How Do You Sell an Inherited House?
We understand that inheriting a property can come with some mixed feelings and plenty of questions. You’re dealing with a major loss when someone has passed away and learn it’s also necessary to deal with the complexities of a property at the same time. But we’re here to reassure you that, yes, you can sell an inherited property fast, without stress and hassles.
What Happens When You Inherit a Property?
You may find that the property was left to you during the reading of a will. If a will is in force, you can learn who has inherited the property and who the executor of the estate is. The executor is the person who is responsible for ensuring the wishes of the deceased are carried out.
What Happens If There Is No Will?
In that case, don’t panic. You can apply for something called a “grant of letters of administration.” This is a document that’s issued by the probate registry. It gives you the power to act as the executor of an estate following a person’s death.
The grant of letters administration gives you access to the deceased’s bank account, so you can pay for the funeral expenses and sell off assets. However, it’s important to remember you are also liable to cover any debt the person may have at the time of death.
Grant of Probate Explained
In order to take ownership of inherited property, the executor will need to apply for a Grant of Probate, which can be obtained from the Probate Registry. The process usually takes about eight weeks. During this time, you won’t be able to legally make any financial decisions until the probate is resolved.
Once you’ve been granted probate, you can pay off the deceased’s debts, close their accounts, divide the estate, and sell the property. When the debts have been cleared and taxes paid, then the probate ends.
What is Probate Required?
In cases where someone has passed away, probate may be required in about 50% of cases. However, you may be able to get away without probate in the following instances:
- No property is involved, and the person only had savings
- No property is involved, and they only have assets worth £5,000 or less
- The property or land is jointly owned, so it passes to the surviving owners
What Taxes Do You Need to Pay?
If you’ve acquired property or land, you will probably have to deal with one or more taxes, including:
This tax is applicable if the total value of the deceased’s estate is more than £325,000. Included in the total is property, savings, shares, and any other inherited assets.
However, some family members are exempt from this or enjoy higher thresholds, including:
- Spouses, civil partners, and charities are exempt from paying inheritance tax on the estates they inherit
- Children (including adopted, foster, or step-children) and grandchildren only pay when the estate is over £500,000.
Inheritance taxes are currently 40% and are only charged on the part of your estate that’s above the threshold.
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Capital Gains Tax
You’ll only need to pay the capital gains tax if the value of the property or land has increased since you inherited the property.
However, you may be exempt from this tax if you are the spouse or civil partner of the deceased. In addition, if you’ve already paid inheritance tax, you only need to pay the tax at the point of sale, though you may also be able to waive this.
If you’ve inherited a buy to let or holiday home, you will have to pay income tax on any money received from these assets.
We strongly suggest discussing all the tax issues with a tax advisor. We are not professional tax advisors and only present this information for educational purposes.
Deciding If You Want to Sell
When you inherit a property, you have three choices to consider:
- Sell the property
- Rent the house out to tenants
- Move into the property
Let’s review each of these choices in the following sections.
Selling an Inherited Property
Selling the property could be the easiest option; however, it does take a lot of work. Selling a property the traditional way can take between 5-7 months, and this does not include the time needed to prepare the property for viewings. To obtain the best price, it’s also necessary to clear out any items you don’t want and do some renovations.
Tip: While traditional selling methods can take months, there are ways to sell the inherited property fast—we’ll share more on this later in the article.
Renting The House Out
You may decide to become an “accidental landlord,” which means you end up with more than one home, and now you want to rent one of them out. Before you search for tenants, it’s important to alert the mortgage provider (if applicable) about the change in circumstance. You’ll also need to learn about the taxes involved and landlord obligations and obtain the required insurance policies.
Move into Your Inherited Property
It’s also possible to move into the inherited property yourself, but you’ll need to ensure there isn’t an existing mortgage. If there is, you’ll need to contact the lender and get the mortgage put into your name.
You can choose to use the same lender or a different one that may offer a better deal. However, you will be subject to credit checks.
How Can I Sell an Inherited Property Quickly?
Selling the inherited property can be challenging; however, selling a property can be fast and easy. It’s possible to sell the property within 7 days. You can do this by selling the property to a cash home buyer.
A cash home buyer is a company that buys properties for cash. They often buy properties in any condition and offer you cash for the sale. Selling to a cash buyer may mean a discount on the current market rate; however, you can sell the property quickly and easily, only paying conveyancer fees.
Summing It Up
Losing a loved one is never easy, and having to deal with an inherited property at the same time can be overwhelming. However, it’s necessary to consider your options with the property and what you’d like to do with it.
If you need to sell the property fast, a cash buy is usually the easiest and faster way to get this done. You can sell the house within 7 days and have the cash in your bank account the same day the sale is complete. Selling with a cash buy is easier, and you won’t have to deal with the hassles of a traditional real estate sale.
Frequently Asked Questions
Now, let’s address some common questions about selling an inherited house:
Can I sell an inherited house before probate is complete?
Yes, you can sell an inherited house before probate is complete, but it may involve legal complexities. Consult an attorney for guidance.
What are the tax implications of selling an inherited house?
The tax implications vary depending on your location and the property’s value. It’s advisable to consult a tax professional to understand your specific situation.
Should I make repairs before selling an inherited house?
It’s often wise to make necessary repairs or renovations to maximsze the property’s value. Your real estate agent can provide guidance on which improvements are most beneficial.
How do I choose the right real estate agent?
Research and interview multiple agents, considering their experience, local knowledge, and marketing strategies. Choose an agent with a strong track record in selling inherited properties.
What should I include in the property listing?
Your listing should include details about the property, high-quality photos, pricing, and any unique features or selling points.
How can I expedite the closing process?
Ensure you have all necessary paperwork in order and cooperate closely with your real estate agent and solicitor.