Selling a property you’ve inherited may feel overwhelming, especially as you navigate the emotional, financial, and legal considerations. You might want to sell because you don’t live near the property or don’t want to handle the upkeep.
It might also be out of your budget to keep the home. Inheriting property sounds nice, but it makes you immediately responsible for all the costs associated with the home, including the mortgage payments, property taxes, insurance, utility bills and maintenance.
If you’ve inherited a home through a will — or if the deceased didn’t have a will — the property must go through probate, the legal process of validating a will, before you can sell it. There are a few situations where you can avoid probate and the title is passed directly to you, but how you inherit the property, if the title is clean, if the estate has debt to settle and whether there’s contention between beneficiaries, dictates how quickly you can sell it and if you must go through court proceedings.
Florida Cash Home Buyers can help you navigate the process and purchase your home whether your property is located in Orlando, Miami, or any other Florida location. We have knowledgeable probate lawyers who will work with you and ease the stress. In this comprehensive guide, we cover all the steps you need to take to sell an inherited house in Florida.
How Long Does It Take to Sell an Inherited House in Florida?
How long it takes to sell a house depends on many factors, including if the estate must go through probate, if all heirs agree to the sale, if the title is clean, if the property is being rented and market conditions.
Estate planning tools that avoid probate, like Lady Bird deeds, revocable trusts and joint ownership with rights of survivorship, allow for the direct transfer of assets upon the death of the owner. This means you’re able to list the property quickly, assuming all beneficiaries can agree and there aren’t outstanding issues like liens.
If the property goes through probate and everything goes smoothly, the process takes about 2-3 months before the title can be transferred. In more complex cases, like if the estate needs to file a federal tax return, the will is contested or there is no will, probate can take 12 months or more.
Once the title is in your name, you’ll have the most flexibility with how you can sell the house. However, there are situations that allow home sales during probate, which we explain below.
Can You Sell an Inherited Home without Probate?
Yes, you can sell an inherited home without probate if you inherit the property through a Lady Bird Deed, revocable trust or have joint ownership with rights to survivorship. Probate is typically required if the decedent wills the property to beneficiaries or has no will.
Lady Bird Deed (Avoids Probate)
A Lady Bird Deed, which may be referred to as an Enhanced Life Estate Deed, is a legal document used in some states that changes the way property is owned and transferred. It allows someone to pass on property to beneficiaries without going through probate while retaining complete control over it during their lifetime. This means that they can sell, lease, mortgage or alter the property without consent from the beneficiaries.
This type of deed significantly simplifies the process of selling inherited property, eliminating the need for probate court involvement and saving both time and legal expenses.
Revocable Trust (Avoids Probate)
A revocable trust, also known as a living trust, is a legal entity created to hold ownership of an individual’s assets during their lifetime, which can be altered or revoked at any time. This type of trust allows assets to bypass probate because the assets are owned by the trust, not an individual.
If the inherited property was placed into a revocable trust before the original owner’s death, the trustee can sell the house without probate court approval, making the sale process more efficient and straightforward.
Joint Ownership with Rights of Survivorship (Avoids Probate)
Joint ownership with rights of survivorship is a form of property ownership where two or more individuals collectively own a property. Upon one owner’s death, their share of the property is automatically transferred to the surviving owner(s). It’s most typical in a marriage, where joint property automatically goes to the surviving spouse, but the agreement can exist between any two parties.
This type of ownership avoids probate because the property never becomes part of the deceased person’s estate. If a surviving joint owner decides to sell the house, they won’t face any of the legal complications that can come with dealing with an estate.
Willed to Beneficiaries (Probate Required)
When property is left to one or more beneficiaries in a will, or if the deceased didn’t have a will, they’ll have to go through probate court.
Probate is a legal process that happens after a person’s death that administers their estate, including finances, properties and other assets. It typically involves identifying and inventorying the deceased person’s property, paying their outstanding debts and taxes and distributing the remainder of the estate according to their will. A will usually can’t be settled without going through probate.
If there’s no will, the assets are distributed according to state law. A court usually oversees this process to ensure everything is done in accordance with the law and that all creditors are paid.
Simple probate cases can take two to three months. More complicated situations, like if the estate has to file a federal tax return, may take 12 months or more.
