CHARTERED SURVEYOR APPROVED A probate property – that’s a property passed on after the death of a loved one – can be a good fit for an auction sale. Firstly, selling at auction is quick and involves far less paperwork than a conventional sale. It can also be an effective way to sell a home that requires modernisation or renovation, which is often the case with probate properties.
With that in mind, this article explains what you can expect if you decide to sell a probate property at auction. We’ll look at the benefits and discuss how the process works.
Administering the estate of a deceased loved one can be a sensitive time, so the priority is often to sell the property in as pain-free a way as possible. That’s where an auction sale can be beneficial, as it allows you to settle inheritance tax bills, pay outstanding costs and distribute the estate among the beneficiaries quickly.
The benefits of selling probate property at auction include:
Sales proceed quickly – Auction sales proceed quickly, with the process typically taking anywhere from six to 10 weeks. Once the property has been marketed, you can sell at auction and complete the deal just four weeks later.
There’s high demand for properties requiring renovation – You can sell probate properties at auction as seen. There’s no need to modernise or renovate them as you might when selling through an estate agent. Properties that require work are very popular at auction, which is why probate properties tend to do so well.
Sales rarely fall through – Research suggests that over 50% of residential property sales through estate agents fall through before completion. It’s far less common at auction as buyers have to pay a 10% deposit up-front.
You can set your selling price – You can set a reserve price that must be met for the property to sell. If you don’t receive a bid that meets the reserve, the auction house will try to agree a post-auction sale or you can put it up for auction again.
Sales are transparent – Executors like to sell probate property at auction because the process provides fairness and transparency. Everyone can see how the property is marketed and sold, so the executor cannot be accused of foul play, such as underselling.
The first step is to determine the executor of the estate and file it with the probate office. The executor acts as the owner of the property, deciding how to sell it and signing the contract of sale and other legal documents.
As the executor, you cannot sell the property until you have a Grant of Probate, which typically takes between four and 12 weeks. However, you can start marketing the property. Most people run the two processes – marketing the property and applying for probate – in tandem. You can then put the property up for auction when the Grant of Probate is issued.
Here’s a quick run-through to help you understand the process:
You will need to log the executor of the estate with the Probate Office. The executor is usually a family member named in the Will. A solicitor may also be named as the co-executor.
You can do this online or by post. Start this process immediately as it takes time and you cannot sell the property without it.
Look for auctioneers with a successful track record of selling the type of property you have. They should have a good local and national reach, hold well-attended and regular auctions (physical or online), and have staff with qualifications from the Royal Insititute of Chartered Surveyors (RICS). Read their terms of appointment very carefully before you make your choice.
Your auctioneer will be able to value the property or arrange a valuation on your behalf. They will discuss a reserve price with you and the price you can realistically hope to achieve. A good auctioneer will also advise you on what you can do to prepare the property for sale and the clearance, tidying or improvements that would be beneficial. Once you have a valuation, you can calculate and pay any inheritance tax.
You can sell probate properties as they are, without clearing them out or making any repairs. However, it’s usually beneficial to take some steps to prepare the property and make sure it’s neat and tidy. It’s wise to do this before the auctioneer takes photographs for the marketing.
The auction house will typically advertise your property for between four and eight weeks before the auction. If a bidder meets your reserve price, they will pay a 10% deposit and the sale will be completed within 28 days of the auction date.
The auction process is quick and reliable. You can usually complete a sale within eight to 10 weeks of listing your property with an auction house. However, you must have the Grant of Probate before you can complete.
At Eddisons Property Auctions, we have a track record of quick, transparent and secure property sales with one of the highest success rates of any online auction house in the country. Contact us today for your free, no-obligation auction appraisal.
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