Beneficiary wants to buy

Lilio8

There are 3 beneficiaries with me included; 2 are siblings of the deceased; I'm beneficiary & executor of the Will (I'm still a while away from grant of probate).

One of the beneficiaries is considering buying the house and asked for various info. I've not yet informed the other beneficiary about this (I think that I should soon). Beneficiary doesn't want me to put the house on the market yet. I'm emptying the house and getting it ready to re-decorate as I'd like it to be on the market, while I wait for everything else to happen (forms for HMRC, pay bills, grant of probate, etc..).

Is there anything that I should look out for and/or should I look into, apart from real estate agents coming over for evaluations?

Could the beneficiary interested in purchasing the house hold me up in paying debts/bills and distributing the inheritances? If beneficiary will be taking his time, could I actually simply look for another buyer?

 He is to receive cash only (once the house is sold, if he won't buy) and, as I understand, he'll basically be using  inheritance to buy the house.

My concern is that he might want to buy at a very low a price and take too long for a decision.

P.S. I am aware that till grant of probate I cannot sign a contract of sale, only put the property on the market to look for prospect buyers.

Keep_pedalling

Provided the other beneficiaries agree with the valuation then this should actually make your life easier ans speed up the winding up of the estate. Depending on what other assets are contained within the estate it may even be possible to distribute the estate in a way that reduces or avoids the need for any sort f buy out.

For example if the estate was worth £900k including a £300k house and you had each been left 1/3rd of the estate the the person wanting the house gets that and the other too get the remaining assets between them. It’s seldom that simple but hopefully you get the idea.

GrumpyDil

Also I would explore the option in detail before you put the house on with an estate agent as you want to avoid any issues with an estate agent wanting a payment in that event. 

p00hsticks

The main sticking point I think will be fixing the price of the house (which you'll need for probate anyhow).
There are a number of ways I think you could do this 

a) Just have the three beneficiaries agree on a mutually acceptable value. Obviously the one buying the house will want it to be as low as possible, the other two as high as possible, so if you can reach a middle ground then that should be fair. It would also avoid estate agents fees, although you'd still have to pay for the conveyancing. 

b) The estate pays for a professional 'red book' valuation from a RICS surveyor. 

c) You invite several estate agents round to make valuations, the property is put on the open market with one and the beneficiary who wants the house is invited to put in an offer along with anyone else interested.   

Does the property form the bulk of the estate ? If it is a third or less than the estate could simply be distributed with one beneficiary getting the house (plus cash to make up their share) and the other two cash. 

Keep_pedalling

Is this the same property one of the beneficiaries wants to buy? 

Lilio8

p00hsticks said:

The main sticking point I think will be fixing the price of the house (which you'll need for probate anyhow).
There are a number of ways I think you could do this 

a) Just have the three beneficiaries agree on a mutually acceptable value. Obviously the one buying the house will want it to be as low as possible, the other two as high as possible, so if you can reach a middle ground then that should be fair. It would also avoid estate agents fees, although you'd still have to pay for the conveyancing. 

b) The estate pays for a professional 'red book' valuation from a RICS surveyor. 

c) You invite several estate agents round to make valuations, the property is put on the open market with one and the beneficiary who wants the house is invited to put in an offer along with anyone else interested.   

Does the property form the bulk of the estate ? If it is a third or less than the estate could simply be distributed with one beneficiary getting the house (plus cash to make up their share) and the other two cash. 

Thank you for your reply.
The property forms about 57% of the estate. I've added & subtracted and a fair bit of cash to distribute to the beneficiaries will have to come from the sale of the house.

RAS

I'd suggest that you don't decorate. Water-tight, basic utilities safe and priced as seen. You are unlikely to get any money back on any improvements, and it really isn't your job as executor to act as a developer. 

How close do you think the estate is to the IHT limits? If way below, obtain prices from three estate agents and go towards the middle for the bottom value for sale, but price towards the top for probate which helps avoids CGT. If there's doubt, or there's strife over the possible sale get a RICS valuation,

It is your decision whether to sell to the beneficiary, not the other beneficiary's but you do need to give the other one the option of bidding for it as well. Make it clear to both that the sale will not be below value and that the buyer can't access before the sale is complete and needs to complete within a reasonable timescale or the property goes on the open market.

Lilio8

Keep_pedalling said:

Provided the other beneficiaries agree with the valuation then this should actually make your life easier ans speed up the winding up of the estate. Depending on what other assets are contained within the estate it may even be possible to distribute the estate in a way that reduces or avoids the need for any sort f buy out.

For example if the estate was worth £900k including a £300k house and you had each been left 1/3rd of the estate the the person wanting the house gets that and the other too get the remaining assets between them. It’s seldom that simple but hopefully you get the idea.

Thank you for your reply.

I'm all for it if it's going to simplify things and wind up of the estate. The estate is worth just over £500K. I'll have to tell the other beneficiary and see. Solicitors said that beneficiary 'buys out'.

Lilio8

Keep_pedalling said:

Is this the same property one of the beneficiaries wants to buy? 

Thank you for your reply.

Yes, it is the same and only property.

Lilio8

RAS said:

I'd suggest that you don't decorate. Water-tight, basic utilities safe and priced as seen. You are unlikely to get any money back on any improvements, and it really isn't your job as executor to act as a developer. 

How close do you think the estate is to the IHT limits? If way below, obtain prices from three estate agents and go towards the middle for the bottom value for sale, but price towards the top for probate which helps avoids CGT. If there's doubt, or there's strife over the possible sale get a RICS valuation,

It is your decision whether to sell to the beneficiary, not the other beneficiary's but you do need to give the other one the option of bidding for it as well. Make it clear to both that the sale will not be below value and that the buyer can't access before the sale is complete and needs to complete within a reasonable timescale or the property goes on the open market.

Thank you for your reply.

I was wondering, before reading your message, if I should continue to tidy up, get the walls painted & carpets changed. I've put a lot of work in tidying up the house, it was an absolute disaster and I'm not done yet with clearing it all. Should I get the house empty asap or there's no rush?

The estate is outside the IHT limit of £325K, by about £220+ (probate evaluation of £315K).

What would a reasonable timescale be for the sale?

Hal17

When my father went into care last year, I sold his house to pay for care home fees. The estate agent advised me not to do any decorating or change any carpets. He said ensure the house is clean and I will sell it as an "Honest House". I had 3 viewings in one morning and all 3 made an offer within the price range I was happy with.

My only regret was I sold the house to the first young family that viewed, only to find at a later stage that they were moving from furnished rented accommodation and had no real possessions other than personal belongings. In hindsight it would have been great to have asked what furniture they would have liked, before I cleared the house to various charities.