THE PROCESS OF SELLING INHERITED HOMES
Published by Authorify Publishing Copyright © 2019 Authorify Publishing
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. DISCLAIMER AND/OR LEGAL NOTICES: While all attempts have been made to verify information provided in this publication, neither the Author nor the Publisher assumes any responsibility for errors, inaccuracies, or omissions. Any slights of people or organizations are unintentional. This publication is not intended for use as a source of legal or accounting advice. The Publisher wants to stress that the information contained herein may be subject to varying state and/ or local laws or regulations. The reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, including advertising and all other aspects of doing business in the United States or any other jurisdiction is the sole responsibility of the reader. The Author and publisher assume no responsibility or liability whatsoever on behalf of any reader of these materials. If your property is currently listed with a Realtor, please disregard this notice. It is not our intention to solicit the offerings of other brokers. Printed in the United States of America
Table Of Contents
1. Dealing With Inherited Homes: Best Practices For Families 2. Concepts To Know When Selling An Inherited Home
12 3. Distribution Among Family Members 24 4. Downsides To Inheriting 32 5. How Selling A House In An Estate Differs From Regular Home Sales 38 6. Determining The Value Of An Inherited Home 44 7. Four Ways To Sell Your Inherited House 50 8. Inherited Home Sales & Taxes 68 9. Prepping An Older Home For Sale 74 10. Small Improvements Can Gain You Thousands 84
11. Marketing An Inherited Home
12. Using Curb Appeal To Sell Your Inherited Home For More
13. The Importance Of Good Pictures
14. The Process Of Selling Inherited Homes
When I first ventured into the real estate industry years ago, I did so with the hopes of helping sellers like you avoid the headaches often associated with the home-selling process. In my years of experience, not only have I helped alleviate the stress of selling for numerous clients, but I’ve also accumulated years of knowledge to help them get more money for their homes in the least amount of time. I decided to share all of my expertise in one place with potential clients. And that’s why you’re receiving this book. I want to help you have the best possible home-selling experience. And by that, I mean I want you to 1. Get the most money possible for your home, 2. Sell in the least amount of time, and 3. Avoid the headaches most commonly associated with the home-selling process. Think of this book as my gift to you. It contains insider advice on the home-selling process to help you achieve your ultimate real estate goals, including: • Secret strategies to sell your home for more money • Marketing techniques employed by top agents • Advice on how to appeal to today’s buyers • And much, much more If, after reading through it, you want to hire me to help you sell your home, I’d be more than happy to meet with you to discuss a specific plan to sell your home. Happy reading!
AGENT was raised in CITY with X siblings. As a child, AGENT had aspirations of being a OCCUPATION. Never in a million years did he think he’d stumble into the real estate industry, but you can’t always predict where or when you’ll discover what you’re meant to do in life. AGENT was taught at a young age that if you want something in life, you have to work for it. So that’s what he did. And he worked hard. As the years went by, AGENT worked his way from FIRST JOB to LATER JOB, never wavering in his resolve to become the best version of himself with each career move. AGENT got into the real estate industry X years ago when STORY ABOUT HOW YOU GOT INTO REAL ESTATE/WHY. He set out to LIST ASPIRATIONS FROM WHEN YOU STARTED OUT IN REAL ESTATE. As his career advanced, AGENT found his stride working with NICHE MARKET/SPECIFIC MARKET AREA/TYPE. He’s an expert in LIST AREAS OF EXPERTISE/SKILLS THAT SET YOU APART FROM OTHER AGENTS.
Throughout his career, AGENT has earned numerous accolades, including:
• LIST ACCOMPLISHMENTS • LIST SALES STATS ix
• ANY OTHER IMPRESSIVE INFO YOU’D LIKE TO INCLUDE
AGENT aims to provide the highest level of service to his clients and takes deep pride in helping them achieve their real estate goals. AGENT aims to provide the highest level of service to his clients and takes deep pride in helping them achieve their real estate goals.
