Buying Parents House - Market Value Question
Discussion
Long time lurker, first time poster 
Situation: Mum has gone into a care home, house needs to be sold. Myself and my sister are the only other people in the equation. We have power of attorney.
My sister and her daughter are thinking about buying the house and flipping it or doing a buy to let. I have no problem with this. The main issue is house value. They have a ceiling of £200k.
I have had the following valuations: Estate agent 1 = £190k, Estate agent 2 = £200k, Estate agent 3 = £250k. Independent valuer = £235k. That gives an average of £219k ish.
If my sister takes it for £200k, are we doing anything wrong? Could you argue that it's going to be near enough market value in this worst-ever-time-to-sell-a-house period? Any comebacks from anyone? Should we be asking for legal guidance?
Situation: Mum has gone into a care home, house needs to be sold. Myself and my sister are the only other people in the equation. We have power of attorney.
My sister and her daughter are thinking about buying the house and flipping it or doing a buy to let. I have no problem with this. The main issue is house value. They have a ceiling of £200k.
I have had the following valuations: Estate agent 1 = £190k, Estate agent 2 = £200k, Estate agent 3 = £250k. Independent valuer = £235k. That gives an average of £219k ish.
If my sister takes it for £200k, are we doing anything wrong? Could you argue that it's going to be near enough market value in this worst-ever-time-to-sell-a-house period? Any comebacks from anyone? Should we be asking for legal guidance?
As I understand it the local authority could come after you for care home fees if there is a transfer below market value.
So you would need to solid evidence to prove that it was sold at open market value, might be a bit difficult if they intend to flip it and make a profit.
You might also want to read this in regards to your POA.
https://www.gov.uk/enduring-power-attorney-duties/...
So you would need to solid evidence to prove that it was sold at open market value, might be a bit difficult if they intend to flip it and make a profit.
You might also want to read this in regards to your POA.
https://www.gov.uk/enduring-power-attorney-duties/...
There is a lot of ‘depends’ here, but your obligations under PoA are solely to obtain the best result for your parents. If the house has been valued at approx £220K, how would selling it for £200K be justified as the best outcome for your parents? (Whoever it was sold to)
If the sale is also to someone who holds a PoA, you are going to make that decision harder to justify. And any of these outcomes is going to be open to scrutiny from the office of the public guardian.
If the sale is also to someone who holds a PoA, you are going to make that decision harder to justify. And any of these outcomes is going to be open to scrutiny from the office of the public guardian.
I should add: the official name of the buyer will be my sister's daughter. My sister will be a silent partner and not on the deeds (sounds even more dodgy now!) So staying in the family, but POA member not buying it.
How do you justify market value though? Could I just apply the two lowest figures and say £200K is best price. Even the three at 190,200 & 235 give a £208 average. Plus my mum would save on estate agent fees.
How do you justify market value though? Could I just apply the two lowest figures and say £200K is best price. Even the three at 190,200 & 235 give a £208 average. Plus my mum would save on estate agent fees.
72_square said:
I should add: the official name of the buyer will be my sister's daughter. My sister will be a silent partner and not on the deeds (sounds even more dodgy now!) So staying in the family, but POA member not buying it.
How do you justify market value though? Could I just apply the two lowest figures and say £200K is best price. Even the three at 190,200 & 235 give a £208 average. Plus my mum would save on estate agent fees.
assuming the estate agents are giving you the value they would market it at, isnt it always done with the assumption that ACTUAL sale price would be much lower?How do you justify market value though? Could I just apply the two lowest figures and say £200K is best price. Even the three at 190,200 & 235 give a £208 average. Plus my mum would save on estate agent fees.
when was the last time anyone paid 100% of the asking price (yeah yeah, london, boom years etc)
springfan62 said:
As I understand it the local authority could come after you for care home fees if there is a transfer below market value.
So you would need to solid evidence to prove that it was sold at open market value, might be a bit difficult if they intend to flip it and make a profit.
You might also want to read this in regards to your POA.
https://www.gov.uk/enduring-power-attorney-duties/...
Actually, reading this bit:So you would need to solid evidence to prove that it was sold at open market value, might be a bit difficult if they intend to flip it and make a profit.
You might also want to read this in regards to your POA.
https://www.gov.uk/enduring-power-attorney-duties/...
You can buy or sell property on the donor’s behalf if it’s in their best interests.
Contact OPG if:
the sale is below the market value
you or your family want to buy the property
you’re giving it to someone else
They can advise you on whether you need to apply to the Court of Protection about this.
