Selling a probate property: why the highest valuation is not always the best outcome

That is understandable. A house worth several hundred thousand pounds can represent a substantial part of an inheritance, and family members may already have an idea of what it is worth before the executor has decided how to sell it.

The difficulty is that selling a property as an executor is not quite the same as selling your own home.

The executor is responsible for dealing with the estate’s assets during the administration period. There may be several beneficiaries to consider, costs continuing to accrue while the property remains empty, and different opinions about whether the priority should be price, speed or certainty.

Against that background, simply choosing the estate agent who gives the highest valuation does not necessarily tell you what the best outcome for the estate will be.

A valuation is an opinion, not a sale price

It is quite normal for two estate agents to give different valuations for the same property.

One may believe a higher asking price is achievable. Another may recommend starting lower to generate more interest. Both may be looking at the same property and local market but reaching slightly different conclusions.

Neither valuation guarantees what a buyer will eventually pay.

This distinction can become particularly important when beneficiaries are involved. If an agent suggests a property could be worth £400,000, it is easy for that figure to become fixed in everyone’s mind. A later offer of £375,000 may then feel as though the estate is losing £25,000.

But the real comparison is not necessarily between a £400,000 valuation and a £375,000 offer. It is between the sale options that are actually available.

A property can be marketed at £400,000 without finding a buyer at that level. It might eventually sell for less after several months on the market. Alternatively, demand could be stronger than expected and the eventual sale price could exceed the original valuation.

The valuation is useful evidence about what the property might achieve. It should not be mistaken for a promise.

There is also an important distinction between a value used when dealing with the estate for probate or tax purposes and the price a property might later achieve on the open market. Executors who are unsure which valuation they need, or what it will be used for, should take appropriate professional advice.

The highest number is not always the whole story

The value achieved for an estate property is naturally an important consideration, but that does not mean every decision can be reduced to finding the highest number and accepting nothing less.

Consider two offers. The first is slightly higher but comes from somebody who still needs to sell their existing home and arrange finance. The second is lower but comes from a buyer who is in a stronger position to proceed.

The higher offer may still be the better choice. Equally, there can be circumstances where the greater certainty of the other offer deserves consideration.

The condition of the property matters too. An older house requiring substantial refurbishment may attract a very different pool of buyers from a modern property ready to occupy. An executor could spend money improving it in the hope of achieving a higher sale price, but there is no guarantee that every pound spent will be recovered when it sells.

This is why there can be a difference between the highest possible price and the best overall outcome for the estate.

Price matters, but so do the condition of the property, the strength of the buyer, the expected timescale and the costs the estate may incur while waiting.

Where executors are uncertain about their responsibilities, particularly if there is disagreement over a proposed sale, legal advice should be taken rather than assuming that the highest valuation or highest offer automatically settles the question.

An empty property can keep costing the estate money

It is easy to focus on what a probate property might sell for and overlook what it costs to look after while the estate is being administered.

Depending on the circumstances, there may be insurance, utilities, council tax, gardening, security and general maintenance to deal with. A property may need clearing or cleaning before it can be marketed. Repairs may also be considered if they are necessary or are thought likely to improve its saleability.

Not every property will incur all of these costs, and the legal and tax treatment of particular expenses can differ. The practical point is simply that the money being spent on the property should form part of the executor’s thinking rather than being ignored in favour of the headline sale price.

Suppose waiting another six months might produce a higher offer. That sounds attractive until the executor considers what the estate will spend during those six months, whether the property’s condition could deteriorate and whether there is any real evidence that waiting will result in a better price.

That does not mean an executor should rush a sale to avoid modest holding costs. It means those costs are part of the wider picture.

The same care is sensible when paying for work on the property. Obtaining more than one quotation where appropriate, understanding what is actually included and considering whether the proposed work is necessary can help avoid spending estate money without a clear reason.

Beneficiaries may have different expectations

Probate property sales can become particularly difficult where several people are due to inherit from the estate.

One beneficiary may want the property sold as quickly as possible. Another may believe prices are going to rise and want to wait. Someone else may have spoken to an estate agent, looked at similar houses online or seen a nearby property sell for considerably more.

Those opinions may be worth considering, but they do not establish what the property will sell for. Equally, expecting to inherit from an estate does not necessarily give an individual beneficiary the right to decide the asking price, choose the buyer or determine when a sale should take place.

The precise position depends on the will, the estate and how it is being administered. If there is disagreement about an executor’s authority or responsibilities, that is a matter on which legal advice may be needed.

From a practical point of view, however, good communication can prevent some disagreements from becoming bigger than they need to be.

If an executor can explain how valuations were obtained, what offers have been received, what costs the property is generating and why one option appears stronger than another, beneficiaries have something concrete to consider.

That is very different from simply telling them that the property has been sold for less than somebody once said it was worth.

Keep a record of how decisions were made

Executors already have plenty of paperwork to deal with, but keeping a sensible record of important property decisions can be worthwhile.

That might include valuations, estate agent recommendations, offers received, quotations for clearance or repairs, significant expenditure and relevant correspondence.

The purpose is not to create paperwork for its own sake. It is to preserve the information behind the decisions being made.

Months later, it can be difficult to remember why one quotation was chosen over another, why work was authorised or why one offer was considered preferable at the time. Having the relevant information available makes that reasoning much easier to explain, particularly if beneficiaries later have questions about the sale.

Compare the routes available before deciding

For many estates, selling through an estate agent on the open market will be the appropriate route. It provides exposure to a broad pool of buyers and, where the property is in reasonable condition and there is healthy demand, may give the estate the opportunity to achieve a strong price.

It is not the only route.

An auction may suit some properties. Executors may also consider selling directly to a buyer, particularly where a property needs substantial work or where certainty and timescale carry greater weight.

These options should not be treated as though they produce the same outcome. A quicker or more certain sale may involve accepting less than might potentially be achieved through a longer open-market process. Equally, a higher asking price is of little benefit if it does not result in a buyer who can proceed.

The useful comparison is therefore not simply which option produces the biggest headline number. It is what each route is likely to mean for the estate after considering price, costs, timescale, property condition and the likelihood of the transaction actually completing.

Where Augusta may be able to help

Augusta buys inherited and probate properties directly, including homes that need refurbishment or would otherwise require work before being sold.

For an executor, obtaining a direct offer can provide another option to compare with an estate agent sale, auction or other route. It will not be the right choice for every estate, and the price and terms should be considered alongside the alternatives available.

There is no obligation to proceed simply because an offer has been obtained. Sometimes having another concrete option makes it easier to assess the trade-off between price, time, costs and certainty.

Selling a property from an estate can involve balancing the value of the property with its ongoing costs, the practicalities of the sale and the expectations of several people at an already difficult time.

A high valuation may be encouraging, but it is only one part of that decision. What matters is understanding the options available and being able to make a considered choice about what is appropriate for the estate.

Where there is uncertainty about an executor’s legal duties, the terms of a will, disagreement between beneficiaries or the tax consequences of a sale, appropriate professional advice should be taken.