Selling inherited property can be a complicated process with many financial implications. It is important to understand the tax laws and estate sale procedures before making a decision about what to do with the property. Inheriting a house can be a great gift, but it can also be a financial nightmare if not handled properly. There are a few steps you can take to minimize the risks and maximize your return.
The first step is to get the property assessed. This will give you an idea of how much to list the property for and will help you determine if any capital gains taxes are due. You can use an online home Sell Inherited House value calculator to get an initial estimate, but a professional appraisal is usually required to confirm the value and to calculate any potential profits. The appraiser will look at the condition of the home and compare it to other homes in the area. They will also consider any special features that may increase the home’s value, such as an updated kitchen or a pool.
Another thing to consider is whether or not the property has a mortgage on it. If it does, you will need to find out how much is owed and then subtract that amount from the current market value of the property. If the mortgage is more than the property’s current value, you might want to consider a short sale. A short sale can be a complex process, so it is best to work with a real estate agent who has experience in probate and inherited properties.
If you and your siblings disagree about what to do with the inherited property, you will need to file a lawsuit called a partition action in court. This will give you the opportunity to sell the property and split the proceeds evenly between you and your siblings. It is possible to settle the dispute before the lawsuit is filed, so you can avoid a forced sale of the property.
A common mistake is hiring just any real estate agent to sell the inherited property. It is important to find an experienced real estate agent who has worked in the local market for a long time and is familiar with the probate process, inheritance taxes, and special situations like trusts and quit claim deeds. You can use HomeLight’s free Agent Match tool to connect with top-performing agents who have experience working in your area.
If you want to avoid the hassle of listing the inherited property on the open market, consider selling it directly to an investor like Leave the Key Homebuyers. They will make you an offer for the house and pay you in cash, so you don’t have to worry about showings or waiting for a buyer. While you won’t get as much money this way, it can be a good solution for those who want to sell their inherited house fast. Using an iBuyer can also be less expensive than hiring a full-service realtor to handle the estate sale.