Did you receive inherited real estate from a loved one? If so, you may or may not be interested in keeping it. Selling inherited property requires a bit of work, and there are some specific things you should do to make sure you do it correctly.
Here are some ways to avoid making mistakes while selling inherited real estate:
Know the Actual Value of the Property
Do some detailed analysis about the exact worth of the home before you jump into selling an inherited house. It may be worth more than you know.
Don’t depend on the initial assessment of the estate given through the estate. The accurate or up-to-date market valuation probably doesn’t reflect accurately.
Get in contact with a real estate agent who can provide the current value. Inevitably, this could help you make a decision on whether or not to keep it.
Go Through the Waiting Period
You never want to rush into selling inherited property as soon as your loved one passes away. When the home is just getting into your possession, you don’t know much about the property. Even if it’s something that you don’t want, give it some time.
Some states actually impose a mandatory 3-month waiting period before inherited real estate can be sold. During that time, partner with an attorney and a realtor to come up with the best strategy for getting rid of the property.
Steer Clear of Bad Realtors
As you’re waiting, try to avoid as many mistakes as possible. Take that time to learn about what you’re actually doing and beware of ill-intended real estate investors. Some real estate buyers go after new property owners because they assume they don’t know much about the true value of the inherited home.
Whether you know the property’s value or not, you never want to get the short end of the stick.
However, if you rush into getting rid of the inherited house or the inherited land, you could end up with a bad deal. Slow down, do proper research, and partner with an experienced lawyer and a trustworthy real estate agent.
Decide If You Should Sell or Rent
Even if you don’t want a particular piece of real estate, selling inherited property may not always be the best option. You might be able to make a better profit by renting instead. If it’s a house, you could always rent out the rooms or turn it into a bed and breakfast.
Also. renting is a way to pay respects to your deceased loved one by keeping the property. If you turn it into a business, the property is something that you can continue to pass down and keep in your family line.
Never Sell Inheritance Real Estate by Yourself
To piggyback off of the previous tip, you never want to sell inherited land or property by yourself. Sure, it’s best to avoid real estate investors who don’t have your best interests at heart, but this isn’t a process you want to embark on by yourself.
An experienced realtor will know how to handle the situation, and they can handle the bulk of the transaction for you. This is especially helpful if you live in a different city than where the property is located.
Think About Selling the Property As-Is
Another one of the strategies of selling inherited property is selling it “as-is” to an investor. If you really don’t want the inherited real estate and you want to get rid of it quickly, you can always sell it to an investor as-is without having to deal with the hassle of fixing it up.
In this situation, you can take what you want from the home, then sell the rest.
Many companies buy houses for cash, which makes the process of selling inherited property super easy.
Renovate the Property and Flip It
If you don’t want to sell the property as-is, you can always renovate it and flip it. If you get an inherited house that’s in poor condition, but it has good potential, this is a chance to really make a profit.
This is especially true if the renovation costs are reasonably affordable.
Consider the Tax Implications
Selling your inherited property isn’t always cut and dry. The IRS enforces taxes on the profits from the sale of an inherited property. However, the laws concerning this matter vary from state to state. The cost for state taxes and inherited taxes also varies.
But overall, there are standard rules across the board regarding selling inherited real estate. In this instance, you’ll need an accountant and a lawyer to help you through the process.
Maintain the Home During the Selling Process
Selling inherited property might take a while. During the sales process, you want to make sure that you keep the property up. Maintain the lawn, keep the utilities on, continue to pay the insurance, and maintain the internal upkeep.
You want to make sure that the property looks presentable whenever a potential buyer comes to see it. Not only that, but you don’t want to create other issues that could arise during the selling process because you didn’t stay on top of maintenance.
Selling Inherited Property the Right Way
There is a lot that goes into selling inherited property, but if you do things the right way, the process should go smoothly. By implementing the steps listed above, you can make sure that you not only have a streamlined transaction, but also turn a profit.
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