Selling an Inherited House During Probate
In some situations, a personal representative — a court-appointed person, bank or trust company who handles the estate — may be able to sell a home during probate, if it’s determined to be in the best interest of the estate.
The ability to sell a home during probate depends on several factors, including the type of probate administration, the instructions in the will (if one exists) and whether the sale is necessary to pay the estate’s debts.
If you’re considering selling your inherited home during probate, weigh the pros and cons and consult with a seasoned probate attorney. Even if you or the personal representative can find a buyer, the court may need to approve the sale.
When a Home May Be Sold During Probate
Here are the main circumstances that allow the sale of a home during probate.
- The court determines it’s not a homestead property. Homestead properties are exempt from creditors. However, if the house isn’t a homestead property, it may be sold to pay debts. One goal of the probate process is to pay outstanding debts, and creditors have three months to make their claims, which is part of what makes the process so long.
- The will contains a power of sale clause. Florida Probate Code 733.613 covers what transactions the personal representative is authorized to make. A power of sale clause is a provision in a will that allows the representative to sell the home without approval from the court. Without a power of sale clause, the personal representative has to have court approval for the sale.
- The decedent did not have a will (intestate). If there is no will, the personal representative may sell the estate with court approval.
When a Home May Not Be Sold During Probate
In these situations, a home cannot be sold during probate.
- The Homestead Exemption law applies. The Homestead Exemption law is designed to protect a primary residence from general creditors’ claims, meaning creditors cannot force the sale of a homestead property to satisfy a debt.
- The beneficiaries object. If there isn’t a reason to sell the house, like paying off debts, and the beneficiaries object to the sale, the court may not approve the sale during probate.
- A petition for Summary Administration has not been granted. Summary Administration is a simplified probate process in Florida, used when the value of an entire estate is $75,000 or less (excluding the primary residence) or when the deceased person has been dead for more than two years. Done correctly, it takes only three to four weeks, meaning heirs can avoid full probate proceedings and have assets distributed much faster. Just like during normal probate, a property can’t be sold if a Summary Administration hasn’t been granted. Once the court grants the Petition for Summary Administration, it issues an order distributing the decedent’s assets to the rightful beneficiaries. After this order, the executor or personal representative of the estate has the legal authority to sell the property on behalf of the estate.
Remember, every situation is unique. It’s best to consult a probate attorney to understand your options.
Once a property sale is complete, you’ve passed the creditor claim period (90 days) and debts and probate fees have been paid, money from the sale is distributed to beneficiaries. Before the 90 days are up, funds from the sale are typically held in either a court-restricted account or the petitioning attorney’s account until they can be legally disbursed.
Do All Heirs Have to Agree to Sell the Property?
Agreeing to sell the property is the easiest way to proceed, but it’s not the only way. You may be able to force the sale with a partition lawsuit.
If multiple parties inherited the property, you typically have to make decisions about the sale together — like setting a price, accepting an offer or deciding to sell at all. When inheritors disagree or otherwise reach an impasse and professional mediation doesn’t help, a co-owner can force a sale through a partition lawsuit.
This usually means the court will order the property to be divided, if feasible, or sold with the proceeds split among the owners. A court-appointed commissioner typically handles the sale, not the owners, so beneficiaries don’t set or need to agree on the terms — the court retains control and makes the final decisions regarding the division or sale of the property. Investors like us can also buy a partial interest in the property and handle the rest of the legal process.
Taxes on the Sale of an Inherited Home
When selling an inherited property, you may wonder what taxes apply and how they might impact your proceeds. While Florida does not have a state inheritance tax, there may be other federal taxes you must be aware of when selling the property.
Every situation is unique, so make sure to talk to a qualified tax advisor for help navigating the tax implications of your inherited property.
Federal Capital Gains Tax
Capital gains refer to the profit made from selling a property or investment. The difference between short-term and long-term capital gains depends on how long you’ve held the investment — less than 12 months is short term and more than 12 months is long term. This tax is calculated on the difference between the home’s value at the time of inheritance (known as the “stepped-up” basis) and the selling price.
Note that you can deduct any expenses associated with selling the house, such as agent commissions, closing costs and any improvements made to prepare the house for sale. These deductions can lower the amount of your capital gains and potentially reduce your tax liability.
However, in most cases, homeowners selling an inherited house may not have to pay capital gains tax. If the value of the home has not significantly appreciated since you inherited it, or if you’ve used the property as your primary residence for at least two of the last five years, you may qualify for tax exclusions.
