If you inherited a house and you don’t want it, there are several things that must be done before you can sell it. However, they’re easy to do and pretty straightforward.
What is probate process?
The process of administering a deceased’s estate can be referred to as “probate.” The probate court supervises the executor or executrix’s handling of the inherited property. As part of that, all creditors must be paid off first. There is also an inheritance tax where applicable, which must be paid by the beneficiaries to the government for inherited properties worth more than $100k.
How to find historical fair market value of home?
When inheriting a house and selling it, one of the first things to do is to determine what your inherited property’s worth. You can check it out through online or public records.
There are also certain requirements you have to meet before selling an inherited house. For instance, if it has been inherited within the last three years and the inheritor plans to sell it immediately after inherited, then it’s tax-exempt. But if inherited and inherited before and plans to hold the property for at least a year, then they would have to pay taxes on the capital gains.
Are inherited homes sold at market value?
Yes! In fact, most inherited homes go for less than their fair market value. An inherited house is often thought of as something undesirable so bidders tend to stay away from them leaving them for the taking for anyone who does want it.
When inherited homes are sold, they’re often sold at below market value. For example, if you inherited a four-bedroom house in good condition with appliances and furnishings but there is some cosmetic work that needs to be done then the inherited house could be sold for much less than if you had inherited a property in perfect condition. That said, make sure you do your research beforehand so you know what price range to put on your inherited home!
Estate sale vs inherited home sale
If you inherited a property and there are other inherited properties in the mix, then it’s likely best to put them all up for auction under an estate sale. If you inherit a house and want to sell it right away, be sure to let potential buyers know that so they can factor that into their bid price. Keep in mind: inherited houses often go for less than market value so don’t think your inherited property is worth more than it really is and don’t be surprised if no one bids on it! An Estate sale company can help to price inherited houses at a fair market value, as well as handle the probate court process for you. Estate taxes must be paid by the beneficiaries to the government for inherited properties worth more than $100k.
Call Now (818) 651-8166
Why Sell Your Home to ASAP Cash Offer?
- You Pay Zero Fees
- Close quickly 7-28 days.
- Guaranteed Offer, no waiting.
- No repairs required, sell “AS IS”
- No appraisals or delays.
Stepped-up Tax Basis
A “stepped-up tax basis” means that inherited property is sold at market value for determining capital gains or losses from the sale. This is the opposite of how it was before this rule went into effect in 1999 – the inherited property would be sold at what was paid for it (the tax basis) which could end up being significantly below market value if the inherited house has gone up considerably in value since then.
Property tax
Property tax assessments and payments for inherited properties are based on market value, not what was paid to acquire the inherited property.
Property taxes are based on the inherited property’s current market value. Inherited homes are sold at market value, not at their inherited tax basis. This applies to both real estate and inherited from a loved one as well as inherited property from a family member or friend.
Capital gains tax
Capital gains tax rates on inherited homes are lower than those for inherited stocks and other assets. Under current laws, if the inherited property is held for less than six months before selling then capital gains tax would be at the same rate as income tax (your marginal rate). If the inherited house was held for more than a year then capital gains would be taxed at just 15% or 20% depending on your total taxable income that year.
When inherited properties sell, capital gain may not be subject to both state and federal income tax since there’s no double taxation like with inherited stocks and other assets. Pay capital gains taxes on inherited property at a lower rate than on inherited stocks and other investments.
Estate tax
As of 2018, inherited property amounting to $11.18 million or less has no estate tax obligation. The federal estate tax applies to the inherited property above that amount. A federal estate tax is levied at 40% of the inherited property’s value over the lifetime exclusion amount.
Inheritance tax
Inheritance tax is a federal tax on inherited property. This taxation only comes into play if you inherited an amount of value that’s more than the inheritance-exclusion amount of $11.2 million as of 2018. Inherited property taxes are levied against inherited houses and other inherited properties, not inherited stocks or other assets which have their own separate capital gains taxes.
You decided to sell the inherited home, now what?
Once you decide you want to sell your inherited house, the first thing that needs to happen is getting an appraisal. You can check with a realtor or ask a family friend who’s a contractor or electrician. Anyone who has had some experience dealing with inherited homes will understand how important it is to have one done and be willing to help out for free.
Then, write up a “For Sale” sign and put it on the front lawn along with any information as to why you’re selling inherited property (i.e., inherited the home from a late uncle) and what the inherited property tax basis was.
Lastly, post those signs on classified websites such as Craigslist where someone looking for inherited homes may end up coming across them and making contact.
Call Now (818) 651-8166
Why Sell Your Home to ASAP Cash Offer?
- You Pay Zero Fees
- Close quickly 7-28 days.
- Guaranteed Offer, no waiting.
- No repairs required, sell “AS IS”
- No appraisals or delays.
Do I need a real estate agent?
Real estate agents are likely to charge a commission on top of what you’re paying for the inherited home. This means you need to make sure the inherited property sale price and after-commission inherited home sale make sense before hiring a real estate agent. Real estate transaction costs are typically 6% of the inherited home sales price so be sure you have enough cash to cover them so they don’t eat into your inherited property.
You may be able to avoid paying a commission since inherited homes tend to go for less than market value, but depending on who wants your inherited house this might not always be the case. Make sure to get multiple offers (i.e., showings) if you’re considering waiving that commission fee since not everyone looking at inherited homes will want them even if they’re reasonable in price. Real estate agents charge that much. It would be much better to sell it your own and find cash buyers.
Don’t forget to include:
– a geographic area of the inherited house for sale
– any other relevant keywords related to the topic
– anything else you think people should know
Want to sell inherited houses fast?
The best way to sell an inherited home is through direct contact with shorters or cash buyers. These are professionals who pay cash for properties that other people don’t want anymore. accept inherited properties as well as inherited houses since they are in no position to go through the long, drawn-out process of applying for a mortgage. All cash offers can be made on inherited homes immediately and without any kind of inspection which is why inherited properties are very desirable with buyers who make cash offers.
If you’re a homeowner looking to sell your house fast and need cash in exchange, ASAP Cash Offer can most definitely help you! We purchase and will pay cash to homeowners whatever the current market conditions would be. This can be beneficial if you don’t want to bother with the repair costs waive inspection altogether, or just want out of your current situation as soon as possible. Just Fill up the form below, or call us at (818) 651-8166 and you will receive a fair cash offer for your home within 24 hours, with no hidden fees in the deal or closing costs like listing with the realtors!
