Inheriting property often brings mixed emotions — sadness over losing a loved one, excitement about a new beginning and, very often, confusion (“what exactly is probate, and why is the taxman getting all my money?”).
In this beginner’s guide, we’ll take you through the basics of selling an inherited property in the UK.
What Is Probate Property?
When someone dies, the assets (money and property) they leave behind are referred to as their “estate”. “Probate” is the legal process that governs the administration of the deceased person’s estate. Any property the deceased owned becomes a “probate property” and part of their estate.
What to Do If You Inherit a Property
Selling a probate property is not as straightforward as selling a “regular” house. Before you can sell the property, you will need to establish your rights of ownership. Keep things running smoothly by following this checklist:
Confirm Your Status as the New Owner
Before you can sell probate property, the will must be located to establish your rights to the house. The will should name an executor (the person who makes sure that the wishes of the deceased are carried out and manages their estate) and any beneficiaries (those set to inherit).
If a person dies without a will they have died “intestate”. This makes the process of identifying beneficiaries more complex, but it can be done via the rules of intestacy.
Keep the Property Secure
If you’ve inherited a property that is now sitting empty and you intend to sell it, remove any valuables, make sure the doors and windows are locked, set burglar alarms (if there are any) and switch the power off to reduce the risk of fires or other accidents.
Vacant buildings can attract the wrong kind of attention, so installing a few basic CCTV cameras and giving the neighbours your contact details is a good idea.
Contact the Insurance Company
The death of the property owner could terminate any insurance on the home, such as the building and contents policy. Contact the lender, inform them of the owner’s death — if they don’t already know — and discuss what this means for insurance purposes. Some will continue the policy until it expires, but others will only allow it to run for 30-days after the policy holder’s death.
Without insurance, you will not be covered for any structural damage or theft that occurs to the property during your period of ownership. If you are unable to rectify such issues, they are likely to impact your ability to sell and the price you can achieve.
The executor of the estate (as named in the will) can request for the policy to be extended to cover the probate process. When you sell the property, responsibility for taking out a new insurance policy will fall to the new owners, as it would in any house sale.
Apply for a Grant of Probate
You must apply to the Probate Registry for a grant of probate. If the deceased left a will, you will receive a “grant of probate”. If there is no will, you will get “letters of administration”. It can take six to eight weeks for these documents to arrive. The entire probate process can take more than six months to complete, but you can start preparing the property for viewings as soon as you receive the grant of probate or the letters of administration.
How to Sell a Probate Property
Once the property is officially in your name, you can begin the sales process. To increase your chance of securing a sale and achieving the asking price, there are a few steps you can take:
- Carry out repairs and home improvements — you may not have the budget for major renovation work but completing minor repairs such as dripping taps and broken windows will make the property more appealing to buyers. Once you have the grant of probate (or letters of administration), you can begin working on your inherited property to add curb appeal.
- Set a realistic asking price — setting an asking price that is too high is the most common reason for a house not selling. Properties that have an unrealistic asking price and are subsequently reduced take months longer to sell than those that are priced accurately from the start.
- Find a good estate agent — there are hundreds of estate agents to choose from, and they come in all shapes and sizes, from high street agents to online agents and even hybrid agents (a combination of online and face-to-face services). The difference between a proactive agent and a poor one could mean the difference between a quick sale for a great price and a sale that takes months and falls well below expectations.
Probate property is attractive to many buyers because it is a vacant property (one they can move into right away once the sales process is complete) with no chain. However, many people find the prospect of strangers traipsing through their deceased loved one’s home upsetting, and the prospect of a long wait to find a buyer, sell up and move on can be too much emotionally. For this reason, many people selling an inherited property opt for a quick house sale with a cash house buyer. A quick-sale company has the finances to buy your property in as little as seven days after valuation, regardless of its condition or location. You won’t have to pay any estate agents’, solicitors’ or surveyors’ fees.
Additional Expenses When Selling an Inherited Property
When calculating the expenses associated with selling a probate property, don’t forget to factor in inheritance tax. If the property is worth more than £325,000, inheritance tax must be paid. The exact amount depends on a number of factors such as whether the deceased was married at the time they died and your relationship with the deceased.
You may also have to pay capital gains tax on any profits you make from selling the house.
Selling an inherited property can be an emotional rollercoaster. The red tape involved makes it a daunting task at a difficult time. To reduce stress and delays, follow the practical steps above, gain professional advice from a qualified legal professional and take advantage of any services or support that will make the process move more smoothly and quickly.