Probate Auctions: Selling Estate Contents and Property After a Death
In brief
Auction is the usual route for turning estate contents into cash, and an increasingly common one for property. For chattels, a saleroom charges the seller a commission of around 15% to 25% plus VAT and other fees, sets a reserve with you, and pays out three to five weeks after the sale. Property auctions need the grant of probate before completion. In both cases an arm's-length auction price is strong evidence of value, which is why the valuation should come first and the auction second.
Two Kinds of Probate Auction
The phrase covers two different things. Most often it means the sale of a deceased person's belongings, from a single ring to the entire contents of a house, through an auction house. Less often it means the sale of the property itself at a property auction, which executors choose for speed, certainty and a clean sale without a chain.
From the buyer's side, probate lots and probate properties have a reputation for value: executors want a sale, the goods are fresh to the market, and the estate has no emotional attachment to the price. From the executor's side, that is exactly the risk. An auction produces whatever the room will pay on the day, and an executor who has not established the value beforehand has no way of knowing whether the result was fair.
Selling Contents at Auction: How It Works
Auction houses range from national salerooms such as Bonhams, Christie's and Sotheby's, through strong regional houses, to weekly general sales. Which is right depends on what is being sold: a signed painting or a piece of important jewellery belongs in a specialist sale where the buyers are; ordinary contents belong in a general sale close to the house, where transport is cheap.
The process is the same at any level. The saleroom's specialist views the items, either at the house or from photographs, and gives an estimate and a suggested reserve. You sign a consignment agreement setting out the fees. Items are collected or delivered, catalogued and photographed, and offered in the next suitable sale, typically four to eight weeks later. Unsold lots are re-offered at a lower reserve or returned. Payment follows three to five weeks after the sale, less the fees.
What Auction Houses Charge
Fees vary by house and by lot value, and should be confirmed in writing before consigning.
| Charge | Typical range | Notes |
|---|---|---|
| Seller's commission | 10% to 25% plus VAT | Lower for high-value lots and large consignments; negotiable |
| Lotting or cataloguing fee | £5 to £30 per lot | Some houses fold this into commission |
| Photography and illustration | £10 to £50 per lot | Often charged only for catalogued sales |
| Insurance while in the saleroom | 1% to 1.5% of hammer price | Sometimes called a loss and damage fee |
| Collection and transport | £50 to several hundred pounds | Depends on distance and volume |
| Unsold fee | Nil to a small charge | Ask; some houses charge if a lot fails to reach its reserve |
| Buyer's premium | 20% to 30% plus VAT | Paid by the buyer, but it depresses what bidders will pay you |
Reserves, Estimates and the Probate Valuation
An estimate is the saleroom's prediction of the hammer price; a reserve is the confidential minimum below which the lot will not be sold. Salerooms like low reserves because they generate bidding. Executors need reserves that protect the estate. The probate valuation, which is an Open Market Value at the date of death prepared by someone with no stake in the sale, is the sensible reference point, and a reserve set well below it should be a conscious decision rather than a default.
A conflict of interest is worth naming. Some auction houses offer free probate valuations on the understanding that they will sell the items. The valuation may be sound, but the house has an interest in the goods coming to its saleroom and in a reserve that makes them sell. An independent valuation costs a fee and removes that interest.
How Sale Prices Affect the Estate's Tax Position
Where the estate is reported on form IHT400, the contents schedule IHT407 asks whether items are to be sold. An arm's-length auction sale during the administration is good evidence of date-of-death value, and HMRC will commonly accept the hammer price in place of an estimate, in either direction. There is no statutory loss on sale relief for chattels, unlike land and quoted shares, so the estimate cannot simply be replaced by a lower result as of right; but where the original figure was an estimate rather than a professional valuation, the sale price is the better evidence and a correction can be made.
For Capital Gains Tax, chattels sold for £6,000 or less are exempt, and the estate's annual exempt amount covers modest gains on the rest. Gains on more valuable items are taxed in the executors' hands at 24%. Keep the saleroom's settlement statements: they show the hammer price, the fees and the net proceeds, which are the figures the estate accounts need.
Selling a Probate Property at Auction
Executors sell houses at auction for three reasons: the property needs work that a mortgage buyer cannot fund, the beneficiaries want a certain sale by a certain date, or the estate wants to avoid a chain collapsing months into a conventional sale. The trade-off is price, which is usually below what a well-presented house achieves on the open market, and the buyer's awareness that the seller is motivated.
A traditional auction exchanges contracts on the fall of the hammer with completion 28 days later; the modern method gives the buyer a reservation period of around 56 days. Either way the executors need the grant of probate before they can complete, so the property should not be entered until the grant is expected within the timescale. Property auctioneers charge the seller around 2% to 2.5% plus VAT, sometimes with an entry fee, and require a legal pack prepared by the estate's solicitor before the sale.
The reserve should be set against a RICS valuation of the property, not against the auctioneer's guide price, which is deliberately set low to attract interest. Where the sale price is materially below the probate value and the sale is within four years of the death, loss on sale relief may be claimed for Inheritance Tax.
Ready to arrange one? Learn more about our contents valuations before an auction sale.
Frequently Asked Questions
01Can executors sell items at auction before probate is granted?
Yes. Chattels have no register of title, so an executor with the will and the death certificate can consign items to a saleroom before the grant. The proceeds belong to the estate and must be accounted for. Property cannot complete until the grant is issued.
02Are probate auctions cheaper for buyers?
Often, which is the point for executors to understand. Salerooms market probate lots as fresh to the market with motivated sellers, and buyers expect value. A reserve set from an independent valuation is the estate's protection.
03Should I get a valuation before selling at auction?
Yes. The valuation gives the estate a figure for the probate forms, a reference point for reserves, and independent evidence if a beneficiary later questions the result. Valuations offered free by the saleroom that will sell the items are not independent.
04How long does it take to get paid after an auction?
Most salerooms pay the seller three to five weeks after the sale, once the buyer has paid. Property auctions complete 28 days after exchange under the traditional method, or around 56 days under the modern method.