Property, probate and insights for professional executor

Managing probate as a professional executor is not easy. The work involved is usually extensive, and the responsibility of acting in the best interest of the estate is solely on your shoulders.

Property is often the main focus of probate as it’s usually the biggest part of the beneficiary’s inheritance. Getting the process wrong can result in complaints or a claim of negligence, so it’s important to make sure you’ve considered all the options and thought about specialist property support.

A different way to manage probate

I got into property almost 30 years ago following the death of my grandad, someone I regarded as a father figure. He was far too young when he passed away after having cancer, and the impact was devastating. My grandmother took on the dealings of the estate with a solicitor and an estate agent she chose herself. 

While the legal side of things went well, the property side of things became a nightmare. Once she moved into her new bungalow, it became apparent that the estate agent had taken advantage of her lack of experience in property dealings and undersold the home she shared with her husband for well over 40 years.

This made me want to work to ensure other people did not have this same experience.

Twenty years later, I found a way of making this happen with a business partner who shared my vision and belief in our work. When my co-owner Helen Graham and I established our probate property support service, PLG, we wanted to make life easier for people acting as executors. Our aim was to integrate our services into their way of working to return fee earning time, by offering specialist property support from an experienced team that understood probate.

The number of probate cases involving property is increasing every year as the UK population grows – so the number of hours solicitors spend chasing up feedback and paperwork, handling negotiations and liaising with other executors and beneficiaries is also increasing.

Over the last decade this new way of working has made such a positive difference to the way probate is processed. More and more law firms are seeing the benefit of outsourcing this major task while still enjoying full control throughout.

Even with changes and delays to obtaining the grant of probate, the ability to manage what can be a drawn-out process and to offer clients a shorter wait for their inheritance means that files are closed and fees settled much more quickly.

Routes to selling a property 

An executor will be expected to make the right choice about how the property is sold. Originally there were two options – placing the property with an estate agent or arranging for it to be auctioned.

Then, around 11 years ago, specialist property support was introduced to the legal sector. I know personally how well this was received as the concept was my own. This was a response to the issues executors were facing when selling through the traditional routes.

There were issues with both existing routes. When dealing directly with estate agents, there was often a lack of regular updates and feedback on viewings, issues with valuations being too high (to win instruction) or too low (due to it being a probate sale) and sellers being advised to take offers lower than the valuation. Often there could be a lack of communication and understanding about the probate process and length of timelines. This could lead to sales falling through and a drop in the sale price.

There were also a host of issues with auction sales. The reserve price is commonly set much lower than the achievable sale price to generate higher interest in the property. This sounds great, but if the interest doesn’t materialise, the property will sell under market value. Additionally, the buyers at auction are mostly investors rather than people looking for a home, and they won’t pay more than they need to. Finally, if the property fails to sell at auction, you then need to sell through an estate agent, dealing with the problems outlined above.

Based on these issues, and working with leaders in the sector, such as Gill Steel, we’ve been able to establish what services are needed – and how to keep the legal sector compliant when using them.

The drawbacks of ‘fee-free’ options

New options that make strong promises are always being introduced, such as ‘fee-free’ property sales. These indicate a zero pounds selling fee, or agent commission, to keep more money with the estate. But all is not what it seems.

The terms and conditions often show that the fee-free option doesn’t include photos or viewings carried out by the agent, and won’t be listed on Rightmove – not the best option for a quick sale at the best price.

Another ‘fee-free’ option involves getting the buyer to pay your selling costs. This involves an open house event with appointments for prospective buyers to view the property on their own. Follow up calls are made by the company representing the property on behalf of the solicitor. If an offer is made by one of the viewers, this buyer will then be told they need to pay the selling fee.

This turns the selling fee into a buyer fee. With buyer fees at a figure of around 3% plus VAT, and a minimum of £3,500 plus VAT, this is much higher than what you would pay to sell a property. With the average commission in the UK being 1.5% plus VAT this would cost beneficiaries more than double this amount.

With this also comes a non-refundable ‘reserve fee’ of £500. This is an admin fee, generally paid upon the offer being agreed, which doesn’t come off the final sale price.

If the average UK average house price is £302,000, the resulting purchase fee will be £9,060 plus VAT (£10,872 inclusive). Factoring in the reserve fee, the buyer will need to spend £11,372. This is before they have even factored in selling agent and conveyancer fees, or any searches, surveys and specialist reports.

The money for this can’t come from a mortgage lender, as they don’t incorporate related costs into a loan. This means the buyer will have to find the money themselves or reduce their deposit and increase their mortgage, adding the fees to their loan and incurring interest. This is on top of any fees from the sale of their own property.

In most cases, the purchase costs are negotiated off the final sale price and it will end up costing the estate more money than any other form of property sale. As the number of viewings will be lower than a standard sales process, it could also be empty for longer, resulting in other additional costs.

Watch out – what seems like a very attractive option at a first glance could end up costing the estate thousands of pounds.

Serving the estate’s best interests 

We have an amazing team who are all invested in our approach, which is why we are trusted and relied upon by legal professionals across the UK.

The services we offer are cost effective, always deliver the best results, and the fees are fair and transparent. We treat our customers with the same respect as the legal professionals we work with.

By keeping our legal clients compliant, and by ensuring the estate’s best interests are always at the centre of what we do, we are truly making a difference.

I am passionate about this subject, something I hope comes across here – but we all should be. People turn to us at their most vulnerable time, when emotions are raw. It is our responsibility, as probate professionals, to do the best we can by them.