Probate properties – what you need to know
If your loved one has died, leaving you with their family home and other assets to dispose of, you should familiarise yourself with the facts surrounding probate properties.
There is no getting away from the fact that probate can be a lengthy process, particularly where valuable assets such as property is involved. The IWC probate team understands that you may wish to sell the property as soon as possible, to avoid heavy maintenance costs and further bills. For this reason, it makes sense to use a probate professional in order to try and move the process along as quickly and smoothly as possible, particularly if the deceased has any outstanding debts.
The added complication of probate formalities and delays can deter many investors from buying a probate property. However, with the rising cost of houses and a shortage of available property across the country, such properties can prove to be an excellent opportunity for investors who are prepared to wait to buy what they want – often at a greatly reduced price.
A probate property valuation must reflect the price of the property at the time of the owner's death. It is possible to value a property yourself but this is rarely recommended; valuing it too low could see you losing money, whilst valuing it too high may mean it will sit on the market for a considerable length of time, running up more maintenance costs.
A RICS chartered surveyor will be able to give you an accurate figure for valuation, which will take into account the current state of the property, any repairs which may need carrying out, and the status of the property market at the time.
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Plans to cap rising house prices could affect probate property sales, it is feared.
Now that we appear to be emerging out of a very difficult economic period, The Royal Institution of Chartered Surveyors (RICS) is concerned that we have not learned the lessons of our past. As house prices begin to rise once more, it is determined that home buyers should not take on bigger mortgages than they can afford. And, possibly more importantly, that lenders should not try to entice potential buyers into doing so.
It is for this reason that RICS is urging the Bank of England to put a 5% cap on annual house price inflation. Other restrictions it is calling for include setting higher deposit amounts. This will undoubtedly price many people out of the market and reduce demand, which will certainly have a knock on effect when trying to sell a property which has been bequeathed.
If these recommendations go ahead, it is envisaged that many probate properties will have to be sold at considerably less than market value, in order to free up capital. This decrease in value will have a direct impact on the inheritance hoped for by families left behind.
Despite facing a housing shortage, Southend Council is currently unable to take ownership of a house which is causing probate property concerns for Southend residents.
The house, which has now been empty for two years, is the subject of legal proceedings involving ownership. Whilst this court case has been ongoing, the property has been left to decline and has suffered vandalism. It is even thought it may be home to a family of foxes.
Residents around the area in which the house is situated, are quite rightly concerned about antisocial behaviour which appears to stem from and around the property. They have therefore signed a petition asking the council to take ownership, thereby repairing the home and offering it to one of the 1,200 people on the council housing register.
This problem is unfortunately typical, with around 2,500 homes standing empty in the Southend area alone – unable to be given to one of the families or individuals waiting on the register. This is as a result of new government measures, says the council, which has see enforcement notice periods increased from six months to two years. Empty dwelling management orders may not be served on the deceased.