Credit Check Before Selling House???

moyilla

Hello

Just a quick question, does anyone know on here if it is normal practice for a person who is buying a house - which is part of probate - solicitor to want credit checks on the beneficiaries of the house?

Thank you

silvercar

Not normal practice.

The only reason I can think of is to check the beneficiaries are not likely to be going bankrupt soon. If they went bankrupt between exchange and completion, it would cause problems.

The only other reason would be if you were buying the place in a private deal and below market value. Then if the beneficiaries went bankrupt the official receiver could try and set the sale aside on the grounds that the equity, that the bankrupt didn't get by selling cheap, belongs to the creditors.

Apart from the issue of bankruptcy I can't think of any other reason.

moyilla

It is a sale through an estate agent to a developer for cash.

So can I refuse the credit check or is it a must?

silvercar

So you are the seller I presume, I had thought you were the buyer.

You can AFAIK refuse to allow a credit check to be done on you, though the refusal will raise suspician.

Hypothetically, if you were in financial difficulties and went bankrupt, the official receiver would look to sieze your assets to raise money to pay off your creditors. If he finds that you have inherited a home, he would want that sold speedily to raise some money. It would be sold priced for a quick sale, so slightly below market value but near it. If he finds that you have recently (and I think the rules are within the last 5 years!) sold an asset for less than market value, the official receiver has the power to undo the sale or obtain the difference from the buyer. Hence your buyer's solicitor's caution.

If you refuse a credit check, your buyer may walk away or he may accept the risk. If you find a new buyer they may not have such a vigilant solicitor, and the question won't arise.

moyilla

The house was my grandparents and is included in the probate. It has not had one penny spent on it since 1950.
The whole thing is being handled by my two aunts who are administrators, my brother and I would be getting our late mother's share (split between us).
So if you are already bankrupt would any difficulties arise do you think?

eco-friendly_2

So if you are already bankrupt would any difficulties arise do you think?

Not an expert, but I guess the solicitor might be req; to hand over any monies to the Trustee of the bankrupt.