Means that it would need to go to the court as a minimum for point 2), if not point 1) as well
As has already been stated your role as Attorney is to achieve the best price possible.
If the house had been sale for months at say £220k and then your Sister offered the £200k ,arguably at that stage you have done nothing wrong.
Selling it immediately at £200k might come back to bite although I would think it unlikely from the local authority.
Possibly more of a chance of a family member objecting maybe.
I had to sell my Aunts house for her using LPA powers and that definitely needing a lot of money spending on it but the care home was persuaded to wait for what I then owed them until it was sold.
If the house had been sale for months at say £220k and then your Sister offered the £200k ,arguably at that stage you have done nothing wrong.
Selling it immediately at £200k might come back to bite although I would think it unlikely from the local authority.
Possibly more of a chance of a family member objecting maybe.
I had to sell my Aunts house for her using LPA powers and that definitely needing a lot of money spending on it but the care home was persuaded to wait for what I then owed them until it was sold.
72_square said:
Long time lurker, first time poster
Situation: Mum has gone into a care home, house needs to be sold. Myself and my sister are the only other people in the equation. We have power of attorney.
My sister and her daughter are thinking about buying the house and flipping it or doing a buy to let. I have no problem with this. The main issue is house value. They have a ceiling of £200k.
I have had the following valuations: Estate agent 1 = £190k, Estate agent 2 = £200k, Estate agent 3 = £250k. Independent valuer = £235k. That gives an average of £219k ish.
If my sister takes it for £200k, are we doing anything wrong? Could you argue that it's going to be near enough market value in this worst-ever-time-to-sell-a-house period? Any comebacks from anyone? Should we be asking for legal guidance?
Are the valuations that you've got all verbal? If so I'd get estate agents 1 and 2 to give those in writing and then take an average of those and then in the future if there's any argument about the value you can say that you got 2 estate agents to value the property and took the average. Situation: Mum has gone into a care home, house needs to be sold. Myself and my sister are the only other people in the equation. We have power of attorney.
My sister and her daughter are thinking about buying the house and flipping it or doing a buy to let. I have no problem with this. The main issue is house value. They have a ceiling of £200k.
I have had the following valuations: Estate agent 1 = £190k, Estate agent 2 = £200k, Estate agent 3 = £250k. Independent valuer = £235k. That gives an average of £219k ish.
If my sister takes it for £200k, are we doing anything wrong? Could you argue that it's going to be near enough market value in this worst-ever-time-to-sell-a-house period? Any comebacks from anyone? Should we be asking for legal guidance?
I think we could sort out the market value issue. The stumbling block would be the court of protection. I've told her to get a quote from a solicitor to sort out this part. The cost of this may make or break it for her. (No experience with the COP, I presume it would be a headache to try and sort it yourself?).
Ignore anything from an estate agent. The "valuations" are not binding and they would not stand up if challenged. They are a wet finger in the air, with no recourse and not fit for the purpose you require.
You will need a formal Red Book valuation, undertaken by a Chartered Surveyor. This is a formal opinion of value, which will be robust and the valuer will provide you with his/her PI and full liability. It is unlikely the Valuation Officer would challenge a report undertaken by a recognised surveying practice, especially if it is likely they are familiar with them.
Find a local firm of Chartered Surveyors (they will usually state RICS membership). Many are also estate agents so they will be selling as well as valuing and explain what you need and why.
I think you should get legal advice because i had to jump through a number of hoops to sell my mother's house and the money went her estate not anyone else
Couple questions
How is you Mothers care being paid for currently ?
Because the council will want paying and if there are assets over £23,000 then it will be not free
My Mother was in care for just under 5 years and it cost just over £375,000
My mother had to take mental capaciy test concerning gifting she failed it so the money from the sale could be not gifted
How would it be split the procedes between the 3 people
what happens if there is falling out between family members
I hope the above helps
Couple questions
How is you Mothers care being paid for currently ?
Because the council will want paying and if there are assets over £23,000 then it will be not free
My Mother was in care for just under 5 years and it cost just over £375,000
My mother had to take mental capaciy test concerning gifting she failed it so the money from the sale could be not gifted
How would it be split the procedes between the 3 people
what happens if there is falling out between family members
I hope the above helps
Castrol for a knave said:
Ignore anything from an estate agent. The "valuations" are not binding and they would not stand up if challenged. They are a wet finger in the air, with no recourse and not fit for the purpose you require.
