Probate properties are no new thing, but unfortunately due to the pandemic, there has been a rise in them. If you are looking to buy or sell a probate property then probate insurance is an absolute must during this.
Let’s take a look at exactly what probate means, the risks involved and how you can make sure you are covered during the conveyancing process and beyond.
What Is Probate?
Probate is simply the legal term for describing the process of dealing with the estate of someone who has died. This can be anything from belongings or cash, but most commonly it refers to property.
Many sellers of these properties are looking for quick transactions, it can be the final piece they need for closure after the death of a loved one. This often means that buyers benefit from a great price and many first-time buyers end up purchasing a probate property for this reason.
Tips For Selling a Probate Property
Selling a probate property is a difficult time as it comes with high emotions. The best thing you can do before it is even placed on the market is to ensure that you have everything in order to begin the conveyancing process.
As the beneficiary of the will, you will need a Grant of Probate. This is a certificate to prove that person has the legal right to ownership of the property that allows you to have full control over the property, without having to legally transfer it into your name.
The pandemic has highlighted the need for Grant of Probate more than ever and the process has now gone fully online and is much quicker than it used to be.
Once you have your Grant of Probate, the next step is to get probate estate insurance. Wills and probate insurance covers you as a seller but also covers the buyer.
Tips For Buying a Probate Property
Buyers can benefit from probate properties in many ways, but the biggest if the bargain price. Typically these properties may have not been updated in many years, so they aren’t turn-key. However, they are great for first-time buyers wanting a cheap price in a great neighborhood or investors looking to add more properties to their portfolio.
While many issues there may be with the property will show within searches and surveys, there are elements that a buyer will typically rely on the seller to provide.
However, when a probate property is being sold, the seller may have never lived in the property or know much about it.
It’s worth paying that extra cash for more through surveys to really get an idea of every aspect of the property, including the boiler and the roof. Standard surveys don’t include this so ask your supplier what extra packages they have. Believe us, it is definitely worth it.
Probate Insurance: What You Need To Know
As a seller, you should always take out probate insurance and as a buyer, your solicitor should ensure this has been done.
Always remember, probate insurance is not the same as home insurance. The seller who has a Grant of Probate must make sure they are fully covered, with their name on the policy and not the name of the deceased.
If the property is going to be empty for more than 30 days, the seller needs to take out unoccupied property insurance. This is because the property is at greater risk of not just burglary but also damage from burst pipes, fire etc as there is no one around to properly care for the property. If selling property in winter, make sure the water is turned off to stop frozen pipes.
Probate insurance doesn’t just cover the seller while they are selling the property, but also the buyer. Therefore, the cover should be moved from one party to the other on completion. The seller commonly pays for this cover for the buy, but it isn’t a legal requirement so be prepared to budget for this.
Probate insurance covers should the worst-case scenario happen and the person who has a Grant of Probate is challenged by another potential beneficiary.
This could be the reappearance of a missing beneficiary, at any stage in the process. Another case could be the discovery of a later will than the one that was executed that names another beneficiary.
Should this happen, it means that the claimant can be financially compensated through the insurance provider and the seller and buyer don’t have to risk the transaction to the property. Even after completion, someone could challenge the new owners, which is why the cover must be transferred to them.
Probate can be a stressful and emotionally draining period is anyone’s life. The best way to make it as smooth as possible is to get cover as quickly as possible, start collating documentation as soon as possible and when in doubt, speak to your solicitor.