How to handle an unexpected property inheritance
INHERITING a property can be hugely overwhelming. When you’ve lost a loved one, the last thing you want to think about is what to do with the home they’ve left behind.
Deciding what do to with the property can be stressful and daunting as there are a number of options available to beneficiaries of a home: you can rent out the property, live it in yourself or sell it.
If you are selling the property with joint inheritors you will need to agree who is going to manage the sale and agree the minimum price you will all accept.
When you are ready to proceed you then have two options: put the house on the market and sell through an estate agent or sell the property with a private buying company which can guarantee a quick and easy sale.
If you prefer to put the house on the market with estate agents, you will need to prepare the property for sale – applying a fresh coat of paint and repairing any damage.
It is important to choose your agent carefully to make sure you trust their valuation and desire to sell the home, and you are happy for them to enter the property and conduct viewings if you can’t be there yourself.
However, if it is in your interest to sell the property very quickly, you may be reluctant to invest the time and money to put it on the market. In this case, you can opt to sell the property through a private buying company such as We Buy Any Home.
We will provide you with an initial offer within 24 hours of contact - enabling completion on a house sale in as little as seven days. We will also pay the solicitor’s fees for property sales, so beneficiaries can be assured that the offer made to them is the full amount they will receive.
If it is in a good area, and in good condition, renting it out is a beneficial way to keep the property as part of your estate, pay off the mortgage and even provide yourself some extra cash.
If you are considering renting out, you must be willing to commit to rent it out for six months or more, keep the house in good repair and make necessary updates and fixes when required and you have a full understanding of the legalities of being a landlord.
You will have to pay tax on any profit you make from the rental income and make sure the property is in full possession of energy, gas and electrical safety performance certificates.
There are two options available for managing a rental property. The first is using a letting agent who handles the legal process of moving your tenants in and any issues that occur, but you will need to pay them a fee. The other option is landlord management, which means you are in charge of managing the property and the potential midnight calls about broken boilers.
If the property is desirable, you may decide you would like to live in it yourself. If you are the sole inheritor this is slightly more straightforward, as it is your decision alone whether to inhabit the property. However, if you share the inherited property you will have to seek legal advice to draw up an agreement to ensure that all parties are compensated for their part ownership.
Again, you will need the agreement of your joint inheritors so it is best to discuss this with them before any decisions are made.
In either case, there are a few questions you need to ask before going ahead. Does the property have any debts? The value of the deceased person’s share is counted as part of their estate. The personal representative or executor for the deceased person’s estate is responsible for settling all financial affairs. They must ensure that all debts and any tax due is paid before they distribute the assets of the estate.
If you inherit a property which has a mortgage, you’ll be responsible for the monthly payments even if you don’t live there. If you are unable to pay these, there is a risk the property could be repossessed. An adviser will be able to help you work out your options or negotiate with your lender.
Are there any tenants in the property? If you inherit a property that has a tenant, you will have to take their legal rights into account. Giving them proper notice is important and it is important to seek legal advice to help you negotiate their contract if you don’t understand the agreement.