Sell Your House | A Step by Step Guide Including Inheritance Tax

Buy and sell your home
Buy and sell your home

A Complete Guide To Selling Your House

Sell my House - Inheritance Tax

Do you ever get the feeling that you think you know it all, but then you find out that you know diddly squat? Yes? good, it's not just me then. Let me explain, Recently my brother inherited my late aunts house, which he has been living in with her for the past fifteen years. When she passed away, we, in all innocence thought that he would be able to stay there, no problems, no interference, nothing, peaceful. Yeah right.

The vultures descended, the crows started circling and that deep mysterious thing called the government suddenly raised its rather scary head. Obviously we knew that he would have to deal with the deeds and probate, of course that was by the by, but then those two horrible words suddenly emerged. Inheritance Tax. Now the trouble was, I had heard about it of course, but it never dawned on me that it would in any way be relevant to me and my brother. Stupid I know, but as I said at the beginning, I thought I knew it all. After nearly two years of hiding under the proverbial blanket, we realised that however nice the government were being, they wouldn't let us off indefinitely. So, in July this year we started the only thing we could do. Sell My House and give loads of money to the government!

20,000 thousand pounds had to be paid. This was a huge amount of money to us, and if it all went wrong my brother would end up living in a tent on the edge of the motorway!

Source

We made the phone call to the Estate Agent

The estate agent came round the same afternoon, and took a few details about the house, how many bedrooms, looked around the front room, mumbled and took notes, then made a suggestion about how much the selling price would be, He also told us about how much percentage he would be taking for his fee, in this case it was 1% of the sold price.

If there were any questions, he answered then to the best of his ability. We were aware that a photographer would come around at some stage to take photo's of the property, but at that point we were not sure when.

This was at three o clock. At five o clock my brother phoned me and hissed down the phone, "There's somebody peering in the window" i said what? He said, There's somebody peering in... I said, I heard you, what I meant was, Why? I think it may be someone come to look at the house. I said, no It can't be, its too early. Not only had we not seen the photographer outside, but by five o clock it was already on the Internet. It was unbelievable. Like a giant wave, we were swept into the current, and we felt like we had lost control.

So be prepared for it to take off very, very quickly. Over the next two weeks we had at approximately six couples coming to see the house. You can either stay in and see them yourself, or you can leave a key with the estate agent and he or she can show them around. It's entirely up to you.

We chose to let the estate agent do it.

Coming to terms with it.

The one thing that nobody ever talks about is the emotional side to selling your house. Especially if it is one that has been inherited. Losing someone is a hard thing to do. The feelings that you have at the time of their passing is bad enough, but when you come to terms with it you don't realise just how much comfort you get from the fact that you are still living or visiting the house where they lived, worked, and joked with you. Also, remembering them taking you out when you children. The smells of the house, from the cooking to the smell of their perfume that has permeated the house and still does even now, two years on, is part of the fabric of your life. The walls envelope you like giant arms and when you feel low, the familiarity is comforting. I feel as I walk around the house, that she is just in the other room. it comforts me. I don't think that the government take this into consideration when then drop a whacking great bill on you for inheritance tax. But enough of that.

Next Step

When you have found a buyer, the estate agent will ring you and tell you about them and say what the are willing to offer. Be prepared to expect quite a large drop from what you have asked for. This is just standard. But don't let it drop too much. You have got to find another house for yourself, and you shouldn't have to lower your standards just to please them. Stick to your guns, there will always be another offer, if you have a good estate agent, they will always keep you informed about what is happening, from the big things to the little.

If you are happy with the price that is offered, the first thing you must do is get yourself a solicitor, and inform your estate agent of their name and address. He or she will then instruct you solicitor about the sale.

How not to get confused

Your solicitor will send you a client care letter which you then sign and send back, then come the forms. Oh my! Forms about fixtures and fittings, forms about property, Building work, guarantees, building consents, etc so on and so forth! All to be filled out and signed, then sent back to your solicitor.

Hidden cost alert

Imagine my surprise when I realised that we had to pay 150 pounds for this bit! We were exhausted from the mental strain of filling in all these forms and we had to pay for the privilege! So be careful and make sure you keep some extra money for a rainy day. Because it had just poured! This price can be negotiated if you are on low income. It's not just well off people who sell their house, sometimes you have no choice.

Also, around this time, a surveyor will come out to assess your property. In our case, it was also being done because the buyer wanted to extend the building. We are also having a structural engineer round for the same reason. This will be paid after the sale.

After two weeks, not a lot has happened yet. My brother and I have been frequent visitors to the solicitor, and to her credit, she hasn't got fed up with us quite yet! After taking back all the forms that we had to fill in, we found that there was always little niggles that seem to seep into our minds. Usually at three in the morning.

