Inheriting valuable properties from a deceased loved one can be financially advantageous. However, converting the properties into cash can be an overwhelming and lengthy process involving taxes, legal paperwork, and the associated emotions. So if you have recently inherited property and have been asking yourself, how can I sell my house in Kansas City, for instance, then this article is for you.
Connecting with a real estate agent and an attorney can be beneficial if you want to sell inherited property. A real estate attorney ensures that the property is legally transferred to you, while a real estate agent will ensure you get the most out of the sale. That said, here is a guide on how to sell an inherited property.
Probate the Property
Probate is a legal process to transfer an asset from a deceased person to the next of kin. The process can take nine to twenty months as the court will need to validate the deceased person’s will. Probate law can be complex, time-consuming, and sometimes costly. However, probate is not required if:
- The property is in a trust, and the original trustee took it over after the owner passed away.
- If the property is co-owned.
- If the deceased had a beneficiary deed to transfer the ownership after their death.
Pay Outstanding Bills
Selling an inherited property comes with various costs, and these fees can quickly rack up. Here are some of the prices to consider.
- Property Insurance. Have the property insured as soon as possible.
- Inherited Mortgage. Sell right away to cover up the mortgage or any equity in the property.
- Utility Bills. To avoid incurring large utility bills, call the providers to get up-to-date meter readings.
- Inheritance Tax. Clear the tax owed by the inherited property.
Preparing the Property for Sale
You need to prepare the house for viewings. This usually involves tidying up the house and doing any needed repairs. Remember that people have different tastes in interior design, and you will not please everyone during the house shows. You could ask for help from your real estate agent on how to prepare the house to increase its value.
Selling the House
There are several options you can use when you are selling an inherited property. You can sell it through an auction, by contracting a real estate agent, or by selling it to a house-buying company. However, a real estate agent comes highly recommended if you want to get the best price possible. This is because real estate agents will be able to market the property to more buyers and negotiate with the buyers to get the highest price. If you don’t know any real estate agents, get a recommendation from a friend or do a simple Google search.
Paying for Capital Gains Tax
Capital gain tax is considered if you sell the inherited property for more than the estimated value from when the property was valued for inheritance tax. The capital gain tax varies depending on whether you are a basic rate income taxpayer or a higher rate taxpayer. However, one can be excluded on CGT if you move in on the inherited house, use it as a primary residence, and sell it later. You can also avoid paying CGT if you sell the property quickly. This is because the property value can increase drastically after it has been transferred to you.
Conclusion
Once you have inherited a property from a deceased loved one and want to sell it, consult with the relevant experts, including an attorney or a real estate agent. Property laws can be complicated, and it can take months to years before turning the inherited property into cash. However, with the right expertise at your side, the process can run smoothly and much faster.
