Inheriting a home from a loved one can be an unexpected blessing for some people and an unanticipated inconvenience for others. But no matter which of those categories you fall into, you essentially have three options: move into the house, rent the place out, or sell the home.
If you already own a home you love and aren’t thrilled with the idea of taking on landlord duties, selling the house is likely your best option. But navigating the sale of inherited property can be challenging, and if you’ve never done it before, it’s all too easy to make costly mistakes. At We Buy Houses Birmingham, we’re here to help.
Below, we’re sharing a brief guide on selling inherited property, so you can get an idea of what to expect.
Check the Property’s Mortgage Status
First things first, you’ll want to figure out whether or not the home still has a mortgage. To do this, you can search for the title to find out if there are any liens or judgments associated with the property, such as back taxes, a reverse mortgage, or an equity line of credit.
If there’s still a mortgage, the lender will expect those payments to be made on time, regardless of who has ownership of the property. If the previous owner was behind on payments, you’ll want to bring the account current as promptly as possible to avoid pre-foreclosure.
Find Out When You’ll Take Ownership
You can inherit a house through a few different avenues: a living trust, probate inheritance, or a beneficiary deed. The manner in which you inherit the property determines when you’ll actually take ownership of it, so if you’re looking to sell, you must determine your ownership timeline. Here’s what you should know:
- If you inherited the house through a living trust, the inheritance does not require court approval, so you can move forward with the sale immediately or whenever you’re ready.
- If you got the house through probate inheritance, you’ll need to wait up to six months to take full ownership.
- If you inherited the property via a beneficiary deed, you’ll first want to check in with your attorney to see if the deed was valid and recorded appropriately. If it is indeed valid, you must file a preliminary change of ownership within 150 days of the death date of the original owner. After you file, the property will pass into your name.
To get an estimated timeline, consult with your attorney regarding the probate process and when it will conclude.
Identify Heirs and Choose a Representative
Are you the only named heir? Or are there others? Do you currently know? If not, you’ll want to find out as promptly as possible. Once you’ve determined who the other heirs are, you’ll need to name an executor or representative. That person will be the only individual who’s legally authorized to make decisions about selling the property.
If you’re the only heir and were appointed the executor, you don’t need to worry about this step.
Create an Estate Account
You’ll want to open an estate account to manage the deceased person’s assets, which will include any profit from the sale of the home. Use this account to pay the mortgage (if there is one), as well as property taxes, probate-related expenses, and any other ongoing expenses that are still under the deceased individual’s name.
After you pay off any remaining debt on the estate, you’ll then distribute any remaining funds between all heirs (if applicable). You’ll also need to file a final accounting of the estate before you close the estate account.
Declutter and Clean the Place
Chances are the previous owner of the home left lots of stuff behind, and chances are plenty of that stuff is still inside the home. You’ll need to clear all that clutter out if you’re planning to sell through an agent. You can hold an estate sale if you’d like to make some extra cash or sell items individually on online marketplaces like Facebook, OfferUp, or Craigslist. Alternatively, you can simply hire a team to clear everything out if you’re not up for the hassle.
Hire a Realtor Who Does Probate
If you want to get the highest offer possible — and you’re willing to wait several weeks, months, or even years to close the sale — you’re likely considering selling the house on the open real estate market. If you take that route, you’ll want to partner with an agent who has probate sale experience because a realtor who’s worked in probate sales will be able to net you the most equity possible.
Sell the House for Cash
If you’re not keen on waiting around for interested buyers, paying pricey realtor commissions, or repairing any damage to the property before you sell, you may want to consider selling to a cash home buyer.
A cash home buyer can help you sell your house fast (typically within a couple of weeks) and will pay you cash at closing. They won’t require you to make any repairs or renovations before they’ll buy the place, nor will they tack on closing costs or transaction fees that can eat into your profits.
Determine If You Can Claim Tax Exclusions
Last but certainly not least, you’ll want to figure out whether you can claim any exclusions on your taxes since you must report profit from the sale of the home as taxable income. Tax requirements on sales of inherited properties do vary from state to state, so it’s in your best interest to consult with an attorney to make sure you don’t make any costly mistakes.
Need to Sell Your House Fast? We Buy Houses Throughout the Birmingham Metro
If you recently inherited a property you’re looking to sell quickly, don’t hesitate to get in touch with our team at We Buy Houses Birmingham. We purchase homes regardless of their condition and will pay you cash for your home as-is. To get a no-obligation offer or learn more about our process, feel free to give us a call today at (702) 850-8001 or contact us online, and we’ll reach out with additional info.