How to Sell a Probate Property
When it comes to selling a probate property, it’s a slightly more complicated process than a regular property sale and there will be a number of legal factors to consider. Knowing what you need to do and having an understanding of the process will be hugely beneficial, especially during what can be a difficult time when a loved one has passed.
Compare My Move work with property and legal experts to bring you the most up to date information on buying and selling property. We have created this guide to inform you of the process of selling a probate property, the importance of conveyancing in the process and the costs involved.
What is a Probate Property?
When a person dies, the legal process under which their estate is managed is known as probate. Many estates will include property, which is the topic we will discuss in this article. Be aware that the probate process often involves far more than property.
Only certain people can apply for probate and this will depend on whether the person who died left a will. Probate may not be required if the deceased’s estate is jointly owned by a living spouse or partner who would automatically inherit the property. In this case, a conveyancing solicitor will need to be hired to take care of the legal side of selling or transferring the house to you.
If the deceased owned a property solely in their name, probate will usually be needed before ownership can be transferred or it can be sold. For wives, husbands or partners who wish to sell the property, providing the property was held in joint names it can often be sold without a Grant of Probate. Checking the title deeds at the Land Registry will be able to give you an idea of the types of documentation you require to proceed
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The Process of Selling a Probate Property
There are a few steps you will need to take while the property is under probate, prior to the home selling. These include:
1. Securing the Home
If the home is being left vacant during the probate and selling process, you will need to ensure the home is secure. This includes removing all valuables, locking all doors, locking windows (if possible) and switching off all appliances. You should also make the home insurance provider aware of the situation and check that the policy has not been terminated as a result of the death of the policyholder.
2. Contact Relevant Organisations
In addition to the home insurance provider, you will also need to make the local council aware of the owner's death. Some local councils may offer discounted council tax if the property is unoccupied. Moreover, you will need to contact any relevant utility providers such as gas and electric companies, internet and phone companies and the water provider for the property.
3. Get a Probate Property Valuation
When it comes to getting a probate property valued, it’s a good idea to obtain a valuation from a Chartered Surveyor. A surveyor will have both the knowledge and experience to provide a valuation specifically for the purpose of selling a probate property and for inheritance tax.
Be aware that the property valuation may be subject to examination by the District Valuer Services (DVS) of HMRC to ensure it is accurate. A valuation completed by a RICS registered Chartered Surveyor is more likely to be accepted by HMRC.
4. Pay Inheritance Tax
The estate of the person who died usually pays Inheritance Tax. However, you will need to work out whether this is due which can depend on a number of factors. This can be worked out once the valuation is complete and it is established who will be inheriting from the Estate.
5. Apply for Grant of Probate
According to the UK government website; “Applying for the legal right to deal with someone’s property, money and possessions (their ‘estate’) when they die is called ‘applying for probate’. If the person left a will, you’ll get a ‘grant of probate’. If the person did not leave a will, you’ll get ‘letters of administration’.”
If the deceased left a will, a ‘grant of probate' will be issued to the named executors of the will who can start to deal with the assets owned by the deceased. If there isn’t a will, this is called “intestacy” and ‘letters of administration’ are received by the persons entitled under the laws of intestacy. This can be checked by consulting a solicitor.
6. Instruct an Estate Agent
Although you cannot sell a home whilst it is under probate, you can put the property on the market. You must make sure you have made the estate agent aware of this as it will contribute to the time it takes to sell the house. In addition to putting the property on the market, you are also able to prepare the house for viewings. This includes clearing and cleaning the home, in addition to improving the appearance of the property if required.
7. Instruct a Conveyancer
At this point, you will also need to instruct a conveyancer. This is an essential part of the process of selling any property but with the additional legal aspects of selling a Probate Property, choosing an experienced and reliable conveyancer is vital.
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What Documents Will I Need?
You will need to provide your solicitor with a number of documents to apply for Grant of Probate prior to selling the property. These may be found in the deceased’s files or your solicitor can request them from the relevant organisations. Below we’ve listed the core documents you will need.
