Selling my mum's house

[rvw]

Pay inheritance tax before completion of sale? How is that generally possible?

As has been said, there may be none payable in this instance. But in general, the sale isn't what triggers IHT: when the property is inherited by the legatee is when IHT is due. The person who inherits can, after all, choose to live in the house so there may not even be a sale.

There are instalment schemes to help legatees find the cash for the tax liability if the property isn't sold at all or if it takes ages.

Capital Gains Tax only becomes an issue if the property is sold for significantly more than the probate value, or if it's sold at a later date.

 

[rvw]

No. This is a cycling forum. It is not a place to give or receive legal advice.

I don't want to be put my name to it.

I've gone back (fairly quickly) through the thread and I don't actually think anyone here is offering legal advice. Stating facts about what you do or don't need professionals for isn't 'legal advice', it's just stating facts.

The summary seems to be:

(a) you don't need to use an estate agent, but some posters think it may be helpful and getting them to do a valuation is useful: this is factually correct
(b) you do not need to use a solicitor for conveyancing (also factually correct) but most posters think it is a good idea
(c) it's a really bad idea to let someone start work in the property before they actually own it - again, I wouldn't say this is legal advice, just plain common sense
(d) you need to make sure you get the best deal going - which may or may not be the neighbour.

If there are facts stated which I've missed which are incorrect (which is entirely possible!) it's a kindness to the OP to correct them, or at least point out which are wrong and suggest avenues to explore for better information.

 

[mr_cellophane]

I did some minor work on my home before completion - board loft, install base and shed in the garden. We had to sign a form saying we would put everything back as was if the sale fell though. Although with that work I doubt we would have had to.

 

[markemark]

I did some minor work on my home before completion - board loft, install base and shed in the garden. We had to sign a form saying we would put everything back as was if the sale fell though. Although with that work I doubt we would have had to.

Risky for you too as the seller could have pulled out for any reason and you'd have been out of pocket.

 

[Jameshow]

8

I've gone back (fairly quickly) through the thread and I don't actually think anyone here is offering legal advice. Stating facts about what you do or don't need professionals for isn't 'legal advice', it's just stating facts.

The summary seems to be:

(a) you don't need to use an estate agent, but some posters think it may be helpful and getting them to do a valuation is useful: this is factually correct
(b) you do not need to use a solicitor for conveyancing (also factually correct) but most posters think it is a good idea
(c) it's a really bad idea to let someone start work in the property before they actually own it - again, I wouldn't say this is legal advice, just plain common sense
(d) you need to make sure you get the best deal going - which may or may not be the neighbour.

If there are facts stated which I've missed which are incorrect (which is entirely possible!) it's a kindness to the OP to correct them, or at least point out which are wrong and suggest avenues to explore for better information.

E) you probably want several valuations just in case estate agent is in cahoots with developer.

 

[siadwell]

Thanks for all the advice everyone.
The neighbour has come back with an offer £50k more than the figure given to me by the initial agent.
He has clarified that he wouldn't want to do any work before the sale went through, but he would want to have an agreement in place before he got architects and engineers involved in drawing up plans.
I have asked 3 more estate agents to give me a valuation, so will wait to see what they come back with.

 

[Kingfisher101]

Thanks for all the advice everyone.
The neighbour has come back with an offer £50k more than the figure given to me by the initial agent.
He has clarified that he wouldn't want to do any work before the sale went through, but he would want to have an agreement in place before he got architects and engineers involved in drawing up plans.
I have asked 3 more estate agents to give me a valuation, so will wait to see what they come back with.

Which tells you that you will get a lot more on the open market with it properly advertised. The builder wants to build on it.
I'd tell him to compete with everyone else, he wont be doing you any favours.
Tell him to get on his bike re any agreement. A place is only yours when its properly sold.

 

[Electric_Andy]

Which tells you that you will get a lot more on the open market with it properly advertised. The builder wants to build on it.
I'd tell him to compete with everyone else, he wont be doing you any favours.
Tell him to get on his bike re any agreement. A place is only yours when its properly sold.

I wouldn't say that; the agent also wants to make maximum buck on it so there is no point in them quoting under market value (which is the value that would be "in open competition"). I agree with the rest though, he may want to extend and/or refurbish completely. But to the OP I'd say there is little point in hoping that the property will remain unchanged for sentimental purposes. For all you know the next buyer could say "I want to live in it", and then knock it down in 6 months time. Or could refurbish it and then sell on for a higer price to developers.

