There will be no CGT for you and your husband to pay on the sale of your home.

If you wish to move as quickly as possible after probate is granted, you might want to put your house on the market as soon as you can.

You will no doubt employ a solicitor to deal with the sale of your property - he could also act in the purchase of the property from your late MIL's estate.

Mojisola

EJennyJ wrote: »

Obviously the siblings want to get the maximum possible price for the property valuation, but it seems almost to be a conflict of interest, because whilst not wanting to 'short change' his siblings, the less my husband and I have to pay to buy out their two thirds, the better for us - particularly if there is not much difference in property value - because not only will we have the expense of selling our home, but there is some work needed on the inherited property as well.

Surely the price of the house will reflect any major work that needs doing on it?

The estate will be saving a bit on EA fees if you buy the others out so there's a bit of leeway there on price.

The executor will need to get a professional to set a price - he has the legal responsibility to get the best price he can for the beneficiaries.

Does the will state that the other beneficiaries have to sell the house to you or is it just a 'wish'? If it's a wish, the executor could put the house on the open market and you would have to compete with other buyers.

EJennyJ

Thanks Antrobus,

Your reply was very helpful; and you're probably right that we are over-complicating it :rotfl: - a side-effect of ignorance, I suspect! Hopefully all will be made clearer once the valuation is in and solicitors appointed- the key point in whether we will buy out my husband's siblings is whether or not my MiL's house is worth more or as much as ours, because if it is worth more/as much as, it might not be worth the expenses we would incur in selling ours. It is a weird situation because my husband is a beneficiary too.

Neither of us really understands CGT that well (or at all!), so your advice that it would only come into play if we were to pay more than the probate value is comforting - we wouldn't want to pay more than that, and the other two siblings have both said they are happy for us to take on the house/buy them out, so hopefully that will be that...

Thanks again for your reply!

EJennyJ

Thank you for your reply, Mojisola.

I haven't seen the will myself so I am not sure exactly how it was worded - however I don't believe it was stated that they have to sell to us, just that my MiL hoped my husband would live in it. The other two siblings have said they have no interest in retaining the property and are happy for us to buy out their interest, and we are happy to do so provided we don't lose out financially. The executor hasn't organised a family meeting with a solicitor yet because of family holidays and not being able to get everyone together. Hoping it will be soon so that we all know exactly where we stand! If the executor decides he wants to put it on the open market and the will allows him to do that, I can see us not wanting to compete, but who knows! New and uncharted waters for us...

EJennyJ

Thanks, Xylophone -

The executor was told during an initial consultation with a solicitor on the phone, that my husband and I would need to hire a different solicitor for our purchase of his siblings' share of the property; so I'm a bit confused by your statement that we could use the same one - perhaps because my husband is also one of the beneficiaries, might it not be conflict of interest? My husband believes that because the property was left to all three siblings with the hope that he would buy out the other two, that he is already a part-owner, so it is not so much a 'sale' as a 'transfer of interest' for which we have to pay two thirds of the valuation. Not sure if that is right, or if it makes sense, mind!

EJennyJ

Thanks for you reply, missbiggles1.

Oh yes, we fully appreciate that the executor is duty bound to get the best price, that makes sense. Also appreciate that our EA fees are irrelevant as far as that goes - however depending on the valuation of my MiL's property and the valuation on ours, it is very relevant to us, as it may not be financially worthwhile for us to sell our current home. I guess we just have to wait and see.

It's been very helpful to get some feedback on our concerns, thanks again for taking the time to respond, everyone!

EJennyJ

Thanks, keep pedalling,

yes, we do both want to live in the house - but only if it won't inconvenience us too much financially!

I think what I have taken away from the replies kindly given here today, is that we need to (a) wait for the deceased property to be valued and (b) see a solicitor if buying out the siblings' shares seems financially sensible. If we stand to lose money then it may well end up going on the market.

Thanks again!