Testimonials & Reviews for Agent Name
Here’s a list of people whom I have helped buy or sell a home, and what they said about working with me:
Agent-Name had a tough job, but she did it!
We were tough clients! We were moving to City and didn’t have a lot of time to look at houses, having to deal with our employer’s relocation, and all of the other challenges that came along. But, Agent-Name went above and beyond to help us. Even now, one year after the sale closed, I can still call her for business and service recommendations in the area — she knows just about everyone, and is very happy to help.
Agent-Name is the best agent in City!
I’ve used Agent-Name twice so far, and I was impressed both times. I bought my dream home with AGENT a year ago. She worked long and hard to find me the perfect home. And she just recently sold another property of mine. Everything went quickly and smoothly. Both of my real estate deals were done very quickly and professionally. Agent is honestly the BEST in her business. I would highly recommend her.
Agent-Name perseverance got me the house
My experience with Agent-Name during the entire home- buying process, from start to finish, has been nothing short of exceptional. I have a unique work structure, and because of this, it was very difficult to find mortgage lenders that would approve me for a home. I was very frustrated and on the verge of giving up, but Agent-Name insisted that we continue searching. Not only did we find a mortgage lender but also a mortgage that I felt great about. His perseverance is the reason I am now a homeowner. He is professional, punctual, knowledgeable, and very easy to work with. With the highest regard, I will recommend Agent-Name to all my friends and family.
Very attentive to concerns, details, and negotiations
Agent-Name helped me find a house by literally picking it out for me. Every house I wanted to go to, I got there and didn’t love it. Agent-Name was busy taking note of the likes and dislikes I was stating and said “I have a house that you’re going to love”.... AND I DID! I went back 4 or 5 times to show other members of my family, and she accommodated me without complaint. I was a first-time homebuyer, and she walked me through the steps of everything, gave me advice, and constantly followed up to make sure I was doing OK. With her help, I was able to close on the house early, right before I started my new job. I would recommend Agent-Name to EVERYONE, buying or selling. Agent-Name made it so so easy. She guided us through the entire process. She recommended great people to work with
every step of the way. She was available 24/7 to answer any questions we may have had. With her high standards, expertise in the industry, and patience, we would recommend her as a Realtor to anyone looking! She was amazing!
Agent-Name even advised me on how to prepare my house
Agent-Name was a gem. In addition to being highly knowledgeable about the real estate market, with many years of experience, he is a consummate professional. He was extremely easy to work with, gave me very good advice about preparing my house for sale and was very responsive during the entire process of receiving offers, selling and closing. I would work with him again in a heartbeat. He’s that good.
Agent-Name is the first agent I would call
Agent-Name and his team were able to rapidly list, show and sell my property. Being an expert in real estate, he was spot on in his pricing of my property and getting this deal completed. Overall, I highly recommend him and his team. If I want to buy real estate, AGENT would be the first person I’d call.
Agent-Name got us an offer in three days!
Agent-Name was the consummate professional during our stressful and difficult process. In the midst of juggling a ‘failed’ marketing effort with another agent, she presented a
well thought out plan and strategy to sell our home in short order. We needed to move quickly due to a growing family and another baby on the way. She helped alleviate that pressure by securing an acceptable offer with 3 days of listing. We put pressure on her, and she delivered. We couldn’t thank her enough.
Agent-Name kept us calm throughout the process!
Agent-Name always made herself available to answer questions. She worked hard to sell our home and find the best fit for our new home. She and her team worked with us through the entire process and kept us calm when we got anxious.
I am 100 percent satisfied!!
Agent-Name is professional and knowledgeable about everything. She is also always available. I would definitely recommend her to anyone. Very smooth transaction from start to finish. I felt confident with her experience.
Agent-Name found us our dream home
Agent-Name was very efficient and helped us find our dream home within a few short months. She was able to negotiate the price that we wanted for the house. Overall, I would look for her again to help us look for a house if need be in the future. Thank you so much!