Inheritance Tax

The main one being, how do we pay the inheritance tax? We were not sure whether the solicitor dealt with it or should we send it to the Tax office, after the sale has gone through.

What we weren't aware of was that every time you need to see a solicitor, you may have to make an appointment to see a different one concerning a separate problem. For example, if you are selling your house, you would see one who deals with the house and property and things to do with the home. Another in the same firm of solicitors will deal with inheritance tax. and so on.

So we made an appointment to see the relevant solicitor, and then I received a phone call from them stating that actually we didn't need one at all! Evidently, as long as the probate has been dealt with and the Government inheritance tax office is aware that you are selling your house, you should be able to pay them after the sale. But you must have a solicitor involved in the house sale, so that they can just give the tax office a ring to confirm this. Obviously this is to make sure that you don't sell the house, grab the money and scarper to a tax free haven abroad!

Ah, I wish.

Now we can concentrate on looking for a new home for my brother. There is one more very important thing that you must do to make sure that there is no misunderstanding between buyer and seller.

Help Sell your House by kmbctv

Read the small print and check the contracts.

If you are planning to sell your house and move quickly, then the normal contracts apply, but if, like my brother, you wish to take your time for any reason, especially if it is out of your control, make sure the solicitor puts everything you say down in the contracts. Just one sentence could ruin your plans.

I am lucky, I know the buyer very well, and she has told us that my brother can stay there until February, as she is in no hurry to move in, as there is quite extensive work to be done on the house. But in the great wide world of gobbledegook laws and regulations, even though we know her, it is in her rights to ask my brother for rent, once the contracts have been signed.

But there is another way that is still legal and binding. And that is, to stop any misunderstanding, my brother can hold the deeds, until he decides to move out within that time span. The house will in all effectiveness be hers, but he will still pay house insurance, electric and gas. Also any other bill. If the deeds are signed over to her, in effect from that moment on it will be her house, and her bills. And he would be her lodger. So please be very careful about how you word everything, and think, think, think again. Watch every letter, word and phrase, because just one word can make a difference to the contracts. Be very careful.

One thing that was puzzling us, and that was the fact that the estate agents started to talk about Stamp Duty.

We in all our innocence, had never heard about this. So you can imagine our horror when we realised that, not only would he have to pay Inheritance tax on his house that he was selling, but he would also have to find another eight thousand pounds for the privilege of buying another house! Evidently anything up to two hundred and fifty thousand pounds, you have to find one percent Stamp duty, over that it went straight up to three percent.

Another Hidden Cost Alert!

.Now my brother is buying another place to live, we now have to find another one hundred and fifty pounds to start the process off again! Even though it is the same solicitor, and estate agent, and even though they still are asking for a huge amount at the end of the sale, we still have to cough up this money. The trouble is, if you cannot find it straight away, it means you will hold up the whole process. It seems to me that it costs more to sell your house than to keep it and live on the money that you seem to be throwing away! As my brother put it, He feels like he is in the middle of a great ocean, floating away on a small piece of driftwood, and he can see the shore but it is still a long way away.

Still, next week we sign the agreement contract so at least that is one more bit out of the way.

Lease Alert.

We have a new problem. The lease on the property that my brother is buying, has to be renewed in December, the solicitor is saying, Don't Buy It! evidently it is to much trouble. For one thing, if he wants to sell it later on, he will find it very difficult, secondly the lease holder may put the price of the lease up by thousands! Please, please, please check how long your lease is on your new property before you buy.

We eventually worked out the lease problem. And the end of the day, it was down to my brother. Did he want to risk it with a short lease? Or buy the extra? Well, he said, and I quote: ' I am never moving again, so what the heck is the problem?'!

So now it is nearly a year later, and he is settled in nicely. What started as a nightmare is now a lovely peaceful haven for him to keep warm, and be comfortable in. And that, at the end of the day is the most important thing.

--

So, If you have to Sell Your House please read all the stages properly, if you miss anything, you may find yourself with hidden costs.

Selling your house is not easy, but if each stage is handled correctly, you should be able to do it with only a bit of stress.

The one thing that I must reiterate is, make sure that you have at least 500 pounds, or dollars in the bank before you start. Otherwise you will find that these hidden costs will hold up the whole process. And that's the last thing you want when you move house.

