How To Sell Inherited Real Estate in Probate
In essence, probate is the legal process of assembling together the assets of the deceased, and then paying off all debts and taxes. Any remaining assets are distributed to the inheritors.
Some states have adopted the Uniform Probate Code (UPC), which simplifies the probate process and gives more flexibility to the executors of the estate. In UPC states, the probate process is mostly paperwork, and typically does not involve the court.
But if there is a disagreement between the heirs, the court may rule that the house must be sold so that the value can be distributed.
Next of Kin: What You Need to Do
The first step is to remember to take extra time. The passing of a loved one can bring on great emotional stress as well as financial issues.
Don’t overlook the emotional costs associated with putting a family member’s house on the market. Packing up personal belongings and cherished heirlooms is a fraught process.
When others are involved in making decisions, the situation can become complicated. Differing opinions on the selling price of the home – or whether to sell the house at all – can make an already difficult situation seem impossible.
It’s important to slow down and take extra time before making any big decisions.
Get Professional Advice
Laws vary from state to state, and sometimes from one city to the next. Consult with an estate planner or an attorney with professional knowledge about selling inherited real estate. There may be important legal or tax implications, including capital gains taxes on the sale of the property.
You will also want to talk to a real estate agent to get information about the local housing market. The property may be worth much more (or possibly, less) than you think.
Talk to a Real Estate Investor
Once you have a fast idea of the current value of the house, you should check repair and improvement costs.
Cleaning up the yard, painting the interior, and other quick fixes improve the curb appeal and help attract interested buyers.
If the house requires extensive renovations, don’t start spend money just yet. You could be better off seeking cash offers from real estate investors. They may be much more likely to purchase the home “as is.”
How to Get Ready to Sell an Inherited House
- Check to see whether there are any liens on the property.
- Check the status of the homeowner’s insurance on the property to make sure that it is current. Also make sure that the estate or trust is listed as the insured. That way, you are insured in case anything happens before you’re able to sell the house.
- Make sure that all mortgage payments are up to date, as well as property taxes and utility bills. The last thing you’ll want to deal with is a foreclosure notice or disconnected utilities.
- After you sell the house, you’ll have to pay off the remaining mortgage balance (if any), as well as real estate commissions, taxes, and all other closing costs.
These steps will help you avoid much of the stress and confusion that can come with selling an inherited house in probate.