How Do You Buy a Property in Probate?
Buying a property in probate can offer opportunities for buyers to purchase a home at a lower price, as executors may be keen to sell quickly. However, the process is different from a standard property purchase and comes with certain legalities and timelines that need to be followed. Understanding how probate works, the role of the executor, and the potential benefits and risks can help you navigate this type of property purchase more smoothly.
What is Probate?
Probate is the legal process that takes place after someone dies, ensuring their estate is managed according to their will or the law if no will exists. This includes dealing with any property the deceased owned. Before the property can be sold, the executor of the will must obtain a "grant of probate," which is legal permission to manage and distribute the estate. According to the Ministry of Justice, over 130,000 probate applications are made in the UK every year, highlighting how common this process is.
In some cases, the executor of the estate, or the person managing the will, might decide to sell the property, particularly if there are beneficiaries who prefer cash over maintaining the home. If you’re looking to buy a probate property, you need to understand that the sale may take longer, as it depends on when probate is granted.
Are There Laws Involved?
Yes, there are specific laws governing the sale of a probate property. Firstly, the executor must have the legal right to sell the property, which is why probate must be granted before any final sale can occur. Without this, the executor cannot legally transfer ownership of the property to a new buyer. This can sometimes delay the process, as probate can take anywhere from a few weeks to several months, depending on the complexity of the estate.
Additionally, the executor has a duty to act in the best interest of the beneficiaries. This means they should aim to sell the property for a fair price. However, in some cases, the executor may be looking for a quick sale to finalise the estate, which could work in your favour as a buyer. Sometimes, the property is sold "off market," meaning it isn't listed on public property websites, giving you a chance to purchase it before others are aware.
Auction Sales and Quick Sales
In many probate situations, the executor may choose to sell the property at auction. Auctions provide a faster method of selling, allowing the estate to be settled more quickly. Properties sold via auction can often be sold below market value, especially if the executor is under pressure to finalise the estate.
In fact, a report from the Auction House Group shows that 25% of all properties sold at auction in the UK are probate sales, with many property developers using auction finance to secure a quick sale.
For buyers, this presents a good opportunity to purchase a home at a reduced price, but you should be prepared to act quickly, as auction purchases usually require completing the sale within 28 days.
Why Probate Properties Can Be Cheaper
One of the biggest attractions of buying a property in probate is the potential for a bargain. Executors are often keen to sell the property quickly, especially if there are several beneficiaries who want the estate settled sooner rather than later. For some children of the deceased, the sale of the property proposes a strong cash injection, with some using probate loans to get an advance before the sale.
As a result, probate properties may be priced lower than similar homes on the market. In some cases, the property might not be advertised widely, so you could avoid a bidding war and get the property for less than its full market value.
However, buyers should be cautious. Some probate properties may require significant repairs or renovations, as they might have been owned by elderly people or have been left empty for a long time. This could add to the overall cost, so it’s important to get a survey done to fully understand the condition of the property.
Timelines and Patience
One of the key challenges when buying a property in probate is the timeline. The probate process can take time, especially if there are complications with the will or disagreements between beneficiaries. On average, probate can take between 6 to 9 months, but it could be longer in more complex cases.
If you’re not in a rush to move in, this slower process might not be a problem. However, if you need to move quickly, the delays involved in probate may make these properties less attractive. It’s important to be patient and stay in regular contact with the executor or estate agent to keep track of the progress.
Conclusion
Buying a property in probate can offer potential savings, but it comes with unique challenges. The legal process of probate, auction sales, and potential delays can complicate the process, but for those willing to wait, it can be an opportunity to buy a home at a reduced price. By understanding the laws, timelines, and reasons behind a quick sale, you can decide if a probate property is the right choice for you.