How to Sell An Inherited Home In 2020
If you have recently had someone in your family pass, then you surely understand the heavy responsibilities that come with it. In many cases, family members inherit homes from lost loved ones. If you are one of those people, there are plenty of things to take into account.
Let’s look at your options.
Can I Sell My Inherited Home?
More often than not, the benefactors of the property will decide how to sell the home and split the profits. Doing so does not come without additional costs. Beyond normal repairs, one must consider the payment of property taxes, even if no one is living in the home, as well as insurance, electricity, heating, and more.
If you have already found that you have the ability to sell your inherited home and it is your best option, here are a few considerations you must make:
Home Transfer Status
When someone transfers an inherited home, it typically happens in one of three ways:
- Living Trust: This favored scenario allows for a seamless transition without any taxes involved.
- Death Deed Transfer: If your loved one made a transfer on the death or beneficiary deed, you can likely sell your home.
- Probate: Probate typically happens when your passed loved one has not left a legal will. The courts will usually decide on the best interests of your loved one in this case. These transactions can sometimes take as long as two years depending on the complexity of the decision.
Look Into the Tax Implications
While we are not tax professionals by any means, here is a general overview of what the tax might look like during inheritance.
- Capital Gains Tax: This type of tax isn’t always simple. You might be on the hook for capital gains tax if you inherit a property that is worth more than the basis of the property. If you receive a home in poor condition and update it before selling, this could be taxable income in the eyes of the IRS.
- Estate Tax: Estate tax is a tax on your right to transfer property.
- Property Tax: You must pay property tax on a home, even if you inherit it. You will also need to pay back taxes on the home if it went unpaid during the years prior.
Figure Out Who The Personal Representative Is
The personal representative is typically appointed by the court. This person will have plenty of duties, including the need to notify and pay creditors before the inheritance can go through.
A personal representative should be someone who is organized and has the knowledge to pay off the necessary accounts, including:
- Primary Mortgage
- Secondary Mortgage
- Checking and Savings Accounts
- Income and Retirements Accounts
- Property Taxes
- Medical Bills
- Insurance Policies
- Credit Card Statements
- Household Services
Beyond all of this, you must civilly address any disagreements between the remaining family, update the homeowner policy, prepared the home for sale, and decide how you want to sell the home. We discuss many of these things in our blog.
Make sure to get in contact with us here at National Cash Offer if you’re looking for an easy way to sell your home.