Settling the final affairs of someone that has recently passed away can prove a huge challenge to the loved ones that are left behind. Once an executor has taken control of the estate according to the deceased’s wishes, they take ownership of the deceased’s assets and distribute these among the beneficiaries mentioned in the will.
Executors or the legal personal representative of the deceased often decide to sell the property in a deceased estate and distribute the earnings among beneficiaries. This is, of course, unless the will stipulates that the home should be inherited by a beneficiary.
Selling property in a deceased estate might require some additional admin, but does not differ so much from selling a residence when the owner is still living. Read more about selling a deceased estate in this article, and make sure that all the bases are covered and all the legal requirements have been met.
Preparing the paperwork
Even before the property in a deceased estate is sold, there is some administration that needs to be completed in order to sell the home according to regulations. First off, the executor of the estate or the deceased’s legal personal representative will have to apply for the grant of probate. This document legally validates the will, and also confirms the executor as the person who may legally distribute the deceased’s estate according to the wishes expressed in their will.
Should a person pass away without a valid will in place, an application for the grant of letters of administration will have to be lodged. The executor or legal personal representative will have to receive the death certificate with the help of the funeral director before applications for grants of probate or grants of letters of administration can be lodged.
Once the grant of probate has been received, the executor of the will becomes the legal seller of the deceased property, and will take on the task of interviewing multiple real estate agents to help with the sale of the home, also getting valuations of the property from them. The executor will also confer with the real estate agent about how to sell the home (for example, via auction or private sale), and about the marketing of the property via online and traditional channels. The real estate agent will advise the seller of the deceased’s property about possible improvements to the property that can add value, and will see the sale of the home through from the negotiation phase, up to the moment that ownership of the property is transferred to the buyer.
Throughout this process, it is always advised that the executor or legal personal representative remain transparent about exactly what is going on, and keep the beneficiaries of the will well informed. Although a grant of probate is required to transfer ownership of the property, the home can be advertised and the contract of sale signed before it has been received – real estate agents just need to ensure that the contract mentions that the sale of the home is “subject to the grant of probate”.
How long do you have to sell a house after someone dies?
There is no set or required time within which a house from a deceased estate needs to be sold, although the time it takes to sell a property may have an impact on the tax implications associated with the sale.
Most homes from deceased estates take an average of six months and a year to sell, depending on the individual circumstances. Should an inherited dwelling be disposed of within two years after the death of the person it belonged to, there is an exemption on capital gains taxes owed on the sale. For the purposes of this exemption, a home will need to have either been bought before September 1985, or will have had to be the main residence of the deceased by the time of their death, and wasn’t being rented to someone else.
With this being said, the Commissioner of Taxation may grant an extension of the two-year exemption period if an application is lodged after two years have passed. Please check the guidelines about taxation of a deceased estate, and also make sure what the legal guidelines are in the state where the home is being sold. An online framework can be found online for Queensland, New South Wales, the Northern Territory, the Australian Capital Territory, Victoria, South Australia, Western Australia and Tasmania.
Preparing the house for sale
Just like any other property, it is important to get the house ready for sale. In this regard, the executor of the will or the legal personal representative of the deceased will discuss improvements, repairs and renovations with the real estate agent that is assisting them in the sale of the property. The real estate agent will conduct a thorough comparative market analysis of the home, which takes into account the physical features of the home and total amenities of the property, and also compares these to similar properties in the same city or suburb. If it is to be sold quickly, a home should be ready to move into without the buyer having to undertake renovations themselves. If there is not enough capital available to cover the cost of work to the home, the property can also be sold as a fixer-upper, but anyone involved in the sale of a deceased property should note that fixer-uppers do tend to spend a little more time on the market than homes that are ready to move into.
With regards to what repairs are necessary, the rule of thumb is that everything in the home should function as it is supposed to, without having to use special methods to make them work. Larger repairs like work on the plumbing or roof of the home may be costly, but will ensure that the property doesn’t linger on the market too long. Remember, discerning buyers will inspect the property very thoroughly, and not disclosing any faults will not bode well for sellers.
What happens once the property is sold?
Once the property has been sold, ownership of the home will be transferred to the buyer, and the executor or legal personal representative of the deceased will distribute the proceeds from the sale to the beneficiaries, as stipulated in the last will and testament of the deceased.
Find a real estate agent to sell the deceased estate
Selling a home can be trying in the very best of circumstances, especially considering the administration that is involved with putting a home on the market. Selling a property is not just as simple as advertising it and transferring ownership, and this endeavour requires the specialised expertise of someone that understands the ebb and flow of the property market that the house is being sold in.
Qualified and experienced real estate agents do far more than simply taking on the mammoth task of handling all the paperwork associated with the sale of the home. They also provide an accurate valuation for the property, in line with what comparable homes in the same city and suburb are going for, and have a huge hand in marketing the property effectively.
Furthermore, real estate agents also advise sellers on improvements that add value, and also recommend contractors that can get the job done. Real estate agents also handle all negotiations about the sale on behalf of the seller. When it comes to the family home of someone who has recently passed away, this is invaluable, as the real estate agent is an impartial bystander, whose express goal is to sell the home at the best possible price and in the shortest amount of time. Remember, real estate agents have a vested interest in getting a good price, as this will also affect the commission they earn on the sale.
Whether the property is being sold via a private sale or is being sold on auction, a real estate agent remains essential to all property sellers. For those selling a deceased property, a real estate agent provides empathetic support during a time that can be quite difficult. Taking into account all the other administration that comes with settling a deceased estate, having help with selling a property is truly a godsend.
Selling property that forms a part of a deceased estate is a part of the duties of the executor of said estate, of their next of kin, or of their legal personal representative, depending on the last wishes of the person that has passed away, as expressed in their last will.
Should a property not be directly inherited by a beneficiary, many executors decide to sell the home and distribute the finds earned from the sale to the beneficiaries of the will.
In this regard, selling with the help of a real estate agent can make the entire process far less taxing on the person who has been tasked with administering a deceased estate.
Perfect Agent recommends agents that have experience of selling all kinds of homes, including deceased estates. Still haven’t found an agent that understands your needs and is empathetic about your situation? Contact Perfect Agent for personalised recommendations today!