Selling Inherited Property – Kate Faulkner

It is tough when you’ve lost a loved one and then have to work out what to do with the home they leave behind.  Should you sell the property? Buy it yourself? Rent it out for a while or the long term?

To help, the first thing to do is not to rush into a decision. Give yourself a few weeks to adjust to the situation before you do anything – take some time to grieve if you need. The next step is to sort out everything left in the home. Ideally don’t strip the place bare as it’s easier to sell a property with some furniture in and it’s safer too. Depending on how long you are likely to leave the property empty for, make sure you follow our Empty Homes tips.

Are you Inheriting the Property with others?
The next step is to start to work out what your options are. Of course the property you are inheriting may be shared between other family members. If there is a surviving spouse, for example, you may all decide it’s easier if they stay in the home from a familiarity perspective. Alternatively you might decide that it’s better the parent sells up and moves closer to you.

Top Tip: Draw up your will!
Don’t forget that ideally before you officially inherit the property, it’s important to have your own will drawn up (and potentially put the property in a trust if you have children of your own) to ensure that if anything happens to you, your wishes are carried out.

Next, it’s important to chat to other family members that have inherited the property with you and try and gain a consensus of what to do.

Options on What to do when you have Inherited Property

Option One: A Family Member Buys the Property
Sometimes it’s as easy to buy the property yourself if it’s the size you want and in the location that you want to live in. This can be straightforward if you are a lone child and require some tricky negotiations if you have brothers and sisters!

Ideally you need to get an agreement drawn up between you which includes how the property will be valued and how other siblings will be compensated (if required) for their share of the property. Your legal company should be able to guide you through this process at the same time they are carrying out probate. 

Option Two: You Decide to Sell the Property
If you aren’t the only sibling selling the property may well be the best option, especially if there is any disagreement on who should own the property or how to move forward. This way everyone can take their share and do what they want with it.

The important thing to do is to decide who’s going to manage the sale of the property and agree the minimum that you will all accept. If it helps, even get this in writing between you so no-one can change their mind latter on. If necessary, your legal company will look after the sale, but they will charge you for it.

If for any reason you need a ‘quick sale’ then you can turn to private buying companies such as:-

ARC Property Group
Quick Move Properties 
Move With Us  

However, they will a discount of up to 15% off the market value of the property. So if they value your property at £200,000, they will only pay around £170,000. The advantage is that they will be able to do this within a matter of weeks, so it takes the uncertainty out of selling the property.

Alternatively you can prepare the property for sale and then put the property on the market. Make sure however you chose your agent very carefully as you need to be able to trust them to enter and exit an empty property.

Option Three: Keep and Rent out the Property
To rent a property out, you need really to commit to doing this for six months or more. It’s important to be aware that renting a property isn’t just about finding a tenant, taking deposit and sitting back and banking the rent.

You also need to make sure that you all own the property correctly from a legal perspective, so you MUST discuss this option with your legal company prior to making any decisions.

Over the last five years, that have been major changes to the law and most of these legal changes are in favour of the tenant, not you, the landlord. If you don’t abide by these laws, then the tenant in some cases can even sue you for £3,000!

Ideally, if you are renting a property out for the first time, use a letting agent. Make sure this is a letting specialist as opposed to a company that does sales and rentals as many estate agents don’t know how to run a lettings business properly.

If you want to manage the tenant on-going, then instead of full management, you can choose a ‘Let Only’ option where the letting agent finds the tenant and moves them in legally, with an inventory done, and even collect the first month’s rent. After that you can manage it. However if you don’t want calls at 1am in the morning to say there is a problem with the property – go for full management!

To be sure you are legal from marketing stage, make sure the property has:

1. Energy Performance Certificate
2. Gas Safety Certificate
3. Electrical Safety Certificate OR self certifying that the electrics are safe

Once you have found a tenant, you will need:-

1. An up to date tenancy agreement.
2. To protect deposits in a tenancy deposit scheme.
3. To carry out credit checks on the tenant.

Finally remember that any excess rental income versus allowable costs you receive could be taxable, so you’ll need to check this out too!

Making a decision at this emotional time can be difficult, so if you have any queries, then please don’t hesitate to contact me on 0845 838 1763 or email enquiries@designsonproperty.co.uk

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Source by Kate Faulkner