WORDS: DEBBIE HATHWAY :: PHOTOS: SUPPLIED
Andrea Tucker, director at MortgageMe, sheds light on dealing with the legalities of buying a home under often-trying circumstances.
Acquiring a property from a deceased estate constitutes a unique property transaction. Tucker underscores the importance of understanding the intricacies associated with such dealings, including potential extended waiting periods.
“Owing to additional requirements that enable the executors of a deceased estate to sell immovable items, including property, long delays in the transfer process can be expected,” she says.
However, purchasing from deceased estates doesn’t automatically guarantee a bargain, as Tucker points out. “Buyers might be lucky enough to snap up a house at below market value, but generally executors are looking for a market-related price to satisfy the needs of the heirs and beneficiaries of an estate.”
The initial challenge for prospective buyers is identifying property sold by executors. This involves checking the Government Gazette or newspaper notices known as “advertisements for creditors”. These notices, appearing on Fridays, announce the settlement of a deceased estate and invite creditors with claims against it to come forward.
Tucker advises property investors to contact executors directly. “Buyers can contact the executors and ask if there is any property in the estate and if it matches their search criteria and budget. It’s important when speaking to the executor to establish upfront that they have the mandate and an appointment by the Master of the High Court to administer the sale.” Legal clearance for a sale requires 100% agreement of all heirs or beneficiaries of an estate. Without this agreement and the executor’s appointment by the Master, the sale cannot proceed.
Once buyers confirm that all necessary processes have been followed, the subsequent offer to purchase, acceptance, and transfer procedures are the same as those for a regular property purchase.
However, there are distinct considerations for buyers in acquiring a property from a deceased estate. Tucker notes, “It may be that a house being sold as part of a deceased estate has been standing empty for some time, or it may have been neglected in the last months of the deceased person’s life.” In such cases, buyers should conduct a thorough professional building inspection before signing the offer to purchase, with repairs stipulated as a sale condition.
While outstanding rates, taxes, and utility bills are typically settled from the estate’s proceeds, buyers should seek clarity on any remaining amounts owed by the estate concerning the property.
Anticipate delays in the transfer process and negotiate a suitable occupation date and potential occupational rent if you, as the successful buyer, wish to move in before completing the purchase. This allows for budgeting during the often-protracted period before legal ownership is finalised.
Tucker emphasises caution for buyers, stating, “While there may be price benefits to buying a property from a deceased estate, the process is not always straightforward.” She recommends thoroughly investigating the property’s condition, potential co-ownership with a living relative, tenant agreements, and any historical debt before finalising the purchase.