Selling a Probate Property

When you need to sell a home after someone has died, you will find that the process is a bit more complicated than selling a home in the normal way. This is because the house may be part of the deceased person’s estate, which must go through probate before it can be sold.

What is probate property?

Probate property refers to the property and assets owned by a person who has passed away. These are the assets that need to go through the probate process so they can be distributed according to the person’s will or, if there is no will, according to the rules of intestacy. A Grant of Representation will be required to sell/close/transfer such assets.

Common examples of probate property include real estate, bank accounts held in just the deceased’s name, cars, personal belongings, and other investments. It’s important to know that a home that is jointly owned in a joint tenancy arrangement is not considered probate property and instead passes directly to the surviving owner. However, property that is jointly owned as tenants in common will partly belong to the deceased person’s estate and a Grant of Representation will still be required to deal with the deceased’s share.

What is probate?

Probate is the legal process of proving that someone’s will is valid and giving the executor the authority to manage the estate. This process includes applying for a Grant of Probate, which is an official document issued by the Probate Registry.

If there is no will, the probate process will involve appointing an administrator to handle the estate and distribute assets according to the law. The administrator will be the person(s) entitled to benefit form the estate under the rules of intestacy, but in some circumstances a professional independent administrator is appointed to take on the role. The administrator will receive a Grant of Letters of Administration instead of a Grant of Probate. This document proves their legal right to sell the home and deal with any other assets.

Can you sell a house during probate?

You cannot sell a property while it is still going through probate.

However, there are steps you can take in the meantime to prepare for the sale. For example, you can put the property on the market, conduct viewings, agree on a selling price, and allow the buyer to start making arrangements, like applying for a mortgage or getting a survey done.

But you cannot exchange or complete a sale until probate is granted.

If you choose to put the property up for sale before probate is granted, you must tell your estate agent and potential buyers that you are still waiting for probate. Some buyers might be willing to wait to complete the sale, but others may not, especially if they need to move quickly or are part of a property chain.

What is the process of selling a probate property?

1. Value the property

Before probate can be granted, you will need to report the value of the deceased’s estate to HMRC. This includes the full market value of the property, other assets such as bank accounts, and debts owed by the deceased, such as an outstanding mortgage.

2. Pay inheritance tax

If Inheritance Tax (IHT) is due on the estate, you will have to pay this within six months of the end of the month in which the person died. IHT which is due over a property can be paid in 10 yearly instalments if there is insufficient cash in the estate with which to pay the tax. The executor could pay IHT out of their own pocket, which can be repaid once the property is sold.

There are complex rules surrounding IHT. You can read about them in more detail in this article about Inheritance Tax Returns.

3. Obtain grant of probate / letter of administration

Once the estate has been valued and any IHT paid, the application to the Probate Registry can be made. The person named as executor in the will, or the administrator if there is no will, must apply for probate. This involves submitting a probate application form and paying a fee to the Probate Registry. Executors and administrators can apply for probate themselves or instruct a probate lawyer to do it on their behalf.

The Probate Registry will issue a Grant of Probate or Letters of Administration. This document allows the executor or administrator to start dealing with the estate, including selling the property.

4. Prepare the property for sale

This might involve decluttering, decorating and making repairs to the property. You will need to find an estate agent if you are selling the conventional way, arrange for an Energy Performance Certificate if there isn’t one already, and instruct a conveyancing solicitor to start preparing the legal pack. This can all be done before the Grant is issued although, as previously mentioned, you cannot exchange or complete the sale until probate is granted.

5. 5. Proceed with the standard conveyancing process

Once probate has been granted and an offer has been accepted, the sale of the property can proceed through the standard conveyancing process. This includes handling legal documentation, exchange of contracts, and finally completing the sale.

6. Distribute proceeds of sale

After the property has been sold, the executor or administrator can finish their estate administration and distribute remaining assets according to the will or intestacy rules. This could involve paying off debts, fulfilling specific bequests, and sharing the remaining sale proceeds among beneficiaries.

Methods of selling a probate property

You can sell your probate property through an estate agent, just like any other property. You must tell the agent that it’s a probate property so they can notify potential buyers about possible delays in completing the sale.

Another option is to sell the property at auction, which often results in a faster sale. Keep in mind that auctions usually require the sale to be completed within 28 days of the hammer falling. So, you must hold the Grant before you can sell at auction.

A third option is to sell the probate property directly to a buyer, with no middle man. This could be a private buyer or a company that specialises in buying probate properties for cash.

For all of these methods, it’s important to get a professional valuation first. Executors have a duty to sell the property at a fair market value. A valuation is proof that you fulfilled this duty and can help avoid disputes with beneficiaries.

What are the challenges of selling a probate property?

Selling a probate property involves a number of potential problems:

• Bureaucracy and delays: Selling a probate property involves two legal processes back-to-back: obtaining probate (which can take several weeks or months) and then the conveyancing process (which can also take several months as with a normal house sale). You should prepare for a minimum of 9 months to sell a probate property, with the most complex estates sometimes taking several years.
• Tax and financial issues: You might have to cover probate fees, inheritance taxes (if payable), maintenance costs, and other expenses upfront before you can proceed with the probate sale. These costs can be reimbursed from the estate later once probate is granted.
• Condition of property: Probate properties are often outdated or in need of repairs, which can impact their sale price and may require the executor to complete some work before selling.
• Disagreements among beneficiaries: Beneficiaries may have conflicting interests or disagree with the executor about selling the property. You will need to resolve these disputes before you can sell the property, usually with support from a contentious probate solicitor.

Despite these challenges, selling a probate property can be efficient and relatively hassle-free if you have a good understanding of your responsibilities as an executor and seek professional advice.

Contact us about selling a probate property

Administering an estate is rarely fast, and is often complex. It’s recommended that you start the process early, and work with a specialist probate solicitor to ensure that you understand the legal requirements and get all the necessary paperwork completed as efficiently as possible.

Our probate team works closely with our conveyancing team, supporting you end-to-end through the probate sale. To speak with one of our solicitors, contact us by:

• Filling in our online enquiry form; or
• Calling us on 020 7485 8811