- Original will
- Death certificate
- National Insurance number of deceased
- Property deeds
- Mortgage information
- Bank statements
What Costs Should I Be Aware Of?
When it comes to selling a probate property, you are likely to face costs that would not normally apply during the house selling process. This will be in addition to the typical cost of selling a house, which we’ve estimated to be £5,542 to sell a house priced at the UK average of £235,673.
Below we’ve reviewed the additional costs you may incur when selling a probate property and why they are required.
Probate Application Fees
You may have to pay a fee to apply for probate and the cost of these fees will depend on the value of the estate. The application fee for a property over £5,000 is £215. You may be able to get help to pay the probate fee and other court fees if you have a low income or are on certain benefits.
Below we’ve listed the probate application fees you may be required to pay:
Application Fee if the property is over £5,000
Application Fee if the property is under £5,000
Application for a second grant in an estate where a previous grant has been issued.
Extra copies of the probate
*data taken from HM Courts & Tribunal Service, applicable from May 2020
The estate of the person who died usually pays Inheritance Tax. You may need to pay Inheritance Tax if the estate can’t or doesn’t pay it. You normally have to pay at least some of the tax before you’ll get probate. You can claim the tax back from the estate if you pay it out of your own bank account.
Capital Gains Tax
When selling a probate property, you may need to pay Capital Gains Tax on the increased value of the home. This means paying tax on the amount of profit made on the value of the property when it was inherited. You will only need to pay Capital Gains Tax if the gains above your tax-free allowance. The current CGT tax-free allowance is £12,000.
As mentioned above, you will need to hire a conveyance as part of the selling process and will therefore need to account for conveyancing fees. Some solicitors offer a fixed fee conveyancing service, whilst others will charge an hourly rate.
Your conveyancing costs will depend on the location of the home, the property price, the conveyancer or solicitor you opt for and the complexity of service. According to our data, the current UK average for selling a house is £1,000.
Vacant Property Insurance
You may need to pay for Vacant Property Insurance if the property is left empty for more than 30 days during the probate and selling processes. An empty property is more at risk of theft and carries a higher risk of structural damage. This type of insurance will cover you if your property is unoccupied for longer than your standard insurance policy will allow. Be sure to secure the property for the time it is unoccupied and ensure no valuables are left on the premises.
House Clearance and Cleaning Services
This is something you could do yourself to save money, however, you may want to consider hiring someone to clear the property of unwanted furniture and possessions prior to putting the property up for sale. Some removal companies will offer this as a service, or you could hire a specialist company who can clear and clean the property ready for selling.
Below we've answered a few of the questions which may arise when selling a probate property in the UK:
How Long Does a Probate Sale Take?
On average, it can take 2-6 months to sell a house in the UK. However, a probate sale will take longer than a typical property sale as you will have to complete the probate process before selling. On average it takes 3 to 6 months for the Grant of Probate to be issued but can take longer if there are complications. As mentioned above, if you market the property whilst it is under probate, you should make any prospective buyers aware that this is the case.
Be aware that there may be further delays due to the impact of the coronavirus pandemic and the subsequent national lockdowns. Furthermore, issues with a new online system for solicitors applying for probate on behalf of clients has also contributed to a backlog of probate applications.
Can You Sell a House Under Probate?
When a home is under probate you cannot legally sell it. You can, however, put the property up for sale and market it. You will also be able to conduct viewings and agree a sale price with a prospective buyer.
A potential buyer can also apply for a mortgage in principle and arrange a survey on the property But whilst the property remains under probate, contracts cannot be exchanged and the sale cannot be completed until probate is granted. If you do intend to put the house for sale and market it before probate is granted, you will need to make prospective buyers and the estate agent aware of this. Be prepared that this may put off some potential buyers, especially those in a property chain, as there is potential for a delay on the sale.
Can You Sell a House Before Probate?
As above, you cannot complete the sale until probate has been granted but you are able to put the property up for sale. Again, you will need to make potential buyers aware of this.