How To Sell an Inherited House
Selling an inherited house
Who owns the house? That seems like a simple question, but after the house’s original owner passes away, finding out to whom the property belongs to can be more complicated than family and friends would like.
Even after you establish who owns the property, selling an inherited house might still be more work than you would face when selling a house you bought on your own.
There might be multiple owners who have to agree to any sale. Or the sale may incur capital gains taxes.
The bottom line is there are a few important questions and quite a bit of paperwork that come with selling an inherited house, and most people don’t know how to deal with it right away.
Here’s some information that can get you started on navigating the legal system and deciding the best thing to do with an inheritance.
Identify the new owners
After a loved one dies, it's never fun to be the person who asks questions like “Who gets the house?” But someone has to do it.
The faster a family and their friends establish ownership of a home left behind by a loved one, the easier it will be to deal with the property.
The legal system provides a deceased homeowner's heirs with a few paths to take ownership of a house.
Depending on your situation, it may be advisable to consult an attorney to determine which circumstances apply to you and what your next move should be.
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Joint Tenancy – In cases of joint tenancy, two or more parties own a property. According to Investopedia, joint tenancies can be created between almost anyone: married and non-married couples, friends, relatives, and business associates. If one tenant survives another, the deceased tenant's ownership passes to the survivor without going through the court system.
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Trust –A living trust is a legal arrangement allowing individuals to protect their assets by directing how they want them passed on after death. Typically, a house under trust does not have to go through probate, but fees and taxes may still apply.
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Will – A will is one of the most common legal documents people use to direct how their property should be distributed after their deaths. If a deceased friend or relative outlines who they want to take ownership of their house in a will, there most likely won't be any legal conflict or questions to answer regarding who the new owner will be.
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Probate – Whether or not you have a will, estates often go through probate. Probate is a legal process determining what will be done with a person's assets after death. It is notorious for lasting longer than heirs of property would like. Typically, you can expect to wait anywhere from a few weeks to a few months for probate to clear. It could take even longer. Probate laws vary across states, so you should research the laws specific to Georgia. You won't be able to sell an inherited house until the property clears probate.
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Intestate succession – when an owner makes no provision for the transfer of ownership of property by a will or other means, it is classified as intestate and must go through probate, which can be a long and difficult process.
Taxes on an inherited house
Nobody likes to pay taxes, especially on a property you just inherited from a loved one. But that doesn't change the fact certain states tax a property before it is passed on to heirs.
Luckily for you, Georgia does not have an inheritance tax. But if you want to sell an inherited house, you may have to pay another type of tax.
Capital gains taxes can be assessed when you sell an inherited house for a higher price than the current appraised value. It doesn't matter how much the deceased owner paid for the house.
On the bright side, if you sell your inherited house for less than market value, you can deduct a percentage of the difference from your taxes.
Agree to sell the inherited house
Sometimes a house won't be inherited by just one person. Some homeowners decide to pass their houses down to multiple parties.
That means once ownership of the home is settled, you'll have to agree with the rest of the heirs if you want to sell the house.
One heir may want to live in the house, someone may want to rent it out, and the others may want to sell it.
Sometimes these disagreements can lead to a court dispute, but there are other ways to settle the issue.
For example, the heir who wants to live in the house can buy the others' property shares.
The heirs can hire a mediator or ask a family attorney to help them find a resolution. Whichever route is chosen, all the heirs must agree before selling an inherited house.
Sell your inherited house fast!
Inherited houses often need a bit of work before they can be sold for maximum value.
If you don't want to make repairs or invest a lot of time and money into getting a house you inherited ready for sale, consider selling it to HomeVestors®.
We pride ourselves in being able to buy houses fast, with no hassle and no fuss. You can get a convenient house sale when you call your local HomeVestors at 866-200-6475 and ask about selling an inherited house.
Learn more about selling your inherited house to HomeVestors in Atlanta, Georgia.