More by this Author


Comments 11 comments

CASE1WORKER profile image

CASE1WORKER 5 years ago from UNITED KINGDOM

If your brother does not have family I suggest you look into an enduring power of attorney ( yeah it costs £500) the problem is that if he was to become ill and could not look after his affairs you could not just wade in and sort it. There is a government department that pays the bills out of his money but they charge the earth! SO, if a relative has a house or money or both it is best to invest the £500 now rather than leave it and pay later on ! ( just adding to your joy here)


Lucky Cats profile image

Lucky Cats 5 years ago from The beautiful Napa Valley, California

Nell, this is a mess! Even though you've come through it with your mental capacity still working, I am amazed at all the 'stuff' you have to endure. In the states, the real estate agent acts as the solicitor (lawyer, here)...all the paperwork, forms, contracts, etc. go through the agent. Now, if there are big problems or concerns, one could hire outside assistance in the form of a lawyer but, it isn't the usual way to sell property. Now, if there is probate then, a probate attorney does play a role here. Also, inspections are ususally done through the seller's or buyer's agent depending upon who agrees to what...if a seller really wants to sell, they can offer to pay, but, usually, it's the buyer who opts to actually HAVE inspections done (those that aren't requisite..some, are...following)..oh, yeah, I forgot to say...usually there is a seller's agent and a buyer's agent. If one agent plays both roles (for instance, the home the buyer wants is also being represented by the same agent and...not all agents play dual roles...confused?...it gets nuttier)

There is usually one inspection which is a general one unless...there are structural questions...or if the home is located in a flood zone, earthquake fault area, etc...then additional inspection might be required by the city/county/state..and, in some, but not all, cases, the buyer can waive inspections.

There are institutions here which do the "closing" procedures..this is their speciality. When a serious buyer places a small % of the agreed upon price...this is put in "escrow" which holds it as a promise from the buyer to complete the deal...thus, not backing out and causing the seller to lose a potential other buyer...

Ok...taxes are paid through a different attorney...depending upon how the seller handles their personal finance. This seems to be similar to the way your case was handled.

The tax for BUYING a home doesn't exist here..Oh, our realtors charge 6% of the actual sales price...3% goes to each agent but, 1% goes to the seller's agent's broker...yeah...they are like the 'backbone' of any real estate company..they, in essence, are the guarantors and also "the buck stops here."....they are responsible, ultimately, for the behavior and performance and honesty of their agents and the agents' dealings.

Of course, we have property taxes which are split up however it is to be divided between buyer seller depending on where the date of closing falls in the taxable year...

Oh, it goes on and on,. Over the years, I've sold a number of homes and, in the beginning, the 'contract' consisted of about 5 pages...now, it's a short novel!

YIKES

GREAT hub..I wish you all the luck and, oh, the emotional part of leaving the home of a loved one...you described it so well...I 'll just say...yes!

UP Awesome Useful Funny (sorry, but, ya' gotta' laugh sometimes, huh?)...and Interesting...and there should be a DISGUSTING and LUDICROUS and RIDICULOUS!!!!! subject not writing...writing is great!!! LO

I think I have this pretty much factual...I'm not an agent but I have bought/sold several times...so, it's become a bit familiar..hope this, at least, gives you a big LAUGH


Nell Rose profile image

Nell Rose 5 years ago from England Author

Hi, Caseworker, I totally understand what you mean, the trouble was my aunt never really thought about this sort of thing, we presumed that the house would automatically go to my brother. Then came along the inheritance tax, if my aunt had given the house as a gift, it would have overcome this, but of course we didn't know. 20,000 pounds was a lot of money. He could have stayed there, but they expected two thousand straight down! he couldn't afford that. it was a nightmare. Luckily he had me! lol I wore myself out doing nearly it all. It was like juggling two ten ton balls while standing on my head! pay for this, pay for that! etc. He is in his new place now, but we still haven't received the last bill, so we are waiting for the shock of the extra money to come! the government makes me so mad! That was my aunts money, she worked forty years for that house, and they took all that out of him. If this helps anyone then I have done it right, but I feel sorry for the people who have to go through this again, thanks so much nell


Nell Rose profile image

Nell Rose 5 years ago from England Author

Hi, Lucky Cats, as you said you don't have to pay tax to buy a home, but over here our government is so greedy. I am still so mad about it. The main trouble is that at least 70 percent of house owners in England will never have to go through this. The reason is that I live in a very expensive area. This sounds great, but the trouble is that it never used to be. I live in a small village in Buckinghamshire which is in the South of England. over the last twenty or so years, really rich people have moved in, especially celebs, and of course the real estate has gone sky high. If my brother had sold the bungalow up North, it would have sold for about 150,000 thousand pounds, approx 250, dollars, down South the price is at least 350,000! exactly the same size, exactly the same builder! Inheritance tax is charged over 300,000 pounds! in other words we get extra tax slapped on because they believe we can afford it! but of course we are only on a minimal wage, and my brother is off sick because of his back. So he gets about 180 pounds a fortnight! When he wanted to buy his new flat, he wanted one for 280,000 which was lovely, it had a garden and everything, but he would have had to pay at least another 8 thousand for stamp duty! so now, he is in a tiny flat, and I mean tiny!. that cost him 250,000! how ridiculous is that? in America you can buy a huge property for 1 million pounds, 1 and a half million dollars, but over here, down South you would only get a normal sized house! so, my by now my brother has only a few thousand left because of all the bills! thanks for all your info, its amazing to see the difference, we need to do this over here, thanks again nell


