Selling an Inherited Estate? Do These 5 Things.

Historic Home REALTOR® Representing WV, VA + MD

Selling an inherited house can result in a substantial financial gain for heirs, but there are several items to take into consideration: are there any liens or debts, will you be required to pay capital gains tax, are all heirs in agreement, who will be the executor of the estate?

Below, we will discuss the top 5 items to keep in mind when selling an estate. Please note, the information provided in this blog is general information that just scratches the surface of selling an estate. Every situation will be different.

Determine ownership: When someone passes, everything they own becomes part of an estate. The legal transfer of their property, money, and other assets to a living heir or beneficiary may require court intervention called probate. During the probate process, the executor will handle all of the paperwork, settle debts, tax returns, and ensure the estate’s property and assets are successfully transferred to the appropriate beneficiaries. Depending on the complexity of the estate and cooperation among heirs, this process can take anywhere from a couple months to a couple years.

New ownership responsibilities: When someone inherits the house, title is transferred into their name(s) and they become legal owners taking on all responsibilities that come with home ownership including: inherited mortgage payments, taxes, property maintenance, etc. Federal law dictates the new owner will have to pay estate taxes on the transfer of the ownership of the property and, should they choose to sell, capitol taxes on the sale of the home after they close. By living in the home for 2-5 years, an individual or a couple could avoid capitol gains taxes.

Estate sale: Did the deceased leave behind a house full of personal items? Once items from the will/probate have been distributed accordingly, the remaining items are typically sold by means of an estate sale. The goal is to sell a large number of items within a short amount of time. An estate sale usually takes place in the home and has an average duration of 1-3 days. The company will market the sale, price items individually, display them in a way to create interest and smooth flow of traffic, discount items as they near the end of the sale, and remove all items that have not sold — leaving you with an empty home. The contract stipulates what happens with any remaining items — often donated to charities.

Appraisal: Selling an estate may require an appraisal to determine fair market value. While your real estate agent can provide you with a Comparative Market Analysis (CMA), it may be best to hire a professional appraiser to help price the property. This small investment will not only provide you with the most accurate value, it is a great negotiating tool should a buyer come in under the sales price. Make sure you ask your listing agent to provide the buyers appraiser with this document to help support your list price and prove value.

Reach out to me for more resources and contact your preferred real estate attorney for specific information about your particular situation.