After you inherit a home, most people will likely assume that you are happy about it. However, you may not be too thrilled about having a new property to maintain and paying taxes for the same. Even though selling a house when the owner has passed on is more complex than selling it when the owner is alive, you can still sell such a house without experiencing many problems. After deciding to sell a house you inherited, you need to take the following steps.
Go Through The Probate Process
Before you sell a house you inherited, it has to go through the probate process. You can opt for summary probate, which is expedited. It does not require legal processes and does not take much time. However, summary probate it is only available for people who need to sell homes whose values are a few hundred thousand dollars or less. If the inherited home exceeds this threshold, you should wait for the usual probate process to end before you advertise the house for sale. After the property goes through the probate process, the court will authorize you to act in any way you wish. If you are the will executor and some of your relatives share in the inheritance of the home, you need to get their permission and that of the court to sell it.
Agree To Sell
Once all the individuals involved in the inheritance agree that the home should be sold, you can file a petition with the court requesting it to allow you to sell the house and proceed from there. The inherited home that you need to sell may require repairs or remodeling before you advertise it on the property market. After taking out the belongings of your loved ones, you can hire an inspector to find out if there are any areas that need repairs. If you reside far away from the house, you can contact a real estate agent who lives close to where the home is located and ask him or her to assess it on your behalf and provide you with suggestions about any changes that can make it more marketable. Such changes can include adding landscaping or remodeling a kitchen or bathroom among other things. You may also chose to sell the property as is even if it means that you will sell it at a lower price than you would have if you made some improvements.
Consider How Much Tax You Have To Pay
If you choose to sell an inherited home, the tax basis for the home is the value it had on the date your parent or family member who drafted the will passed on. The difference between this value and the sale proceeds you get after selling the home is the gain on which you will pay taxes. However, if you sell the home for an amount less than or the same as the value it had on the date your parents or family member named you as the beneficiary, you do not have to pay taxes.
Selling An Inherited House That Is Held In A Trust
If the inherited home you need to sell is held in a trust, you need to work with the trustee in order to sell it. You can sell such a home it two ways. One of them is letting the trustee conduct the sale so that the proceeds will be owned by the trust. The other option is asking the trustee to transfer the title of the home to your name so that you can sell the house yourself. Since trusts are governed by complex legal documents, you should consult a lawyer to review your trust before you begin the process of selling the property.
Steps to take when selling a house with the trustee
- Read through the trust documents carefully and verify if the trustee is authorized to sell the home. The provision that grants a trustee the power to sell is usually included in the trust document. If power is not explicitly granted to the trustee, a court may conclude that the power is implied.
- Request the trustee to hire the services of a real estate agent. This professional will visit the property and also look at the trust documents to conform that the property can be sold. He or she will also consider if the trustee has the power to conduct the sale.
- Provide the title firm with proof that the trust is valid and that the trust document identifies the trustee. The title firm may also ask you to provide it with a Certification of Trust signed by a trust lawyer, a tax ID number and the death certificate of the person who created the trust.
- Close a buying agreement with the person who has agreed to buy the property. The trustee has to sign this agreement. The monies from the sale become the assets of the trust. The trustee can either transfer them to you or leave the funds in a trust account.
Steps to follow when selling a house without the trustee
- Read the trust documents to make sure that no provisions that can keep the trustee from transferring the title of the home to you exist. If there are no restrictions, the trustee can transfer the property to you.
- Request the trustee to transfer the property’s title to your name.
- Transfer the deed of trust for the property into your name with the trustee’s cooperation. The trustee is required to create a deed form that transfers the home from the trust to you. To make this deed official, the trustee will file it with the local property office.
- Hire the services of a real estate agent to sell the home. The sale proceeds will be yours because you hold the title to the home.
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