I would wait and see what the other agents come back with, and also consider that their valuation doesn't mean someone will pay that for it. My partner has just had to drop hers 20k after the agent said it would sell easily for more. A lot of the homes we've been viewing have been reduced recently. So if you're happy with the neighbour's offer it might be less hassle to accept it rather than wait for the right buyer (who may then be in a chain and want to wait months to sell their house)

 

[T4tomo]

For all you know the next buyer could say "I want to live in it", and then knock it down in 6 months time. Or could refurbish it and then sell on for a higer price to developers.

i used to live on 1930s built "estate". The corner plats were rife for selling off half the garden and building another house at the end of them.

An old couple sold their corner house to a "young family" because the said they wanted a big garden for the kids and wouldn't do such a thing.
2 years later guess what.....

 

[Profpointy]

I wouldn't say that; the agent also wants to make maximum buck on it so there is no point in them quoting under market value (which is the value that would be "in open competition"). I

Not strictly the case, or not in the way tou say anyway. Let's say the estate agent makes 2% of a £250k house - £5k total. If he can do that quickly and with relatively little effort that's a lot more profit than making an extra 2% on 10 percent more if it's a double the effort to get another £500. The profit is in a quick sale.

 

[CXRAndy]

My mum died earlier this year and left me her house, which is a large bungalow on a good-sized plot of land in a sought-after area of a Midlands town. The bungalow itself is only 2 bed and 1 bathroom, as it was built by my parents before I came along. It has also had very little done to it for about 20 years, so is rough around the edges.
While I wait for probate to come through, someone who lives near the bungalow has approached me and asked to buy it. He is in his 70s but has been in the building trade for decades and he wants to do it up before he and his wife move in as their last home. I quite like the idea that a developer doesn't buy it to rip it down and cram 3 executive homes onto the site.
For the purposes of valuing mum's estate, I got an estate agent to look at it and they said it was hard to price, as houses in this area vary widely and some have had a lot of money spent on them by people moving into the area. However, the agent agreed with my proposed ballpark figure.
This potential purchaser is having his own house valued tomorrow and wants the agent to also give him a price for mum's house. If he's happy with the numbers, he's willing to make me an offer.
Couple of slight issues:
1) I'm a little bit nervous about doing this without an estate agent involved, although I don't think they'd really be earning their fee if I already have a buyer lined up.
2) The potential purchaser would like to have some work done inside the house before it's ready for them to move into, so he hinted he might want to start this before I have probate.
3) I live 3 hours drive away, so will have to do pretty much everything remotely.

Any advice?

Don't let anyone touch the building until you have it legally signed over to you. Use a reputable solicitor and Estate agent of it's difficult to be there for viewings

 

[Buck]

All good thoughts and advice. I am going through something similar currently as my dad has gone into care and the house needs to be sold to pay as he is classed as “self funging”

That aside, our Estate Agent was able to market the property to their database and we have had 12 viewings in just two weeks and three offers.

As @Profpointy has said, £10,000 only generates £80 of commission (My EA fees are 0.8% + VAT) in my example so he/she is not going to push the price for a meagre few hundred at the risk of a slow sale.

I spoke at length to our Estate Agents re the development potential of the house (ability to extend combined with the location/views but needing a full refurb). The price it’s on at is based on all of this i.e. money that needs to be spent, and the potential of the house/plot.

Your Estate Agents need to do that too and hopefully you’ll get a true valuation based on its potential and if your mum’s neighbour can see this, your Estate Agents should too !

 

[PK99]

As @Profpointy has said, £10,000 only generates £80 of commission (My EA fees are 0.8% + VAT) in my example so he/she is not going to push the price for a meagre few hundred at the risk of a slow sale.

An idea I have heard of is to agree on a variable or incentivized commission.
eg 0.8% on any sale up to £200k, 10% of any excess over £200k
ie commission on £200k sale = £1600 Commission on £210k sale = £2600

 

[Jameshow]

Have you thought about putting an uplift covenant (cannot remember the technical word out touring!) On the sale so that any development grants you an uplift down the line?? It might not work but I've seen quite a few properties and land with such a restriction applied.

 

[Gunk]

Have you thought about putting an uplift covenant (cannot remember the technical word out touring!) On the sale so that any development grants you an uplift down the line?? It might not work but I've seen quite a few properties and land with such a restriction applied.

Known as an Overage

https://www.stephensons.co.uk/site/businesses/srvrealestate/property-guides/overage/

Some lenders won‘t lend on a property with an overage clause