When you sell a house you have inherited, you may feel more emotional than with a standard property sale. Not only are you likely to be mourning the death of someone close to you, but the house itself may have been your family home, one that you grew up in and in which you have several happy memories. But, sadly, the reality is that this is not the time for sentiment, and there are lots of practical considerations that need to be addressed.
There is legal paperwork to draw up, financial matters to look into, and research into the best method for selling the property. Although it is possible, it is challenging to do this alone and finding a suitable solicitor who can manage the entire process for you is often the most sensible option. This objective viewpoint also helps you deal with your head rather than your heart.
Navigating through probate
Firstly, you will need to discover a will that determines who has been left the property. This makes things easier and quicker than if the assets are intestate. You will then require a deed called a grant of representation to make the necessary arrangements.
Dealing with probate, and all it entails, is likely to be something you only do once in your life, so it is beneficial to use the legal services of someone who knows all about it and can provide expert advice and guidance.
Andrew Wisniewski from Andrew & Andrew Solicitors said: “From the outset, we will establish whether a grant is required, then ascertain the deceased’s assets by collating important information. We will then draft the relevant legal documents required to obtain the grant, settle any debts and liabilities and deal with tax implications. Finally, we will distribute the estate following the deceased’s will, or the intestacy rules, should the deceased have died without a valid will.”
Inherited property taxes
You won’t be able to sell the house until probate has been granted, but you will need to have it valued when applying for probate so that the value of all assets can be taken into account when calculating inheritance tax.
Inheritance tax is paid at 40% of anything above £325,000. This threshold is increased to £475,000 if the beneficiary is a child or grandchild.
If you decide to sell the property later, and it isn’t your main home, such as choosing to rent it out for a period, you will be liable for capital gains tax on any eventual profit. Again, this is paid at 40%. If you rent it out or use it to receive any income, you will also need to pay income tax under an annual HMRC self-assessment.
What other costs are involved?
If you have inherited a property with a mortgage or secured loan attached to it, you will need to speak to the lender about taking over the mortgage payments yourself. They may ask you to take out a new mortgage of your own. Alternatively, there may be the option to clear the debt with an endowment, life insurance or mortgage protection policy if any of these were in place at the time of death. Some lenders may be happy for you to wait until you receive the estate’s proceeds if that means you can clear the debt. Others may insist on you paying the full redemption of the mortgage immediately. However, this is rare as people tend to be sensitive to the position you are finding yourself in and will do what they can to find the best solution for everyone concerned.
You might also decide that you need to renovate or redecorate parts of the property before selling it. You will need to consider the various costs of selling property, such as estate agents’ fees and conveyancing. There may also be costs for storage or arranging for a house clearance if you are left the contents and the house itself.
Selling options
Depending on how quickly you want to sell the house, what state it is in, and how much money you hope to receive for it, there are a few different options and methods you could employ.
The most obvious is to go through the traditional estate agent route, market it and put it up for sale using a high street company that will utilise websites such as Rightmove and Zoopla. This is likely to take the longest time but could ultimately make you the most money, and you will be in control of what offer you accept.
Property auction houses allow you to sell your home quickly and are a good option if you don’t plan to do any work and want to sell it as seen. Developers are most likely to attend these auctions and wish to secure the property at a knockdown price. Ultimately, you may receive less than the property’s worth, but the process is fast, and they are often cash buyers.
Lastly, selling to a quick home buyer, which can often take just a week to complete, is ideal if you need the cash fast – perhaps to pay off debts. There may also be the option to get a cash advance, and the sale is 100% guaranteed on signing the contract, so you don’t need to worry about buyers dropping out.
Selling to a quick home buyer could save you estate-agent or legal fees or associated property costs such as council tax and insurance. However, the lump sum you receive is likely to be considerably lower than if you were to take it to the open market.
Final thoughts
Selling a house is a stressful process, exacerbated further when it is a house of someone you love who is no longer with us. Don’t rush into anything and be too hasty with your decisions. Do some research, work out what is best for you and your circumstances, and take expert advice. You are not alone.
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