Can I buy a house that's in probate?.

First things first, let’s answer the question. Yes, you can buy a house that’s in probate and it can be a great way to find a fantastic and affordable home or investment property, especially if you don’t mind doing a bit of renovation. The process might not be quite as straightforward as a traditional purchase though.

In this article, we explain what probate is, go through some of the perks and pitfalls of buying a house in probate and ask one of our Together experts what to look out for when buying one of these properties.

What is probate?

If the property you’re looking to buy is in probate, it means that it belonged to someone that’s passed away and the sale is being handled through the legal process of settling their estate.

The process, started by a family member of the deceased, an executor named in their will, or a lawyer, makes sure that any outstanding debts they may have had are paid off and that their personal assets (such as their property and savings) are distributed properly.

Probate only applies to properties and assets solely owned by the person that has passed away as jointly owned assets will go to a surviving partner or owner. It’s also not required when the estate’s total value is below a threshold set by the bank or building society, which is typically under £5,000 but can be as high as £50,000 for some institutions.

What are the benefits of buying a house in probate?

Whilst buying a house in probate might bring up some unexpected challenges, which we’ll talk about later, it can also open up some great opportunities for people looking to buy their next home and for investors seeking out their next project.

Here are some of the main benefits:

• More affordable properties – Many probate properties are priced to sell quickly. This could be because the seller(s) need funds from the sale to cover other debts that the deceased person had, or they may simply want to wrap up the inheritance process and distribute the funds quickly.


• Less competition – Some buyers are put off when they hear that a property is in probate, as it can be more complex and can take more time to complete (especially if there is a dispute). If you’re interested in the property, this can be good news as you’re far less likely to be gazumped by another buyer.


• Potential for renovation – Many probate homes are older buildings that may need some refurbishment or modernisation. This can be ideal for home buyers looking for a bargain that they can make their own, and investors looking to add value to a property to sell or rent.

What are the challenges of buying a house in probate?

Buying a house in probate can be a bit more complex and can take more time to complete. But it can still be worth it as long as you’re prepared for the process.

Here are a few things that you should consider:

• Legal complications – If there’s a dispute between inheritors, or the ownership of the property is unclear, the process can stall (and potentially lead to your mortgage offer lapsing if it takes too long to settle). In some rare cases, court approval may also be needed for the sale to be completed.


• Delays – Even without disputes, the probate process typically takes between six to twelve months in the UK, although more complex cases can take up to two years.


• Sold as seen – Although buying a property that needs some renovation can be a great investment, the property may have fallen into a state of disrepair that the executor of the will may not be aware of (such as Japanese Knotweed or a leaking roof). These are problems that might only be discovered further down the line after a valuation and may mean some lenders refusing a mortgage or withdrawing an offer.

Summary

We spoke to Scott Clay, Director of Together Premier here at Together, for his advice to those looking to buy a home that’s in probate.

“My advice to anyone planning to buy a property in probate is to be patient and make sure you have good advisers, including a good solicitor acting for you. You need to be upfront with your mortgage lender about the condition of the property and make sure they are fully aware of the timescales involved to manage everyone’s expectations.

Anyone looking to buy a property in probate should also add 20 percent to their budget to cover the cost of remedying any previously unknown problems. It is also worth contacting the house’s current owner to ask whether they can keep up to date with small maintenance jobs such as gardening while waiting for probate to be granted, as small jobs can often become problematic if left over many months.”

As probate properties can often be unusual or have a few issues that need fixing, some lenders may reject your application based on criteria alone.

At Together, we use a common-sense approach that means we can be more open to lend on a wider selection of property types and conditions. Check out our personal mortgages and Buy to Let mortgages for more information or get in touch with our team to see how we can help.