Buying out beneficiary

MoistTowelette

We are selling a house that's just gone through probate, the 3 executors are also beneficiaries. 

Two of us want to change to a free online agent to save fees. We have just had an offer of 25k below asking price and the other executor wants to take it and be rid of us, and not go through the online agent. This person only has a smaller share in the property so wouldn't be hit so hard by taking a lower amount. This person has been a nightmare to deal with so we are thinking about buying her out at the price she wants, minus the theoretical fees.

If the house sells for more later, are there any potential legal problems? If all the executors/beneficiaries agree and she signs off on it? 

Brynsam

If the asking price of the property is £100K, then £25K is clearly a big hit; if it's on the market for £500K, proportionately much less so.

Given how grim the property market is, any offer is worth serious consideration, particularly as it avoids a messy and needlessly complicated bit of legal legwork (which will cost you - the DIY route definitely isn't a good plan here). How would you feel if you carried out your intended plan and then the house sells for less later?

MoistTowelette

Brynsam said:

If the asking price of the property is £100K, then £25K is clearly a big hit; if it's on the market for £500K, proportionately much less so.
How would you feel if you carried out your intended plan and then the house sells for less later?

Its more in the middle of that range. If it sells for less, that is the risk we take. At the moment our estate agent has been useless, I dont see how going with an online agent could be any worse. We are quite a simple sale to manage 

Marcon

MoistTowelette said:

Brynsam said:

If the asking price of the property is £100K, then £25K is clearly a big hit; if it's on the market for £500K, proportionately much less so.
How would you feel if you carried out your intended plan and then the house sells for less later?

Its more in the middle of that range. If it sells for less, that is the risk we take. At the moment our estate agent has been useless, I dont see how going with an online agent could be any worse. We are quite a simple sale to manage 

You say the agent has been useless, but you've got an offer. Is it negotiable? Have you tried? Would the agent still be able to charge you fees if you turn down the offer and/or switch to an online one - the contract you signed with them will have the necessary information.

You say the other executor 'wants to be rid of us' but look on the bright side: you'd be rid of them! You would also be rid of maintenance, insurance, council tax another charges. Peace of mind sometimes trumps cash - not always, but in these uncertain times, it has to be a consideration.

p00hsticks

MoistTowelette said:

Brynsam said:

If the asking price of the property is £100K, then £25K is clearly a big hit; if it's on the market for £500K, proportionately much less so.
How would you feel if you carried out your intended plan and then the house sells for less later?

 I dont see how going with an online agent could be any worse.

For what it's worth, over on the house selling board this topic comes up from time to time and there are usually a few posts from potential buyers who will rule out viewing a property because it's only listed with an online estate agent (P***** B***** is frequently mentioned) due to past bad experiences.

MoistTowelette

The list of failures by the estate agent is long and frankly I can't be bothered to write it all out, but in short I don't think I'm going to be persuaded that some poorly executed glorified secretarial work is worth 4x the conveyancers charge (aka the real act of selling).  
My main question is: Is it possible to buy out a beneficiary in this way? I'm not dead set on the option, but simply knowing if it's possible is helpful. 

naedanger

MoistTowelette said:

The list of failures by the estate agent is long and frankly I can't be bothered to write it all out, but in short I don't think I'm going to be persuaded that some poorly executed glorified secretarial work is worth 4x the conveyancers charge (aka the real act of selling).  
My main question is: Is it possible to buy out a beneficiary in this way? I'm not dead set on the option, but simply knowing if it's possible is helpful. 

Yes, it's possible provided all the beneficiaries agree. However it should be documented in detail to ensure that are no future disputes. 
Is the plan there will be a complete clean break i.e. the third executor is paid now their full entitlement as agreed by all three beneficiaries? If so I am not sure if they can make a complete clean break regarding their responsibilities as executor - e.g. should you and the other executor do something wrong with the rest of the estate. 

getmore4less

You have to be careful of self dealing rules.

To do it properly you would need to buy the house off the estate then sell on as "you" owning it.

Look carefully at the SDLT implications of buying out a share.

As said already probate property coupled with on-line agent don't get a lot of support on the house selling board.

picking a better real agent is probably the better option, who picked this useless one?

MoistTowelette

getmore4less said:

To do it properly you would need to buy the house off the estate then sell on as "you" owning it.

If this correct then this would make the process more hassle than it's worth. I was hoping there would be a way to pay her and get her to renounce her interest in the property, but I see what you mean in that she doesn't own anything yet (just an interest) and that I would have to deal with the estate, not her directly. Expensive and time consuming conveyancing would definitely not improve the situation. I think you've answered my question. 
I have read about a deed of variation but that also seems expensive, lengthy and complicated. 

getmore4less

Are there are enough funds in the estate to pay off this beneficiary before the house is sold, or can you inject enough funds to do that?

You probably can do this with a single transfer of the property but you need to consider the time line.

You have an offer and can proceed on that basis a few weeks. 

You want to hold out for more with delayed payouts.