In the upcoming future, a tremendous increase of inherited homes will hit the market. The individuals who receive these homes will be left with the complicated process of selling the house while also experiencing the grieving process.
The big question for this situation is: How do you sell an inherited house? Education is key during the process.
We have created a 5-part guide on how to navigate and insure your inherited home sale goes smoothly.
Step 1: Identify the Claimants: Who Has a Right to the Property?
When a homeowner passes away, their property is passed on to their heirs. Believe it or not, the process of finding out who has claim to the property after a death can be quite complicated. Hopefully, the decedent left a valid will behind as that will make the process much easier.
Without this will, a petition must be submitted to initiate proceedings in probate court. The distribution of the property will be determined by guidelines established by each state. This process involves many steps and can require a significant amount of paperwork.
In addition, how the decedent held title to their home comes into play. If the title deed to the property does not have a tenancy, such as joint tenancy with another owner, nor does it contain any other right of survivorship language, then it becomes cloudy as to who has a claim to the property in question.
The estate can also be designated to multiple heirs. This signifies joint ownership of the inheritance between more than one party. In this instance, the portion of the property received must be determined for each person involved. The individual shares can be kept or sold to other owners of the property. If you decide to sell your portion of the estate, the person purchasing your share can either take out a loan to cover the cost or negotiate a payment plan.
Remember, a property cannot be sold without clear title.
If a deceased individual has a lot of heirs, marriages, or pre-deceased heirs also without wills, this can create a complicated process. Heirs need to work together in these instances, and often times the more people involved, the more difficult it is to get everyone on the same page.
We know how complicated selling your inherited home can be throughout the course of the process. For this reason, we have working relationships with local attorneys and title companies so when the situation arises, we can help you navigate the possible turmoil. Our team has assisted many heirs in this very situation by helping them find answers to who has claims to the property and who can sell the property at the end of the day.
It is highly recommended to avoid going through this process alone. Working with an attorney or title company will ensure an effective and accurate process. We can help you complete the sale of your inherited home in Massachusetts. Many families of deceased loved ones have sold their home to us, eliminating a large amount of hassle in the process. We pay cash for inherited homes in Massachusetts and typically close on your home in 15 to 30 days, depending on the situation.
Step 2: Insure the Vacant Home
Maintaining the property is essential to the sale process. A house sitting vacant without proper maintenance can rapidly decline. To prevent this, it is helpful to designate an heir to care for the property. Managing a vacant property includes utility bills, real estate or property taxes, lawn care and a thorough clean out of the inherited home.
It is suggested that the family of the deceased homeowner obtains a vacant home insurance policy. A vacant home insurance policy will help protect the estate from any liabilities that the standard homeowner insurance will not cover. This is due to the increased risk of damage that could occur from decreased emergency response times and a greater likelihood for a break-in or vandalism.
For most policies, the home can remain unoccupied for up to 30 days before an additional plan is needed. Acquiring a specialized insurance policy will keep the vacant house protected from any unexpected events that might occur. Managing a decedent’s home can be overwhelming, however, it is an important task to maintain the vacant home.
Step 3: Know What Your Home is Worth
If you decide to sell your inherited home in Massachusetts, obtaining an appraisal will help you market the property and get a fair price. This process includes conducting a professional inspection of the home to estimate the overall value. The goal of an appraisal is not to determine the condition of the property, rather, it compares the home to the purchase prices of similar homes in the surrounding real estate market. This helps to lock down a reasonable listing price.
However, considering the alternative of selling your inherited Massachusetts home to a cash home buying company may be your best suited solution.
Top 5 Reasons Selling your Inherited Home to a Cash Investor is Ideal:
- Cash Offer
- Quick Closings
- Confidence Property Will Close
- Sell Property As-Is
- Ease and Convenience
Since we are both cash homebuyers and licensed Realtors in Massachusetts, we can help you navigate either option to come up with the best possible scenario that fits your needs.
Step 4: Prepare for Taxes
One way or another, you will have to pay taxes on your inherited home in Massachusetts. Typically, if you own your home for two to five years as your principal residence, you are excluded from paying taxes on your proceeds from the sale. However, in the case of an inherited home, you will not be able to avoid paying taxes on your proceeds. The only way to potentially bypass paying taxes on the sale proceeds is to make the house your principal residence for two years. With more than one heir, this situation can become much more complicated. That is why an inherited house is often immediately sold after the death of a loved one when there is more than one party involved.
However, there is some good news. Heirs who inherit a home and sell it benefit from a different tax structure. Normally, proceeds are calculated using the home’s actual purchase price along with improvements that were made to the home. But, with an inherited home, taxes are based on the fair market value at the time the owner passed away. Therefore, if the home has appreciated in value, the heirs are alleviated from paying taxes on the appreciated value from the initial purchase price.
Part 5: Much to Deal with When Selling an Inherited Home!
A variety of surprises can pop up during the sale of an inherited home. Emotions are running high, grief still exists and in complicated heir situations, you may end up dealing with more than you originally planned. Surprises can be waiting around the corner at any time during the process. For example, title issues may arise that you were not prepared for or aware of.
Here are some common title issues you may not be prepared for:
- Unknown Liens
- Illegal Deeds
- Missing or Unknown Heirs
- A Missing Will
- Errors in The Public Records
During this time, heirs are still coping with the loss of a loved one and dealing with any of these issues can be extremely stressful. In some instances, family secrets can come out such as unknown marriages, unknown children or previous deaths that no one was prepared for. It is possible the process of identifying the heirs and selling the home for a fair price in an inherited house sale will be simple and straightforward, but often times it is stressful and complicated.
Any debt owed by the deceased family member must be paid off using the profit from the sale of the house. After this has been taken care of, the heirs are able to receive the leftover proceeds. Outstanding debt could be due to a missed or late payment on the mortgage or property taxes. Whatever the reason for money owed, it must be paid before any heirs will receive their share.
So, if you inherit a house, you should start with asking yourself:
- Is there a will?
- Do you know your family tree?
- Are there any tax issues?
Not ready to navigate this process on your own? We are here to help.
If you inherited a house in Massachusetts and you want to sell, or just want to explore your options, feel free to reach out to us at no obligation. Our property solutions company is prepared to evaluate your inherited house, provide you with a fair cash offer and assist you every step of the way.