Selling inherited property can be challenging, especially if several good or bad memories are associated with that property. However, when financial difficulty strikes, a quick sale can provide much-needed relief. The steps detailed below can help sellers expedite the selling process — and ensure that property is sold at a desired rate.
Step by Step Guide to Selling an Inherited Property
1. Determine the financial implications of the sale
It is important to be prepared for any tax penalties or other financial consequences that may occur following the sale of an inherited property. While inherited properties do not qualify for home sale tax exclusion, they do elicit a stepped-up tax basis — the value at the time of the previous owner’s death. It is prudent to turn to an accountant or attorney for financial advice regarding these and other considerations.
2. Complete the probate process
Before inherited property can be sold, it will likely go through probate. During this process, the validity of the will is determined. The right attorney can greatly expedite probate while also settling any inheritance disputes that may arise between family members.
3. If needed, obtain a license to sell real estate
In many states, a license to sell is required for homes in probate, as well as for situations in which the original owner is incapacitated and has a guardian acting on his or her behalf.
4. Clean the home and hold an estate sale
Cleaning an inherited property can be an emotionally challenging process, but it also can bring about closure. An estate sale may help to cover any tax burden arising from the home’s eventual sale, as well as related attorney, accountant or agent fees.
5. Prepare for property inspection
Many inherited homes are left in disrepair, leaving the seller to take care of lingering foundation issues or broken pipes. A home inspector will scour every inch of the home, but it is better to take care of structural issues well before the inspection takes place.
6. Select a real estate agent
The ideal real estate agent is not a friend or family member, but rather, somebody with excellent referrals and plenty of experience selling inherited property.
7. Set a reasonable asking price
In all likelihood, the property will not be sold for the initial asking price. Knowing this, it can be tempting to set the asking price high to compensate for an eventual drop — but this will merely drive prospective buyers away.
8. Avoid accepting the first offer
If the first offer is made at the initial listing price, it is fine to accept, but otherwise, it is best to be patient and wait for a more reasonable counteroffer.
9. Complete closing paperwork
The selling process does not end after a reasonable offer is made and accepted. The final paperwork is often the most frustrating aspect of selling. Be prepared to provide the appraiser, buyer’s agent, and other associated professionals with building permits, insurance documents, and property records. Early organization can make this final step less burdensome.
The most successful inherited property sales take place when sellers surround themselves with trusted advisors capable of guiding them through every step of the process. Careful documentation is required, as is thorough cleaning and repair work for properties that have fallen into disrepair. A successful sale will make all of the hard work and accompanying emotional burden feel worthwhile.