Short-term capital gains are taxed as ordinary income. How much long-term capital gains tax you pay depends on factors like your overall taxable income, though the highest tax rate on long-term capital gains is no higher than 20%.
Estate Tax
Although Florida does not impose an estate tax, the federal government does levy an estate tax if the total value of the deceased’s estate surpasses a certain threshold. The estate tax doesn’t directly affect the heir selling the house but can impact the overall inheritance if the estate is large enough to be subject to this tax.
The estate executor is responsible for filing an estate tax return, if necessary, that is due within nine months after the decedent’s death. However, an extension may be requested. It’s essential to communicate with the executor to understand any potential estate tax liability and how it might impact the timing of the property sale.
Filing is necessary if the deceased’s gross estate is higher than the filing threshold for the year of their death. The filing threshold for 2024 is $13,610,000.
Depreciation Recapture Tax
If the deceased used the property for income-producing purposes and claimed depreciation and you then sell the property at a gain, you might be subject to depreciation recapture tax. This means you’d be taxed on the portion of the gain equal to the depreciation deductions taken by the deceased or by you if you rented the property out before selling it. Depreciation recapture is taxed as ordinary income, up to a maximum rate of 25%
Ways to Sell Your Inherited Home
There are several ways to sell your inherited house in Florida. Each method has its own pros and cons; the best choice depends on your circumstances and preferences.
1. Real Estate Agent
Working with a real estate agent is one of the most traditional methods to handle the sale of inherited property. Agents have extensive knowledge about the real estate market and the selling process, and they can provide invaluable advice when setting the sale price and negotiating with potential buyers.
Choosing a local agent can be particularly advantageous. Local agents have intimate knowledge of the neighborhood, current market trends, and potential buyers’ preferences. They may also have a network of local professionals, like photographers and home stagers, who can help present your property in the best possible light to attract buyers.
The advantages of this method include having a professional handle the complexities of the sale, helping with paperwork, and using their network and resources to market the property effectively. However, to save money you may want to consider selling your home without an agent because selling through an agent means paying agent commission fees, typically around 5% to 6% of the sale price.
2. Real Estate Investor
If you’re looking for a quick sale and are okay selling below market value, then selling to a real estate investor could be a viable option. These buyers, often called cash buyers, can close deals fast, usually within a few weeks. They typically buy the property as-is, meaning you won’t have to worry about making any repairs or updates.
While this can ease the burden and speed up the selling process, doing your due diligence is essential. Research potential investors thoroughly, request proof of funds to ensure they can complete the purchase and consult a real estate attorney to protect your interests.
The main advantage of this method is the speed of sale, which can be particularly helpful if you’re dealing with a difficult financial situation or want to distribute the estate’s assets quickly. However, the trade-off is that you may get a lower value for your home, as investors need to buy at a price that leaves room for them to make a profit.
If you want to see how much we can offer for your inherited Florida home, or just have any questions about the process, feel free to reach out 🙂
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3. For Sale by Owner (FSBO)
In a For Sale By Owner (FSBO) scenario, you take on the role of the real estate agent. This means you’ll handle everything: marketing the property, hosting open houses, negotiating with buyers and handling the paperwork.
The primary benefit of selling the house yourself is saving on agent commissions, potentially adding to your bottom line. However, selling a house is a complex and time-consuming process.
Online real estate marketplaces can help your property gain visibility. However, not all marketplaces will post your listing on the MLS, and some charge a fee to do so. Make sure to do your research and understand the pros and cons of different platforms.
Selling your home on your own requires a deep understanding of real estate transactions and legalities, a strong negotiation skill set and a significant time commitment. With the necessary expertise, FSBO sellers can sell the property and get the best possible price.
Despite the potential savings on agent commissions, FSBO can be challenging if you deal with multiple inheritors. In such situations, coordinating efforts, making decisions and managing the process falls entirely on the inheritors, which can strain relationships and lead to disputes. Consider this option carefully if there’s potential for conflict among the inheritors.
4. Auction
Selling an inherited house at an auction can be an effective way to sell the property quickly. In an auction, the highest bidder wins, potentially resulting in a higher selling price, especially if the property is in high demand or has unique features. But there’s a risk that the property could sell for less than its fair market value if the auction fails to attract high bids.
