Selling a deceased estate
Regardless of whether their passing was expected or sudden, handling the administration that comes with the death of a loved one can be challenging.
And that’s particularly the case if property is involved and needs to be sold prior to the estate being settled.
So, what’s involved in selling a deceased estate? Who is responsible and how long does it take?
The formalities
In the immediate aftermath of a loved one passing, the key document to locate is their will. This crucial piece of legal paperwork will outline who is responsible for administering the estate (the executor/s), who the beneficiaries are and how the estate’s assets are to be distributed.
The executor will then need to apply to the Supreme Court for a grant of probate to begin the process of carrying out the instructions in the will and acquiring this might take up to four weeks.
If there is no valid will, or no executor has been named, a grant of letters of administration will be required.
Once you have the grant of probate or letters of administration, the property title is then transferred to the executor/s of the estate.
The executor/s of the will then become the property vendor, making decisions around which agent to appoint, the price and how the property will be sold.
It’s important to note, there may be different legal requirements relating to inherited property depending on what state you’re in, so it’s a good idea to familiarise yourself with the relevant state or territory legislation.
Co-tenants and couples
The situation is slightly different if you’re the co-tenant of the property. For example, you were in a couple and your partner has passed away.
In this instance, you can sell the property without requiring a grant of probate or letters of administration, but you will need the property title to be transferred into your name prior to it being sold.
Ownership
Before you list a property as part of a deceased estate, it’s critical the property is transferred into the right person’s name.
Unless you’re the co-tenant, this can only happen after the grant of probate or letters of administration.
Only after the title has been transferred from the deceased to the joint tenant, executor, or personal representative, can the property be sold.
Transparency is key
One of the biggest challenges of selling a property as part of a deceased estate is that there may be more than one executor and multiple beneficiaries involved. As a result, things can quickly get complicated if there are differing opinions on how a property should be sold.
That makes transparency paramount. The executor should seek multiple appraisals of the property and consider whether auction might be the best and most transparent sales method.
Tax and debts
While the actual process of selling the property isn’t dissimilar to any other real estate transaction, there are a few extra administrative things to consider, including any tax and debts associated with the estate.
These must all be settled before the estate can be finalised and the proceeds distributed, and this includes things like rates, water charges, stamp duty, income from an investment property etc.
Timeframe
In most cases, executors have up to a year to finalise an estate, but that doesn’t mean the property needs to be sold within that timeframe.
Instead, beneficiaries may opt to hold it as a rental property, or retain it as a family home, but it’s important they are aware of and consider the financial implications.
If the property was the main residence of the deceased, the property can be sold within two years of their death without capital gains tax being applied.
A great agent is a must
Between legal requirements and multiple parties with differing opinions, selling a deceased estate can be a tricky process to navigate.
That’s where a great agent can make all the difference. A professional and experienced agent will guide you through the process, acting as a middle-man and ensuring everyone is on the same page and clear when it comes to pricing the property, marketing it, and deciding on the best method of sale.
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