Selling Inherited Property: Where to Start
Selling Inherited Property
Where to Start, and Who Can Help
The concept of property inheritance may seem daunting. Many of us would love to leave things behind for our loved ones, yet being on the receiving end can be overwhelming. Dealing with inherited property can be complicated. For many, the best solution is to sell the property, but that’s not always a straightforward route.
In the face of these challenges, more knowledge doesn’t hurt. In this article, we hope to help you understand what is needed in order to sell an inherited property, what to do, and where to start. If you do decide to sell, call We Buy Austin Houses to get a no-obligation cash offer on your home.
Execute the Will or Probate
Inheritance consists of property passing in ownership from one party to another. The way this plays out can depend on a variety of things. The new formal ownership must be established before the formal property can be sold.
If the inheritance is clearly laid out in a will, then the will can usually be followed. The will is executed, and ownership changes accordingly.
However, wills can be contested. In this case, the property cannot be legally sold until the contests are settled.
When there is no clear will, the property will likely go through a probate process. The specific rules governing probate (or a comparable process) vary by state, but commonly ownership is passed to the next of kin.
Although risky, it is possible to sell an inherited property without calculating taxes.
Inheritance taxes are very complicated. This is especially so when multiple people inherit a single property.
First, you are not federally taxed on a property unless it exceeds a minimum value or you liquidate it. If you were to inherit a house that is below the minimum, you may owe taxes when you sell.
When inherited property is sold, it is only taxed on profits made from the sale. For instance, if the house is purchased at $100,000 and sold for $200,000, you will only pay taxes on the $100,000 of profit from the sale.
Upon inheritance, the value of a property is assessed for tax purposes. A new value is assigned to the house using the day of the previous owner’s passing. That is reset as the “original” cost of the house, and you only pay taxes for sales proceeds above this new value.
For example, say a house was originally purchased for $100,000 some years ago. When it is reassessed, it is valued at $200,000. If you sell it for $200,000, you don’t owe any federal taxes on that sale. However, if you were to sell it for $250,000, you would only owe taxes on $50,000.
One of the most significant reasons to determine tax liabilities is the influence this will hold on whether or not an owner or executor wants to sell.
If a property has a new owner or sole beneficiary, the process is simple. They will decide whether or not they want to sell the house.
If there are multiple new owners or beneficiaries, all must to agree to sell. If this does not happen, no sale can be conducted. The sale of a house can be prevented by a single objector. Unanimous consent between all owners and beneficiaries of a given property is required in order to sell.
Sell the Property
Congratulations! If you have surpassed all the necessary obstacles, you can sell the property as you see fit. You could hire a realtor to liquidate the property, although this is often a long and troublesome process. An easier route? Selling to a cash home buyer. Cash home buyers offer cash for your property in a straightforward process that is fast and easy. This is especially helpful if the property is in a different town or state, or if you do not want to wait months to sell your home.
Looking to sell your house fast? We Buy Austin Houses specializes in just that. We buy homes in the Austin area for cash– in a streamlined process with no hassle, and a guaranteed sale. Contact us today, and get an offer with absolutely no commitment.