While many dream of receiving a financial windfall through an inheritance, few expect that inheritance to come in the form of real estate. Inherited properties such as homes are a common occurrence, but you may not be ready to take on ownership of another home. Rather than owning or leasing your newly obtained home, the best choice may be to sell the property. However, the sale of a inherited property can involve unique elements that you should be aware of before beginning the process
At The Garnet Property Group, we work with individuals seeking to sell their inherited properties daily. To help you understand the process, we have put together a helpful guide to selling an inherited home.
Before you take your first step to put your newly inherited home on the market, your first step should be to do your research. Compared to a normal real estate purchase, inheriting a home involves many legal differences and implications that you should be aware of before heading to market.
If the home has moved into your ownership through the death of a family member, it is important to discover who has the legal ability to handle the asset. Some individuals will set up their property to move to a legally-appointed executor. This can be an individual or an entity such as a real estate company. The executor of the estate will be the chief individual involved in the sale of the property. Ensure that you are the appointed executor of the home prior to setting up conversations regarding sale.
The estate will also need to move through a legal process known as probate prior to being ready to sell. The probate process will ensure that every asset belonging to the deceased is legally transferred according to any available will. While the property is moving through probate, the executor must maintain the home.
Another element to consider is the financial situation surrounding the inherited home. Ask yourself the following questions once you inherit any home property:
Having a clear picture of the financial situation surrounding the home can help set the stage for a smooth and successful sale. If you need help working through any of the legal issues surrounding an inherited home sale, a property owner group such as The Garnet Property Group can help walk you through the entire process.
Once you are ready to sell your inherited home, there are three basic stages to consider:
Handling any repairs, updates, or legal situations regarding the property prior to placing the home on the market.
The sales process, including partnering with a real estate team that can help you sell an inherited home from market introduction to closing.
Before you enjoy the benefits of turning an inherited home into inherited sales income, there are a variety of considerations you should take into account.
In the below guide, we will break down each step of this process to help you see a clear picture of what to expect in the inherited home sales process.
The first step in preparing an inherited home for sale is to handle all legal issues related to the property. As stated above, establishing the legal executors of the estate, allowing the property to work its way through probate, and handling any financial issues are vital to ensuring a successful sale without hiccups. This should also include researching any necessary tax laws related to the sale of an inherited property.
Once you are satisfied with the legal state of the property, you may be ready to move ahead on the sales process. The first question that you must ask yourself is whether to sell your newly inherited home in an “as-is” condition, or to invest in repairs or update to increase the value.
The first step in the sales process is deciding whether to sell your property yourself or to partner with a real estate agent. While you may be tempted to sell the property yourself, there are unique issues that may arise with the sale of inherited property that make partnering with a real estate team beneficial.
As an heir to the estate, you can choose to sell the home in an “as-is” condition – simply placing the property on the market to start the process quickly. In this case, the homeowner need only remove the belongings of the previous owner to prepare for sale. Small fixes or issues that arise during inspections should be addressed as you would any other home sale.
A great way to quickly sell an inherited home “as is” and possibly avoid costly closing costs is by working with a property management group. By working with a group such as the Garnet Property Group, you can close in as soon as two weeks with a cash offer, and save on various closing costs.
Another option is to try and increase your sales price through upgrades and updates to the home itself. Depending on the state of the property upon inheriting, it may need many or few repairs and updates to be ready for the market. When it comes to making updates to the home prior to selling, compare the home’s equity value to other comparable homes to determine whether updates are necessary.
A unique element of selling an inherited home is the need to handle the personal belongings of the previous owner. If the home is full of furniture, belongings, and other personal effects, it may be necessary to contact an estate sale company prior to placing the home on the market.
An estate company can hold a professional auction to sell a majority of the home’s items and clear space for sale – for a commission. Depending on the state of the home, the need may be worth the commission.
Now that you are ready to place your inherited home on the market, here are some of the important aspects to consider when it comes to selling the home.
The first step in the sale process is to decide how you will sell the property.
Whether you decide to sell the home with a real estate agent or yourself, do your research to discover the unique elements required for placing an inherited home on the market. A real estate agent or property purchasing firm who has experience working with inherited properties can help you stay aware of unexpected parts of the process ahead of time.
When you partner with a real estate agent or property team, you can trust that the price you set for the sale is comparable with similar properties and appropriate for the current housing market. This will ensure that you gain the best sales price possible to sell your home quickly, and make the sales price stretch farther.
When you go to sell a home that is not your primary residence, you may not be aware of the underlying issues related to the property. Before you place the property on the market, it can be beneficial to hire a home inspector to come look at the home. Consider handling any issues that the inspection finds to ensure that the sale of the property moves quickly with any potential buyers.
Once you are satisfied that the home is ready for the market, it’s time to go live! Follow the same processes that you would for selling your own home. Maintain the state of the home for showings, address any issues raised by potential buyers or your agent, and negotiate for the best contract price.
If you notice that the home is not gaining as much traction with buyers as you expected, consider contacting a home purchasing company that can offer cash offers for investment properties.
Once you find a buyer for the home, complete the sale as you would any home sale. Follow through with the necessary closing actions, and ensure that the property passes to the new owner with transparency. Communicate any extra house-related elements- such as a homeowner’s association – and you will be ready to finalize the deal! With any luck, you will reach an agreement on the property that is similar to the equity value of the home.
Congratulations! You’ve sold your inherited property, and are now excited to enjoy the benefits of a monetary inheritance rather than real estate. However, before the process is finished, ensure that the final details are handled to give yourself peace of mind.
Any financial obligations you may still be responsible for handling must be finalized prior to finishing the process. Ensure that you have paid the final mortgage payments, any outstanding utility costs, or maintenance issues before the new owners receive the keys to the property.
As a seller of an inherited property, you are required to report the sale of the home to the Internal Revenue Service (IRS) for the sale to be recorded. You will likely need to follow up with any current or future tax payments that will need to be made for capital gains taxes or inheritance taxes.
If the property was split among heirs, it is likely that you will need to communicate with the other parties involved to ensure that the proceeds of the sale are split appropriately. By handling any financial situations with family members, you can avoid costly legal issues and familial headaches related to the inheritance.
If you follow the above step-by-step guide, you will be ready to sell your inherited home and enjoy the benefits of extra income via sales proceeds. However, if the above steps seem outside your expertise or timeframe, consider working with a team with years of experience working with and successfully selling inheritance properties.
At the Garnet Property Group, our team of expert real estate professionals can help you develop a personalized plan for preparing your inherited property for the market and selling the property in your market. Contact our team today to learn more about how to quickly move your inherited real estate to a cash offer.