Selling an inherited house is challenging on many levels. The first is the emotional impact of dealing with the death of a loved one. Then there’s paperwork, legal responsibilities, and financial considerations to take into account. That’s why we compiled this guide to help you with the process of selling an inherited house.
The Probate Process
If there is a valid will stating the deceased person’s wishes, much of the legal proceedings may be avoided. In the absence of a will, the estate is typically distributed to the next of kin. However, estates frequently go through a legal process known as probate. This process exists to ensure that the deceased’s intentions are carried out when administering their assets.
When there’s a trust instead of a will, there’s no need for probate. Property can be transferred to the designated beneficiaries instantly.
Sole vs. Shared Ownership
When a will designates a single individual as the new owner of a house, it can greatly simplify the process. As the sole owner, the beneficiary is not required to speak with joint-heirs about disposing of the property. This means, if you’re a sole owner, you don’t need anyone else’s permission to sell the property.
However, it is common for a person to list several beneficiaries in his or her will. This means that a single asset, such as a home, can be owned by multiple people. To sell the house, they must all agree on the decision.
Handling Inheritance Disagreements
If there are multiple beneficiaries, there’s bound to be disagreement regarding what to do with the property. To spare yourself and your siblings the time, money, and stress during the home-selling process, you’ll need to come up with a plan together. Sit down and discuss all possible options. If you decide to sell the house, pick a single person to be in charge of the sale. Decide straight away how you intend to divide the profits and what the asking price is. Making these decisions in the early stages will help avoid more severe disagreements later in the sale process. Hiring a real estate agent experienced in selling inherited homes is another way to minimize inheritance conflicts and the need for a professional mediator.
Don’t Forget About Taxes
While most estates are not subject to the federal estate tax, the act of selling an inherited house might lead to taxation. However, this only happens when a home is sold for a profit. Suppose you sell a property for a price higher than what is determined to be its fair market value. In that case, you’ll owe property taxes on the excess amount received.
On the other hand, if you live in the inherited house for two years, you might be eligible for a tax exclusion.
Preparing For Sale
When selling an inherited home, people usually ask themselves, “should I renovate before selling?” If the home is out of date or in disrepair, it might be a good idea to invest in some improvements before you put it on the market. Remodeling a house can significantly increase its curb appeal, which, in turn, can lead to a quicker sale. Even minor fixes and repairs can sometimes considerably impact your chances of finding a buyer. Consult with an experienced real estate professional to understand what improvements will bring the best return, and what projects you should skip.
Selling in a Rural Area
If a house you inherited is in a rural area, you might be worried you won’t be able to sell it. However, it’s quite the opposite. For many years, rural communities have been getting smaller and smaller as many young people moved away, looking for better opportunities in big cities. Now, millennials are returning to rural areas in bigger numbers than ever before. They’re moving back to small towns for lower expenses, more affordable housing, and, overall, less stress.
Any real estate transaction can be challenging. The path from an offer to closing day is frequently filled with many ups and downs. Selling an inherited house is no exception to this rule. However, with the right team on your side and enough patience, the closing day might not be as far away in the future as you might think.
About the Author: Allen Garza is a retired real estate consultant. He likes to use his experience and knowledge to inform people on various real estate topics through his articles. In his free time, he enjoys reading crime novels and spending time with his family.