Over the next 4 decades Baby Boomers will inherit $27 trillion (that’s trillion with a T) in wealth, with a big chunk of that trillion coming from family real estate.
So it should come as no surprise that a lot of folks want to educate themselves on the sale of an inherited home. So how do you sell your inherited house? We’ll break it down. Here’s our 5-step guide to selling your newly inherited home:
1. Identify: Confirm who actually has claim to selling the inherited property right now.
First, you need to identify the heir of the property if you plan to sell an inherited house. This can be beyond tricky and believe us we have seen and heard it all. If Mom and Pop were prepared and wrote a will of inheritance, thank your lucky stars. However if Mom and Pop die without a valid will, and the deed to their property does not include joint tenancy with survivorship language, then issues may arise as to which persons have title to the inherited home. The property cannot be sold with clear title until the heirship issues are addressed and resolved.
This process can be complicated when there are many heirs, multiple marriages or several generations of people who died without wills. It becomes increasingly more difficult if the heirs won’t work together towards completing the process. Essentially, the more complicated the family story, the more involved the process can be.
At We Buy Houses Richmond Home Buyers, our in-house Title experts work directly with the Title Companies and communicate with family members to make the process as simple as possible. We prepare these documents at no cost to our sellers.
Many have resolved title issues and settled estates in quick and efficient manners by selling to We Buy Houses Richmond.
It is best not to attempt to resolve heirship and Title issues on your own, without an attorney. If your loved one dies without a will, We Buy Houses Richmond Home Buyers will work with the Title Company and a real estate attorney at no cost to you, ensuring title is clear before completing the sale and freeing you of any future liabilities. We pay cash and typically close on your home in 10 to 30 days depending on your situation.
2. Prepare: Make sure you have a vacant home insurance policy.
If all goes well a family member or presumed heir will take over maintenance of the property after the person passes. Maintenance may include obtaining a vacant home insurance policy to protect the estate from liabilities, keeping up with utilities, paying property taxes, maintaining lawn care and disposing of the contents of the house. Keeping up with the sale of an inherited home after someone dies can become an overwhelming task, but it’s critical to ensure a minimum of care is in place to protect the vacant home.
3. Get a fair price: Appraise your newly inherited home.
Sometimes the open market is the best answer but often times its best to sell to an investor.
Here are our top 5 reasons why it may be best for you to sell to an investor:
- Speed of sale
- Sureness of sale closing
- Sell as is
4. Taxes: The man always collects.
The bad news: Unfortunately, home sale tax exclusions do NOT apply to inherited houses. Normally, if you own a house for two out of five previous years, you benefit from this tax exclusion. However, if you plan to live in the inherited house for two years, and then sell it, you can still benefit from this exclusion – but many people choose to sell their inherited house right away.
The good news: Those who inherit a house and sell it DO benefit from the stepped-up tax basis. Normally, proceeds are calculated using the house’s purchase price + home improvements made to the house. When the house is inherited, however, the tax basis is the fair market value at the time of the owner’s death. If the house appreciated dramatically, this prevents those who inherited the house from owing substantial taxes.
5. What to expect during the sale of an inherited home- Siblings, Emotions and Lawyers – Oh My!
If you inherit a house, hopefully the process of selling the inherited property will be simple and straightforward; however, as we mentioned above, oftentimes it isn’t. For example, title problems are a common issue that people need assistance with when they sell their house to a company such as We Buy Houses Richmond Home Buyers. Some common title problems include:
- Unknown liens
- Illegal deeds
- Missing heirs
- Undiscovered will
- Errors in public record
Not only are family members coping with the loss of a loved one, but even in best case scenarios, dealing with the estate left behind only adds to the stress. While family members are usually well-intentioned, they may not be as organized as you thought. When a house is inherited, sometimes unknown marriages and children are discovered, which can complicate title resolution.
If you inherit a house, ask yourself three questions. 1) Is there a will? 2) Do you have a family tree? and 3) Are there tax issues?
Remember: We are here to help. If you inherited a house and plan to sell, or are simply researching your options, call us now for a no-obligation offer on your house in 24 hours or less. We will work with you regarding your options and your situation.
Contact us for a free, no-risk quote within 24 hours.
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