Selling a house when someone dies is always a difficult thing to go through. On top of the emotionally stressful nature of losing a loved one, there are lots of practical things to take care of.
21st June, 2022
Selling a house when someone dies is always a difficult thing to go through. On top of the emotionally stressful nature of losing a loved one, there are lots of practical things, like selling a relative’s home, to take care of.
We’ve written this guide to help you navigate the sale of a house when someone dies. There are several things that you should be aware of, such as how to apply for a grant of probate. This article will take you through everything that you need to know to make the sale as easy as possible. We’ll answer some of the most common questions about selling an inherited property, then we’ll walk you through the sale process.
If you’re looking for the answer to a burning question, such as what is an executor, or how much probate costs, use the menu below to find what you’re looking for quickly. Otherwise, read the entire guide for a complete overview of how to sell a house when someone dies.
This is often the first question that comes to people’s minds when someone close to them dies. When someone dies they will usually write a will detailing what they want to happen to their possessions. The people to whom they leave their assets and belongings are known as beneficiaries. Whether or not the house needs to be sold will depend on the wishes of the beneficiaries. If the beneficiaries want the property to be transferred into their name then it won’t need to be sold. However, if they don’t wish for the property to be transferred to them then the property will need to be sold.
What is an executor?
The executor (or executrix) is named by the deceased to deal with their assets, money, and belongings (also known as their estate). The executor is legally responsible for carrying out the instructions left by the deceased in their will. It is possible to appoint more than one executor. It’s a good idea to select at least two executors, just in case one dies or opts out of their role. It is possible to have up to four executors, although there’s a risk that having too many could cause confusion or conflict.
Responsibilities of the executor
Beyond carrying out the wishes of the deceased, the executor has several other legal responsibilities. These are:
Paying outstanding bills owed by the estate.
Applying for a grant of probate.
Calculating inheritance tax (and other taxes) and making sure they are all paid.
Valuation and distribution of the estate.
Appearing in court (if required).
The executor(s) may also be responsible for dealing with other formalities around the death. Such as registering the death, arranging the funeral, and letting friends/family know that the death has occurred.
What is probate?
Probate covers the administration of the deceased’s estate. This includes valuing and distributing the estate and paying any owed bills or taxes. Before the executor has authority to begin this process they need a Grant of Probate. A Grant of Probate is a legal document that gives the executor authority to administer the deceased’s estate.
Grant of Probate
To apply for a Grant of Probate the executor must gather complete details of the estate’s assets and liabilities. Once this information is ready you can apply for probate online or by post. The executor will have to fill out one of two forms depending on whether or not a will exists. If there is a will then the PA1P form will need to be completed. If there is no will then the executor will have to complete a PA1A form.
How long does it take to get Probate?
It depends on the complexity and size of the estate. On average, the probate process takes around a year from the date of death to the distribution of the estate. The most time-consuming part of the process is receiving the Grant of Probate. The distribution of assets can be completed in as little as 4 weeks.
How much does probate cost?
The cost of probate depends on the value of the estate. If the estate value exceeds £5,000 then the application fee for probate is £273. If the value of the estate is less than £5,000 then there is no fee. There are also fees for additional copies of the probate document (£1.50). If you wish to make a second application for probate then the £273 fee is payable regardless of the value of the estate.
You can get help with probate fees if you have a low income or claim certain benefits. You can apply for help with probate fees online or you can fill out an EX160 form.
Can you sell a house before probate?
You can market a property before probate is granted. You can also accept an offer and begin the conveyancing process. However, you can’t modify the title until a Grant of Probate has been issued by the courts. This means that it’s not possible to exchange contracts on the property or complete a sale until after probate has been granted. Sometimes this causes difficulties and delays with the sale of inherited property. It’s important to be up-front and transparent with both estate agents and prospective buyers about the status of the probate application.
The main taxes that you need to be aware of when you inherit property are Stamp Duty, Capital Gains Tax (CGT), and Inheritance Tax. Whether or not you will pay each of these depends on the ownership structure of the property, its value, and the value of the deceased’s estate. We’ll give a brief overview of each here, but for more information check out our detailed guide on the tax on inherited property.
Stamp duty on inherited property
You don’t need to pay Stamp Duty Land Tax (SDLT) on inherited property. However, it can have implications on the amount of Stamp Duty you pay on future house purchases. It can also impact the amount of tax allowance to which you are entitled. For example, if you inherit a property you will no longer be classed as a ‘first-time buyer’, and therefore won’t qualify for the entitled relief in stamp duty. Furthermore, any property you purchase whilst owning an inherited property will be subject to the higher rate of Stamp Duty as it will be classed as a second home or investment property.
Capital Gains on inherited property
This depends on whether or not the property is your main residence and if it has increased in value. If the property you have inherited is not your main residence and its value has increased since it was inherited, then you will be liable to pay Capital Gains Tax (CGT). CGT will only be due on the increase in value. If you’re selling a house when someone dies, the likelihood is that it won’t have increased in value too much from the time of death to the moment that you start marketing the property. So it’s unlikely that you’ll have to pay Capital Gains Tax. However, if you hold the property for some time and it does increase in value then you should be aware of CGT and check how much you owe. It’s also important to inform HMRC of which property is your main residence since this has a bearing on whether or not you will pay CGT.
