If selling an inherited property is what’s on your mind, you might be surrounded by a bunch of questions – How to sell an inherited property? What are the legal requirements? What are the tax implications and so much more?
When you inherit a property, you have multiple options for how to proceed. You may decide to live in it, rent it out, or sell it. Emotionally, inheriting a property can be demanding, but it may even put a financial strain on you. If you feel that the obligation of inheriting property is huge for you, the best way out is to sell it.
However, selling an inherited property can be complex and take longer, especially if it goes through a probate process. Yet, once you know which hurdles you need to cross, the process of sale or transfer can become relatively easier to navigate.
So, let us help you with what you must be aware of before you even jump into the selling process.
When Can You Sell An Inherited Property?
You can only sell an inherited property if you already have its ownership. Considering this, the following are the ways of owning a property through inheritance.
1. Probate
In New York, almost every inherited property has to go through the probate process. Probate involves the court which determines the legal owner of the inherited property.
During the probate, you must provide the owner’s death certificate and ownership documentation. Through this process, the court also ensures that the outstanding debts of the deceased are settled before transferring the property to the inheritor or inheritors.
Probate proceedings can be costly and time-consuming, it can even take up to 12 months. Once you inherit the property under probate, you can sell it.
2. Joint Ownership
When you and another person own property jointly and that ownership includes the “right of survivorship,” the surviving owner will take over ownership of the property upon the death of the other owner. Although it will require some documentation to demonstrate that title to the property is held exclusively by the surviving owner, no probate will be required to transfer the property.
3. Transfer-on-Death Deed
A transfer-on-death deed helps the executor manage the property owner’s assets after death by automatically transferring property to a designated beneficiary upon the owner’s death without the need for probate.
If you inherit the property through such a deed, you get the right to sell it.
Please note that New York doesn’t allow real estate to get transferred through this method. However, if one doesn’t live in a state that allows TOD deeds, but owns property in such a state, they might still be able to use a TOD deed — but it is advisable to check with an estate lawyer first.
4. Living Trust
A living trust is a legal arrangement that is drawn up by an individual while they are still alive. It names a trustee and lays out clear guidelines for how assets will be distributed upon the grantor’s death.
If you become the inheritor through this method you can benefit from the sale of the inherited property.
What To Consider Before Selling An Inherited Property?
An inherited property is not like a property that you directly get ownership of. That is why the process of selling one can be quite complicated. There are certain factors that you must look at before you decide to sell the inherited property, such as the following:
1. Value Of The Property
Before you look into anything else, first research the fair market value of the inherited property. Compare it with other properties in its vicinity to accomplish this task.
Alternatively, you can use online value estimation tools. Despite the estimated value that you get, remember that several factors can directly affect the property’s value such as the condition of the property.
2. Outstanding Mortgage
Reach out to the mortgage company if there is an outstanding mortgage on the inherited property to determine the required payment amount. This is how you can get to know how much you might earn after selling the property.
3. Debts If Any
Settle any outstanding debts, such as unpaid bills or taxes, for which the deceased person was responsible before proceeding. This way you get an idea of whether the selling of the inherited property would only go to paying the debts.
4. Agreement Of All Inheritors
It might be possible that you are not the only inheritor, but multiple persons/family members are inheriting the property.
In such a case, you must see that all the inheritors agree to sell the property. This will ensure that you have a smooth selling process without any potential conflict.
Tax Obligations
There is no inheritance tax in the state of New York. However, if the value of your property exceeds $6.58 million, you will have to pay an estate tax ranging from 3.06% to 16%.
Moreover, when you sell the inherited property, you must fulfill tax obligations including payment of transfer tax, property tax, and capital gains tax.
How To Sell An Inherited Property?
Selling an inherited property is really no different than selling any other property. You can sell it on the open market for the most profit either through a real estate agent or sell it yourself.
Also, you can sell it directly to a cash buyer without making any repairs or changes. You can move quickly and get cash for the property without needing to make large upfront investments if you sell it as-is.
Elite Properties is a real estate company that will buy your property “as-is,” with no costs or commissions! You receive the greatest cash offer and we also pay for all closing and legal fees. No open houses or showings, and a speedy three-day closing!
The Final Say
Selling an inherited property can be overwhelming with all the legal processes that you need to go through. So, if you want to sell your inherited property with lightning speed, we are just a click ahead, contact us!