You will need a formal Red Book valuation, undertaken by a Chartered Surveyor. This is a formal opinion of value, which will be robust and the valuer will provide you with his/her PI and full liability. It is unlikely the Valuation Officer would challenge a report undertaken by a recognised surveying practice, especially if it is likely they are familiar with them.
Find a local firm of Chartered Surveyors (they will usually state RICS membership). Many are also estate agents so they will be selling as well as valuing and explain what you need and why.
That was the £235k valuationYou will need a formal Red Book valuation, undertaken by a Chartered Surveyor. This is a formal opinion of value, which will be robust and the valuer will provide you with his/her PI and full liability. It is unlikely the Valuation Officer would challenge a report undertaken by a recognised surveying practice, especially if it is likely they are familiar with them.
Find a local firm of Chartered Surveyors (they will usually state RICS membership). Many are also estate agents so they will be selling as well as valuing and explain what you need and why.
72_square said:
COP required if you sell to a POA or family member
Ah ok. Have just looked at the earlier replied to link and seen that although it says contact the OPG to see if actually needed. Hopefully you won’t as think anything to do with the COP can take 6 months to arrange at least apparently.
If you speak to the OPG I would advise contact by email with your question as I found them rarely if at all available by phone !
Blue Mk8 Golf R said:
I think you should get legal advice because i had to jump through a number of hoops to sell my mother's house and the money went her estate not anyone else
Couple questions
How is you Mothers care being paid for currently ?
Because the council will want paying and if there are assets over £23,000 then it will be not free
My Mother was in care for just under 5 years and it cost just over £375,000
My mother had to take mental capaciy test concerning gifting she failed it so the money from the sale could be not gifted
How would it be split the procedes between the 3 people
what happens if there is falling out between family members
I hope the above helps
The sale money will go to her estate (but it obviously needs to be market value or very near to it)Couple questions
How is you Mothers care being paid for currently ?
Because the council will want paying and if there are assets over £23,000 then it will be not free
My Mother was in care for just under 5 years and it cost just over £375,000
My mother had to take mental capaciy test concerning gifting she failed it so the money from the sale could be not gifted
How would it be split the procedes between the 3 people
what happens if there is falling out between family members
I hope the above helps
She currently has enough funds in the bank for about a year of care home fees, after that she will need the house money
We are not looking for any money to be gifted (I don't think you can over the £3k limit anyway?)
There will not be a split of any monies: sister buys house, mum gets money, money pays for care. Anything left of mum's money when she goes will be subject to the will/probate
Forgot to mention earlier that another alternative once the house is sold is to consider an immediate needs annuity.
They are very expensive but depending on your mums age and health etc might ( I stress that word ) ensure that her ability to remain in the chosen care home for perhaps much longer than the pure proceeds last.
I did a lot of work on this when my Aunt went into the chosen care home so happy to talk privately with you if that helps at all given otherwise it’s a very long bit of typing !
They are very expensive but depending on your mums age and health etc might ( I stress that word ) ensure that her ability to remain in the chosen care home for perhaps much longer than the pure proceeds last.
I did a lot of work on this when my Aunt went into the chosen care home so happy to talk privately with you if that helps at all given otherwise it’s a very long bit of typing !
72_square said:
Castrol for a knave said:
Ignore anything from an estate agent. The "valuations" are not binding and they would not stand up if challenged. They are a wet finger in the air, with no recourse and not fit for the purpose you require.
You will need a formal Red Book valuation, undertaken by a Chartered Surveyor. This is a formal opinion of value, which will be robust and the valuer will provide you with his/her PI and full liability. It is unlikely the Valuation Officer would challenge a report undertaken by a recognised surveying practice, especially if it is likely they are familiar with them.
Find a local firm of Chartered Surveyors (they will usually state RICS membership). Many are also estate agents so they will be selling as well as valuing and explain what you need and why.
That was the £235k valuationYou will need a formal Red Book valuation, undertaken by a Chartered Surveyor. This is a formal opinion of value, which will be robust and the valuer will provide you with his/her PI and full liability. It is unlikely the Valuation Officer would challenge a report undertaken by a recognised surveying practice, especially if it is likely they are familiar with them.
Find a local firm of Chartered Surveyors (they will usually state RICS membership). Many are also estate agents so they will be selling as well as valuing and explain what you need and why.
Gassing Station | Finance | Top of Page | What's New | My Stuff