Property: How to overcome the probate property pitfalls

A house can prove a headache as well as a windfall if you are left one in a will.
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THE SIGNS are there: an overgrown garden, peeling paintwork and a lifetime of "treasures". Someone dies and their house goes up for sale, a beacon for bargain-hungry buyers. But one person's bargain is often someone else's heartache.

Peter Bateman's elderly father died recently, leaving him with a large, dilapidated 1930s semi on the outskirts of Birmingham. Peter is an only child and, as executor and sole beneficiary in his father's "clear and brief" will, has decided to sell: "It's a huge family house where I grew up and went to school, but I could never move back."

Peter lives in London. Has distance complicated matters? "There have been lots of practical things to sort out, like bills and services, so I'm now very intimate with the M6. I searched the house for dad's old papers and deeds which I finally found under the bed. But it's hard tackling the legal stuff when you're in an emotional state."

Legally Peter must have the house and all assets valued for grant of probate, the process of proving a will's validity, and was advised by his solicitor to use a reputable agency. He chose a local agent to value the house and paid pounds 60 plus VAT, which is deducted if Peter instructs the agent, although there is no obligation.

What happened when Peter got his valuation six weeks later? "I had to swear an oath before an independent solicitor. It was supposed to be deadly serious, but it was Dickensian. He virtually banged a hammer and barked `that will be pounds 7 sir'. It was quite surreal," adds Peter, who wants a quick sale to avoid the upkeep of the house.

Conversely Caroline Sherry, partner at London solicitors Glazer Delmar, is surprised to find that people selling probate properties favour premium prices over quick sales: "If you're only getting a sixth of the proceeds it makes little difference."

Buyers and sellers imagine the process will be complicated by the additional grant of probate, but this is not usually so. It can take longer if an estate is valued at over pounds 230,000, the nil rate band threshold, which makes the beneficiary liable for inheritance tax. Caroline Sherry finds probate sales are often faster: "It can be easier and quicker. The property is usually empty and you know it's the end of the chain."

There is a slight caution for buyers. "Executors frequently have limited knowledge of the house unless they are living there. When they answer preliminary enquiries they can speak only for the period in which they have been selling," says Caroline, who advises talking to neighbours to determine fence ownership and potential noise nuisance.

Jeremy Galloway, of Galloways estate agency in south London, echoes the view that probate is easier than you might expect, unless you are dealing with a transatlantic committee: "We've had cases of executors in Canada, America, all over the world and despite the ease of faxes it can be hard as you must contact all of them if there are developments."

He cautions against leaving properties empty, particularly in winter months, because of burst pipes or squatters: "Assets quickly become liabilities and insurance may not cover damage. You could do better taking the money and investing elsewhere."

How easy are probate properties to sell? "It depends how ghastly they are. Many are older and perhaps not over-decorated, but buyers like not having to strip out unnecessary stuff. If it's the worst house in the best road there should be no trouble selling."

Jeremy advises sending unwanted furniture to auction, employing a contract cleaning firm, and cutting grass to "ankle rather than chest height" to show properties in their best light. "I once found what should have been a spacious Victorian front room stacked from ceiling to floor with newspapers, you couldn't even get in," he says.

Paul Tolliday and Julia Bolland fell in love with an architect-designed house left by an "eccentric" elderly woman who had died. They bought it before selling their old house. "It was a bargain and extremely unusual for Lincolnshire," says Paul.

Mortgage consultant Paul and Julia's purchase was swift, but their sale wasn't, leaving them with a problem. "We took out a bridging loan and had to rent out our old house. It was hard watching a cherished home getting shabby," says Paul remembering his ex-tenants: "A dolly bird who looked immaculate, but hated housework" and "two lads who treated the place like a doss-house."

The house eventually sold four years later costing Paul and Julia pounds 10,000 on their loan. Would Paul do the same again? "No, but we love our house. The windows are all different shapes and there's an enormous skylight running the length of the kitchen." Why was this house cheap? "I think sellers of probate properties become greedy, they just want to get their hands on the money quick," he adds.

Paul and Julia are happy and the purchasing price compensated for additional expenses, but family relationships frequently complicate sales. Sally, Helen and James are beneficiaries to their mother's estate, a cottage in Chislehurst, Kent, which Sally and Helen want to sell, but which James wants to buy, at the right price.

"James doesn't have his own property so feels he deserves the house," says Sally. "While he was travelling Helen and I worked hard and both own flats, but we want the money from the house to improve our properties. We don't mind James buying us out, at market value," she adds.

Probate may be challenged if you sell property within the year for less than its valuation, although Caroline Sherry says this is rare. Challenges could occur if a house sells for substantially more, but this seems inevitable in a rising market, particularly if the process is lengthy.

Sally, Helen and James are still wrangling and a council tax demand has prompted the latest dispute. "The house was exempt for six months from the date of probate, but now we must pay 50 per cent because it's been longer. If James won't get his finger out he should pay," says Sally.

Glazer Delmar: 0171 6398801; Galloways: 0181 7666111.

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