Lucky Cats profile image

Lucky Cats 5 years ago from The beautiful Napa Valley, California

Nell, I could really get on my soap box over what is happening to you and your brother...believe me, it is bad here...not in the same way but, bad nonetheless...we are taxed yearly on property (property tax...you probably have that, too) and, of course, it's based on the sales price...so, if a young couple buys a home for $400,000....and, right next door there is an identical house but the owner has owned it for, say, 20 years...well...the young couple will probably end u p paying 500% more in property taxes just because they paid so much more...they don't use any more services or require additional police protection..but, they paid more so tax is much much higher. UNFAIR! In California, there is Prop. 13 which holds the annual increase in property tax to 1% annually with an allowed 2% every so many years (can't remember how many...and, geesgh, I'm paying Ca. prop tax...go figure!! LO) Anyway, but most states don't have this safeguard so, at anytime during the year, a majority of ONE on any board of commissioners or councilpeople...can raise taxes!!! In SE Kansas where I am moving FROM..it is this way. Even with the economy in the dumps and people out of work...and properties devalued..w/official reductions in assessment from the County....taxes still go UP because they just change the rate at which they tax...called a "mill levy." Talk about screwy, unjust, unfair and outright egregious...unethical...oh, I could go on.

I know you guys across the pond are so heavily taxed...it's like socialism and, sorry but, I'm not into that. No Marxist ideology here! LO...


Nell Rose profile image

Nell Rose 5 years ago from England Author

Hi, Lucky Cats, thanks for coming back, that is unbelievable about the 400,000 house, when someone buys it for that price compared to someone living there for 20 years! I don't think that my brother has to pay yearly now, it seems our government takes it in one foul swoop! the trouble with Inheritance tax is that it is one of those things that is not necessary. One government gets in and says, no we won't charge it, another one gets in and puts it up in price! it is just greed, pure and simple. The stupid tax was the charge for checking out the bungalow for 'green services' for example, a man with a silly notepad came round just to see if my brothers gas bill was saving money because of cladding in the roof etc, this was a new tax, I believe they have dropped it now because too many people moaned about it! my brother got caught out right in the middle of the tax wars! typical! as I mentioned up North everything is so much cheaper, down South it ruins you! that's what makes me so mad when the Northerners complain about being 'hard up'! they say we are well off while they starve! Ha! perhaps we should change places, me go up north and them come down here, perhaps they will stop moaning then! lol


Lucky Cats profile image

Lucky Cats 5 years ago from The beautiful Napa Valley, California

Yea, we pay yearly....to receive an annual prop. tax bill of $8,000....is not abnormal, at all...and that is a low average figure....it's disgusting...there's so much more I could and want to say but I could really fly off the handle...the unjust practice of taking hard earned money from citizens and then squandering it, wasting it, having no regard for the true value in sweat and tears that the common man shed in order to fork it over to the gov.....really 'chaps my hide.'


Lucky Cats profile image

Lucky Cats 5 years ago from The beautiful Napa Valley, California

PS...And, I am so sorry about your and your brother loosing that family home..all the memories, the scents, the things around the two of you..what a shame that he had to give up his beloved home just to pay the gov....what a bunch of leeches! And, now, he has been relegated to a tiny place...for too much $...what a bunch of....you know what..this kind of thing really gets me angry! Well, you've certainly got my understanding of the frustration and bewilderment of it.


Nell Rose profile image

Nell Rose 5 years ago from England Author

Hi, Lucky Cats, that is so unfair having to pay on top of buying the place! We had the riots over here the other week and they have all been put in jail or on probation, I agree with the judgment but what about all the MPs in the government who are taking all our money? I can't see the difference myself! thanks so much for all your comments, much appreciated, cheers nell


Tiffany Latte profile image

Tiffany Latte 4 years ago from USA

I stopped to say hello. Your Hub's are inspiring, keep going.


Nell Rose profile image

Nell Rose 4 years ago from England Author

Hi Tiffany! lol! thanks for popping over!

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working