A 2017 study revealed that about 60 percent of all the wealth in the American population was inherited as of 2010. The statistics haven’t changed much over the years, with real estate being one of the top assets Americans leave behind as an inheritance.
Inheriting a home from your loved one is a wonderful gift. Based on your circumstances, you can opt to move into the house or use it as a source of rental income.
Sometimes, however, it makes more sense to sell the house. The challenge, of course, is how to go about selling an inherited home without the hassles that could waste your time, money, and efforts.
If you’ve been thinking of selling a home you inherited, we’ve prepared a comprehensive guide to help make the process as smooth for you as possible. Keep reading to learn more.
1. Know the Variables of Home Inheritance
Before you start the home selling process, there are a few variables you need to understand. These include:
The Value of the Home
You want to have an initial idea of the worth of the inherited house compared to other similar homes in the neighborhood. There are many online home value estimators that can help you do that.
Keep in mind that the figure you see won’t necessarily be what you receive from the sale. Other factors will come into play, such as the overall condition of your home.
Does the home have an outstanding loan? 60 percent of homeowners in the US have a mortgage. If the home you inherited has a mortgage, find out how much you need to pay.
Then find out how much the sales proceeds will net you.
Other Outstanding Debts
Other than the mortgage balance, find out whether there are other outstanding bills to account for. These may include property taxes that may have piled up over the years and now need to be paid.
Number of People Inheriting the Property
It is not uncommon for a given property to be inherited by more than one individual. If that’s your situation, you want to make sure that everyone agrees to the sale of the inherited home. Also, be sure to agree on the right person to manage the selling process.
2. Understand the Tax Implications
When you sell an inherited home, don’t expect to get a home sale tax exclusion. Tax exclusions are only extended to homeowners who’ve lived in the property for two or more years in the course of the last five years.
Of course, you can still take advantage of the stepped-up tax basis. For inherited homes, the stepped-up tax basis refers to the home’s market value at the time of your loved one’s death plus any improvements you’ve made to the home. This option helps you avoid paying huge taxes on a property that may have appreciated dramatically over the years.
Beware confusing estate tax with inheritance tax. You may want to consult a real estate attorney for guidance on the financial obligations of inheriting a property.
3. Get the Inherited Home Ready for Sale
Now that you’ve made up your mind that selling the property is the right step and have understood the final implications of doing so, it’s time to prepare the house for sale. So how do you do it?
Remove Personal Belongings
The toughest aspect of inheriting a house is going through the most personal belongings of your departed loved one. It’s a deeply emotional experience that triggers many memories.
Sort out their personal belongings into some cherished items you can keep for your family, items you can give away, and what to sell. Consider holding a yard sale to sell items faster.
A home that’s clean, empty, and staged shows better on the market.
Wait for the Completion of the Probate Process
An inherited home has to do through probate before you can sell it. During this process, the will is officially proved. The process shouldn’t take long if you’re selling a small estate.
Understand Who Has the Legal Mandate to Manage the Transaction
Where your loved one left a will, you must rely on the executor to handle the transaction. However, if the real estate property is in a trust, it’s the trustee who has this power. Where you and your siblings have inherited the property, one of you will have the ultimate responsibility to manage the transaction.
4. Choose a Competent Real Estate Agent
While there’s nothing wrong with selling a home on your own, it’s always a good idea to work with a seasoned real estate company or agent. Why?
They Can Help You Determine the Right Price
How you set your asking price will determine how long your inherited property sits on the market. Of course, you want the best price you can get for your home. Chances are you have spent time, energy, and money on repairs, renovations, and landscaping, so you want to get that money back.
A seasoned real estate agent can help you set a realistic price for your home. This way, you get the highest possible profit from the sale without having to wait for months to attract a buyer.
They Can Help You With the Styling
Presenting your home well boosts your chances of selling it. An experienced real estate agent should be able to suggest which tweaks can enhance your property’s appeal to buyers.
They Can Reach More Potential Customers
Reputable realtors always have potential customers at the ready. As soon as you engage their services, the real estate agent gets to work, identifying serious buyers, and negotiating on your behalf. Sometimes, they can even help make sure that your home sells before it hit the market.
Selling an Inherited Home Doesn’t Need to Be a Huge Challenge
For many people selling an inherited home can seem like a tedious affair. The truth, however, is that you can get your home to sell much faster and at the right price faster than you imagine. With some good understanding of the variables involved in inheriting property, how to prepare your property for sale, and how to choose a suitable real estate agent, things should be fairly easy for you.
Would you like a great deal on your inherited home? Please contact us today for a cash offer.