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When someone dies while a property transaction is in progress, the legal outcome depends critically on whether contracts had been exchanged. Pre-exchange: no binding obligation exists. Post-exchange: the estate inherits the contractual obligation and must either complete or face the legal and financial consequences of breach.
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Until contracts are exchanged, neither buyer nor seller is legally committed to the transaction. Both parties can withdraw at any time without penalty (subject to having paid any survey or legal fees already incurred).
If the buyer or seller dies before exchange, the transaction does not bind their estate. The executor has full discretion to:
In practice, if the deceased was buying a property, the executor would rarely wish to proceed — the house purchase was personal to the deceased. If the deceased was selling a property that forms part of the estate, the executor might well continue with that sale (or re-market at a better price).
Any deposit paid by the buyer before exchange (such as a reservation fee) may be refundable — check the terms of the reservation agreement. Pre-exchange search and survey fees are typically not recoverable.
Exchange of contracts creates a legally binding obligation on both parties. If death occurs after exchange, the estate steps into the deceased's position and is bound by the contract. This applies whether the deceased was the buyer or the seller.
The executor takes over responsibility for completing the transaction and has the same contractual obligations as the deceased. The other party cannot simply walk away, and nor can the estate — without the other party's consent.
The estate must complete the purchase unless both parties agree to rescind the contract. Rescission requires the seller's agreement and may involve the estate forfeiting the deposit (typically 10% of the purchase price) — which can be a significant sum.
If the estate does complete, the property is purchased and becomes part of the estate assets. This may or may not be commercially sensible — an executor who completes should ensure the asset value justifies the cost of completion and any ongoing holding costs (council tax, insurance, maintenance).
A major practical issue is the mortgage offer. Most mortgage lenders will withdraw their offer on the death of the borrower. Without mortgage finance, the estate may be unable to fund completion — yet is still contractually bound. The executor should contact the deceased's solicitor immediately to understand the options.
The estate must transfer the property to the buyer and receive the proceeds. The executor has authority to sign the transfer deed (TR1 form) on behalf of the estate. The buyer cannot be forced to wait indefinitely for probate — the contract has a completion date.
In practice, the buyer's solicitor will need to see the grant of probate before completing. This may require a short extension of the completion date by mutual agreement. Standard conveyancing contracts provide for a notice to complete procedure — if the estate is in default, the buyer can serve notice and eventually rescind and claim damages.
Executors should prioritise obtaining the grant of probate quickly if a post-exchange sale is pending. See our guide on applying for probate for the process and timeline.
If the deceased was buying jointly with a surviving co-buyer, the outcome depends on the tenancy type:
Similarly, if the deceased was selling jointly, the surviving co-seller can complete the sale. Evidence of death (death certificate) and potentially the grant of probate may be required by the buyer's solicitor.
As noted, most mortgage offers lapse on the death of the named borrower. This creates a funding gap if the estate is contractually bound to complete. Options for the executor include:
Most practical resolutions involve negotiation between the solicitors. Sellers often prefer to cooperate rather than deal with the cost and delay of re-marketing if the estate falls through on completion.
Once probate is granted, the executor has full authority to sell any property in the estate. This is a straightforward conveyancing matter — the executor signs the transfer deed as the legal owner on behalf of the estate. See our guide to selling a probate property for the full process.
Properties that were part of an interrupted purchase mid-conveyancing may have planning and mortgage complications — get specialist conveyancing advice before proceeding.
For inheritance tax purposes, the deceased's interest in the property — whether as buyer or seller — needs to be valued at the date of death. If contracts had been exchanged, the HMRC position is generally that the deceased had a beneficial interest in the property at the agreed contract price. This value is reported on the IHT return.
For IHT guidance, see our inheritance tax UK 2026–27 guide. For the broader probate process, consult our complete UK probate guide 2026 and the estate administration checklist.
For general guidance on the first steps after someone dies, see our what to do when someone dies guide and the executor first steps guide. For leasehold property issues during probate, see our leasehold property probate guide. For delays from lenders during a probate sale, see our lender delays on probate sales guide. For equity release complications, see our equity release and probate guide. For the broader probate process, see our estate administration checklist. Farra can help you navigate estate administration — get started here.
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