Inheritance tax on inherited property
If the value of the deceased’s estate exceeds £325,000 then you will usually have to pay 40% inheritance tax on everything over that amount. However, there are several exceptions and ways to reduce the amount of inheritance tax you will pay if you’re selling a property when someone dies. For example, there are tax relief benefits when the main residence is passed on to a direct descendant. This is known as the ‘main residence nil rate band’. It’s also possible for spouses to pass unused inheritance tax allowances on and thereby confer two sets of allowance to the descendant or beneficiary.
Selling a house when someone dies – the process
Now that we’ve covered some of the most common questions about selling a house after someone dies, we’ll run through the process. This differs from the typical process of how to sell a house, so it’s important to be aware of the differences.
1. Apply for Probate
The first step towards selling a house after someone dies is applying for a Grant of Probate. This should be done by the executor and gives them the legal right to sell the house and deal with the proceeds. Remember, it can take over 6 months for probate to be granted. So it’s important to be realistic about timescales and accept that until probate is granted it may be difficult to sell the house fast.
2. Get the property valued
The property can be valued immediately, and doesn’t need to wait until probate is granted. The best way to get a valuation is to approach a local agent or an auction house (depending on the condition of the property). If you’re using an agent we recommend getting several agents (at least 3) to value the property and landing on a realistic figure for the property. Agents will value the property for free and can usually complete the process pretty quickly. You can also obtain an online valuation of your property from SmoothSale.
3. Instruct a solicitor
You should obtain the title deeds for the deceased’s property that is being sold. The title deeds are a legal record of ownership of a property. These can usually be obtained digitally from the Land Registry for a small fee.
The next step is instructing a solicitor to conduct a title check on the property and establish whether or not there are any issues or restrictions on the title. This can uncover issues such as outstanding charges or claims to the title that need resolving, so it’s a good idea to get this done as soon as possible. Assuming there are no issues with the title, you can start to prepare the property for marketing and sale.
4. Get the house ready for sale
Preparing the property for sale can be as simple as clearing out any excess clutter and personal items. In some cases, particularly if it’s easy to do, you may want to add value to the property.
There are obviously a number of ways to do this, ranging from simple touches to improve curb appeal to replacing kitchens & bathrooms, and even extending the property. For some of the best ways to increase property value check out our guide on some of the top tips for adding value to your property.
5. Market the property
Once the house is ready to go on the market, you’ll need to decide which route is best to sell the property. There are several options for selling your house. The route you should choose depends on the condition of the property, the speed of sale that you require, and how much time you have on your hands. The main ways to sell your house are through an estate agent, at auction, via part-exchange, to a cash house buyer, or to an investor. It’s also possible to sell your house privately if you have a friend or family member who wants to buy it.
6. Obtain home insurance
The executor has a legal obligation to make sure that the property is insured. Insurers will typically charge higher premiums on houses that are unoccupied. This is because unoccupied houses are at greater risk of things like house fires, flooding and burglary. So if the property is already insured then the insurer should be made aware that it is no longer occupied.
7. Costs of selling an inherited house
The costs of selling an inherited property shouldn’t differ significantly from a regular house sale. You can find a more detailed breakdown of these costs in our complete guide about how much it costs to sell your house. It’s possible that you may face higher costs for things like clearance if the house is cluttered, and home insurance due to the property being empty.
Conclusion – Selling a house after a death
In this article, we’ve answered some of the most common questions that crop up about selling a house after someone dies. We’ve covered details about probate and its cost and purpose. We’ve clarified the difference between an executor and a beneficiary. We’ve talked about the taxes that you may be responsible for when selling an inherited property. Finally, we’ve covered the entire process of selling a house when someone dies.
The process of dealing with probate and then distributing an estate can be an incredibly stressful time. Making sure you’re aware of the process of how to sell a property after a death can help to alleviate some of that stress and confusion. If you require any more advice than we’ve offered in this article then we’re always happy to help. Just give us a call on 0800 368 8952.
Frequently Asked Questions (FAQs)
Can I sell the house immediately after the person’s passing?
There might be legal processes that need to be completed before selling. Consult with an attorney to understand the requirements in your area.
How long does the probate process usually take?
The duration of probate varies depending on your location and the complexity of the estate. It can range from a few months to over a year.
Is it better to use a real estate agent or sell independently?
Both options have their merits. A real estate agent brings expertise and can handle many aspects, but selling independently provides more control.
What if the house has outstanding mortgage payments?
Mortgage payments and other debts must be settled from the estate before distributing the proceeds of the sale.
Can I make changes to the house before selling?
Minor repairs and cosmetic changes can enhance the property’s appeal. However, major renovations might not be necessary or financially viable.
How do I determine the right asking price?
Getting a professional appraisal and researching comparable properties in the area can help you set a reasonable asking price.