Can Executor Buy House from Estate?

dlog

I am the executor for my brothers estate, the beneficiaries are his two children.
The only asset is the house with an approximately £70,000 mortgage.
The house is difficult to sell in the current economic climate. There is no money in the estate to pay the mortgage payments & other ongoing costs. If there’s no sale soon I anticipate the Mortgage lender will repossess the house to cover the outstanding payments.

The beneficiaries could get little if this is allowed to happen.

Can I, as the Executor, purchase the house from the estate to prevent the banks re-possessing.

[Deleted User]

Hi,

what is value of house for probate?

Mojisola

No reason why not but I would pay for a RICs valuation to keep things clear and above board.

Marcon

dlog said:

I am the executor for my brothers estate, the beneficiaries are his two children.
The only asset is the house with an approximately £70,000 mortgage.
The house is difficult to sell in the current economic climate. There is no money in the estate to pay the mortgage payments & other ongoing costs. If there’s no sale soon I anticipate the Mortgage lender will repossess the house to cover the outstanding payments.

The beneficiaries could get little if this is allowed to happen.

Can I, as the Executor, purchase the house from the estate to prevent the banks re-possessing.

The short answer to your question is that yes, you could - but as you are the executor, you'd need to show that objectively it is in the interests of the beneficiaries for you to buy the property (and at a fair market price). There are alternatives depending on the exact circumstances. e.g. Have you looked at the terms of the mortgage/talked to the lender to see exactly what the options are? How old are the children?

doodling

Hi,

If you wanted to buy the house then you will need the advice of a solicitor as it needs to be very carefully handled to avoid the risk that someone could successfully claim that the house is not being sold at a market value.

If the house is not selling then it is priced too high.  Would you get any interest if you reduced the price by 20%?

user1977

dlog said:

If there’s no sale soon I anticipate the Mortgage lender will repossess the house to cover the outstanding payments.

Have they given any indication that they want to do that? It's not going to be any easier for the lender to sell than you.

dlog

Thanks for the responses - reply's to the comments

• the house was valued at 380k for probate. The house was initially marketed at 380k and I have reduced it to 250k with no interest. This sector of the housing market is dead in my area.
• I have suggested the children clear the mortgage & therefore could own the house for 70k. They are not interested.
• the children are 22yrs & a minor
• In the letter from the lender to the executors they have indicated that the matter will be passed to their Solicitors at the end of the year if payments are not made. I have not challenged their resolve on this matter. - I will - thanks for prompt
• its very difficult for RICS, or any one, to give a fair valuation when there are no current sales in this market sector. My thinking was to keep lowering the price until I had an offer (this would reflect the current market value) & then better it by 5%.
  

Keep_pedalling

How did you think a minor would be able to contribute to clearing the mortgage? With such a high probate valuation you open yourself to possible future legal action if you sell to yourself at well below that price.

Have you considered auctioning it?

poppystar

Why would you want to buy a house that is seemingly unsaleable? Do you have plans for it for the future? Have you asked your brother’s children what they think? They may just want rid of it or they may be pleased it would stay in the family. 

The auction route sounds preferable. I suggest getting an auction house to give you an indication of what it might make. Why was it valued so highly for probate?