Selling it is certainly tempting, especially now that the harsh reality of COVID-19 is being felt everywhere. Good Move reports that over the past few months, online searches related to inherited property have grown by a whopping 86%.
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But selling an inherited property ain’t easy. You’ll have to deal with complex matters such as probate and inheritance tax. Plus, there is also the emotional side of things—dealing with the loss of a relative and parting with a property that houses all your treasured memories. This article will expound on the challenges you’re likely to face when selling an inherited property.
1. Having to Deal with Wills & Probate
Before you make any decision about what to do with an inherited property, you have to establish your relationship with the property. In other words, it has to go through probate.
Probate is the legal process of organizing the estate of a person who has passed away. During the probate process, a will is proved in a court of law as a valid public document that is the true last testament of the deceased.
Problems can arise, however, if the deceased didn’t leave a valid will. In such cases, you’d need to apply for a ‘grant of letter of administration.’ The application can only be done via post and involves complex decisions that only the court can make.
Even where a will exists, probate takes roughly 6 -12 months to be granted. Plus, it’s a costly process—probate specialists and solicitors typically charge an hourly rate or a fixed rate of between 1 – 5% of the value of the estate, plus VAT. The probate process can be very inconvenient, especially if you want to sell the house fast.
2. Disputes Over Jointly Owned Property
Inheriting a house jointly can often lead to disputes where the two owners have very different ideas about what to do with the property.
You’ll need to make decisions jointly with whoever you have inherited the property with. But problems can arise when both owners have different opinions. For example, you want to sell the property but the other owner wants to live in it.
In such cases, selling the property would be difficult as both parties must act together. If both parties can’t reach a consensus, then one person can apply to the court for an order for sale.
Once granted the order for sale, you’ll have many options to sell the house. One of the most convenient options is to contact a property buying company in London for a guaranteed and hassle-free cash purchase of your inherited property.
3. Dealing with Mortgage on Inherited Property
When you inherit a house with a mortgage in the UK, you become responsible for making the mortgage payments. This complicates things further when it comes to selling the property.
In some cases, the deceased may have had a life insurance policy that can be used to clear off the mortgage. In the event the mortgage isn’t covered by the policy or the policy is not enough, you’ll need to speak with your lender about having the mortgage in your name.
However, this can also prove difficult if you already have another mortgage in your name as you’ll have to pass an affordability test for a new mortgage. Selling the property might also prove difficult since you’ve to go through the lender first.
Selling an inherited property can be a challenging process, especially if you’re new to probate.
Besides the challenges mentioned above, you may also need to hire a tax expert to advise you on inheritance tax and its remittance procedure, something that you’d not do when selling a house under normal circumstances.