An auction might also not be the best choice if the house is in a less desirable location or requires major repairs. Potential buyers at auctions are typically looking for deals, and they might be deterred by a property requiring additional investment after the purchase.
On the other hand, if the property is unique or has highly desirable features, an auction could drive up the price due to competitive bidding.
If you’re thinking of selling your inherited home, give us a call at (954) 519-7040 or fill out our form to receive your cash offer. We’ll be happy to guide you through the process and you can get an idea if selling to us might be a good option for you or not.
What Should You Expect During the Sale?
Selling an inherited property in Florida involves several steps, from initial preparation to finalizing the sale. If you sell through a traditional realtor, the process can take 90 to 180 days. Here’s what to expect at each stage so you can confidently navigate the process.
Cash buyers like us are a quick and hassle-free alternative, helping you expedite what’s often a stressful and emotionally draining process, especially if you’re dealing with a deceased loved one’s home.
Initial Preparation
After you make up your decision to sell the property, your first step should involve preparing the house for sale, including:
- Evaluating the house’s condition: You’ll need to assess what repairs or updates are necessary to enhance the value of the property so it’s more appealing to potential buyers.
- Identifying required disclosures: Florida law requires sellers to disclose any known defects that could materially affect the property’s value. Consult with a real estate attorney or knowledgeable agent to ensure you know what needs to be disclosed to potential buyers.
- Hiring a professional stager: A stager can help you arrange the home to highlight its best features and maximize its appeal.
- Getting a home inspection: Although not required, a pre-sale home inspection can help you anticipate issues that might arise during the buyer’s inspection.
Pricing the House
Next, you’ll need to determine a competitive listing price for your home. This will usually involve:
- Completing a comparative market analysis (CMA): This analysis, typically performed by a real estate agent or broker, compares your home to similar properties recently sold in the area.
- Understanding the local market: Beyond the CMA, consider the state of the local market, including the demand for homes like yours, the time of year and the general economic climate. These factors can impact the price you can realistically set.
- Considering an appraisal: Hiring a professional appraiser can give you a more precise valuation.
Marketing the Property
Once the home is ready and the price is set, you’ll list and market the property. This could involve:
- Creating an MLS listing: Most buyers and realtors use the Multiple Listing Service (MLS) to find properties. Ensure your home is listed here to maximize exposure.
- Leveraging social media: Don’t underestimate the power of social media to reach a wider audience. Posting your listing on platforms like Facebook or Instagram can attract potential buyers, especially if the property has unique or attractive features.
- Using online platforms: Websites like Zillow and Trulia can help you reach a wider audience of potential buyers.
- Hosting open houses: Open houses allow interested buyers to view the property in person. Ensure the house is clean, decluttered and well-presented for these events.
Negotiating and Closing the Sale
Finally, once you’re working with potential buyers, you’ll have to negotiate and close the sale. This stage includes:
- Reviewing offers: You may receive several offers, especially in a hot market. Review each offer carefully and negotiate terms as needed.
- Understanding contract contingencies: Offers can come with contingencies, such as a satisfactory home inspection, mortgage approval, or selling the buyer’s current home. Be aware of these contingencies and how they could impact the sale process.
- Dealing with remaining personal property: If personal items are left in the house after the sale, you must arrange for their removal. Consider donating them to a local charity or arranging a pick-up service to dispose of them responsibly.
- Accepting an offer: Once you’ve settled on an offer, you’ll need to formally accept it and move into the closing process.
- Closing the sale: During closing, you’ll finalize all paperwork, typically with the help of a title company or real estate attorney. The house will then officially transfer to the new owner.
Post-Sale Responsibilities
After the sale is complete, there are still a few loose ends to tie up. For example, if the deceased’s will is being probated, the executor or administrator of the estate will need to report the sale to the probate court.
Moreover, it’s also necessary to report the sale to the IRS, especially if there are capital gains. In addition, you may need to finalize utilities and address changes.
Florida Cash Home Buyers Make the Selling Process Stress-Free
Navigating the probate process is difficult, especially when you’re also dealing with the death of a loved one, but you don’t have to go through it alone. We can make the process quick and simple. We’ll not only buy your home — we’ll buy it as-is, and tailor our offer to your specific needs. Contact us today to see how we can help.