When you lose a loved one, dealing with the sale of the property can be a trying time in tandem with your emotional loss, but once the legalities are out of the way, it is exactly the same process as selling any other property, whether you choose to do so with an agent, or if you want to save the commissions and do it yourself through a company like buyMyplace (particularly useful where there may be numerous beneficiaries.)
Before you put the property on the market, there are some legal boxes you will need to tick, which if there is a will and a named executor, shouldn’t cause too much hassle. But…you do need to have these sorted before you can move forward.
Firstly, it is important to note there are no inheritance or estate taxes in Australia. And when it comes to legal terms, the person who administers the deceased estate is called the executor and those who stand to inherit from it are called the beneficiaries.
You can’t sell the property whilst ever it is registered to the deceased person, and one of the executor’s tasks is to arrange transmission of the house into their name, which empowers them to be able to sign contracts and other documents associated with the sale.
If the house is only in the deceased’s name you will need to investigate whether a grant of probate is necessary or if you need to arrange for letters of administration, which are usually required where the deceased left no will. Invariably you will require one of these two documents where the property was in a single name, which amounts to Supreme court permission for the executor to sell the property.
If the property is in joint names (like husband and wife) you probably won’t need probate as the property is automatically transferred into the name of the surviving joint tenant – be be carefully it is not a “tenants in common” arrangement, as that will require letters of administration because the property doesn’t automatically pass to the surviving owner.
The whole probate process can take between one and two months to complete, and it is advisable not to put the property on the market during that time. In truth you can list it, but the contract of sale would be subject to the property being registered in the executor’s name, which might get messy if you have a quick sale, and the probate is not ready yet. You could ultimately risking having the whole sale collapse if your documents aren’t in order. Better to use the time wisely by clearing the property of the deceased person’s possessions and doing any maintenance which might increase the sale price.
Sometimes the proceeds of the sale will be split among a number of beneficiaries, and most sellers prefer to sell by auction in order to realise the best price in the quickest time. Selling by auction doesn’t limit you to using an agent, and you can still sell the property yourself, save the commissions and engage an auctioneer for a much better price than using a traditional agent.
From the time you have your probate and the property is transferred into the executor’s name, the sale should run exactly as a normal property sale. Once sold, the executor then apportions the proceeds according to the wishes of the deceased.
Executors have up to 12 months to finalise the sale of a deceased estate. Where the timing is longer, there may be capital gains tax to consider. Executors may also need to complete a final tax return from the beginning of the tax year until the date of death. A financial advisor can help.