How to get the Best Price for an Inherited Family Home?
- December 30, 2022
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- Local House Guide
- Posted in Guides
Your newly inherited home may stir a ton of memories- good and not so good. Now that it has been passed down to you, you can do only three things- move into it, rent it, or sell it. In case you decide not to move into it or rent it, you will need some guidelines to steer clear of obstacles that you can encounter during the sale of your inherited family home.
How to sell an Inherited Family Home in Tulsa?
- Check the will again: Although you have inherited the house, the will may also list people who have co-inherited it with you. The will also set out the names of people responsible for the estate distribution, also called the ‘executors’ or ‘personal representatives’. Contact all the people mentioned in the will and inform them of their fair share and duties. In the event of multiple beneficiaries of the inherited home, mutual consent will be required to sell the house. However, sometimes members may reach divided opinions instead. Here is what you can do:
- You can buy the shares from all heirs and sell the property.
- You can rent the property can split the landlord duties among the heirs.
- You can hire a mediator to reach a consensus and eventually sell the property giving each member their fair share of the sale.
- You can ask the court to sell the property for you if nothing else works and split the proceeds. This route takes considerable time, effort, and money.
- The Probate Process: The inherited family home has to pass through a series of legal processes to be transferred to you. The right to go apply the processes is called probate. The property executor will need to obtain probate if there is a will. However, if there was no will left, the property would be ‘intestate’ and go to the next of kin. The determination of next of kin is based on laws of inheritance prevailing in Tulsa, Oklahoma. Unless there is a living spouse, the kinship hierarchy may not be obvious, and you may require legal counsel to verify it.
- Determine the property‘s value: Many online tools will help you estimate the worth of your inherited property. The actual selling price of your house will depend on the condition of the house and the local housing market at that time. Check for mortgage payments, bills, and taxes that may be outstanding on the property. All liens, outstanding bills, and taxes must be cleared before making a sale. However, mortgage payments can be adjusted from the sale proceeds. If you have co-inherited the house, the final settlement may need to be set out upfront to make the sale process go smoothly, giving each person their fair share.
- Prepare the property: The best thing you can do before selling is to make your property look sparkly clean no matter what! You and your neighbor probably have different ideas about interior design. You may like a minimalist approach with a rustic look or even try something truly French- but it will not necessarily win you exotic buyers. However, overdoing renovations can cost you money and time.
Look to make some basic changes:
- Clear out all personal belongings. Organize all the items in the house into three neat piles: to giveaway, to discard, to sell. Invite your family members over so they can take away whatever they want to keep as memories from the house.
- Hold a garage sale. Once your cherished belongings are given away, contact an estate sale specialist who can help you price the ‘to sell’ pile.
- Wait for the probate process to complete. The process proves the legality of the will.
- Price your property right. Once you have determined the property’s value, work with a real estate agent to price your property. Expect to not receive what you are asking, so the price is slightly higher than what you are willing to settle for. Do not accept the first offer you receive in haste to sell. Educating yourself on negotiation tactics will also pay you off in the long run, especially when you have to make the right counter-offers. You will know how to avoid an offer when the buyer doesn’t meet your expectations.
Sell the property:
- Once your property is prepped and primed, you can sell it. You can do it any of the three ways:
- Via traditional estate agents. This route gets you the best and highest price. However, this process can take months to complete. Multiple people will view your house, and there is generally a long paper trail for you to fill and maintain.
- Via an auction. You will not know the final selling price, which can be very high or very low on the day of the auction. It can take weeks to prep for the auction process. However, your buyers will need to look around before offering their prices during the auction.
- Via cash buyers. Selling to cash buyers takes the shortest possible time. However, you only get 80%-85% of the market price. The cash buyers don’t need detailed viewing of the house, and the process is completed in 2 weeks maximum. All costs are covered by the cash buyers.
Considerations to keep in mind while selling
When you sell an inherited house, certain states impose taxes that need to be settled. Tax law can become a minefield. It is always advisable to consult with a tax lawyer when dealing with taxes on inherited properties.
- Capital Gains Tax: Capital Gains Tax is a tax payable on your earnings from the sale of the property. The property will be apprised to its current value after probate to create a new basis for calculating the capital gains tax. For example, D bought a property in 2004 for $30,000. In 2020, this property was passed on to B as D died. At that time, the value after probate was $200,000. B sold the property in 2022 for $225,000. B will be taxed on $25,000 only.
- Inheritance Taxes: Inheritance tax is levied on inherited property and differs by state. Tulsa doesn’t collect inheritance taxes. However, if you have inherited a property in any other state, you can receive a tax bill in Tulsa, which will be based on the value of the inherited property. Surviving spouses are exempt from such taxes.
- Other taxes: Home sales tax exclusion applies to people who have lived for up to 2 years in a house before selling it. Unless you plan to live in the house for that long, you may not be able to avail of this tax exclusion.
Inheriting a home can come at a tough time- especially one that you may not be ready to deal with. However, knowing what can lie ahead and entrusting professionals can make this process easier.
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