Efficient communication and service
Agent-Name and his staff were very helpful in selling our condo. They kept me informed frequently with email, sending reports on showings, offers, and feedback from potential buyers. We are very satisfied.
Agent-Name will get your house sold fast!
Agent-Name is great and has the expertise to get your house sold. The communications throughout our sale (from beginning to end) has been outstanding. Agent-Name understands the stress involved in selling your house, and she updated our family consistently! This made us feel we were in good hands. I have worked with numerous agents, and I highly recommend her to represent you when it comes time to sell your home.
Excellent experience topped with a personal touch
Excellent experience all around, not only knowledgeable but Agent-Name and team have a very personal touch I felt like family throughout the entire process. He always took his time; we never felt rushed or like “just a number.” I sold my home and bought with him. We had lots of questions he gladly answered them with no problem and guided us through the entire process, eliminating lots of stress. I truly appreciate that and would recommend him and his team to family and friends.
CHAPTER 1 Dealing with Inherited Homes: Best Practices for Families Dealing with an inherited home is a complex subject, and there are several complicated issues to resolve. A web search for “selling inherited property” returns more than 10 million results. A glance down the first page or two shows some of the issues: • Do You Pay Capital Gains Taxes on Property You Inherit? • What Taxes Are on an Inherited House? • If You Inherit a Home Do You Qualify for the $250,000 Home Sale Tax Exclusion? • What to Do When You Inherit Your Parent’s House, Home Inheritance Issues, and on and on. Additionally, it is not uncommon for a person selling an inherited home to have a sentimental attachment to the property, with the sale being the result of a recent death in Because of continuing property ownership obligations such as property taxes, insurance, utility bills, household and grounds maintenance—in addition to any issues with the settlement of the estate—a rapid sale is often necessary. Getting a loved one’s house ready for the market can be 2 the immediate family. This adds an emotionally overwhelming component to the transaction.
anxiety-provoking, emotional, and stressful. It likely includes clearing out once-treasured belongings and depersonalizing the rooms. Then there is the financial cost of making necessary updates to attract buyers. Sometimes heirs must deal with liens or hidden problems in the house structure or systems (i.e., electric, plumbing, and gutters), and there may be disagreements among beneficiaries about the sale price, or whether to sell at all. Family members drag their feet, distracted by images of growing up in the home, preventing them from taking appropriate action. They can’t let go. Everyone takes the time they need to deal with the passing of a loved one. Sellers in this situation need to take the appropriate steps to learn the market, educate themselves, and have a reliable real estate agent and tax attorney or Certified Public Accountant (CPA), an empathetic party who is there to help. This little book is meant to offer some proven tips that can help owners of inherited property approach the issue in a structured manner, with fewer problems and more satisfactory results for all stakeholders concerned. Here, we will discuss the different aspects of splitting the property with family members and the best practices involved.
BENEFITS OF SELLING
No matter if you are a single heir or one of multiple heirs to the property, selling it as quickly as possible will save money, time, stress, and the tiring effort involved in the settlement process. There are several benefits to selling the inherited property. For example, in some cases, along with inheriting property, the heirs end up inheriting unexpected commitments and difficulties with legal and financial implications. Every situation when someone inherits and then sells a home is typically different from each other. For example, if it is discovered there are environmental concerns or the mortgage is “underwater” (meaning the mortgage balance is more than the home is worth), heirs may even choose not to accept the home at all, allowing it to go into foreclosure. Those who do not want inherited property should consult a lawyer promptly, as disclaimer paperwork will likely have to be filed. Traditional home sales methods are a perfectly good option if you find that there are no outstanding mortgages and the property is in good shape and does not require major repairs or cleaning to sell. If you can easily afford any necessary repairs and cleaning while handling the selling process, then you can safely choose to sell an inherited property just as you would any other house. This is not to say that selling the property will always be complication-free, but even when issues arise, it may still be worth it to persist with the sale. When there are siblings or family members who share the property with you as legal heirs, there might be disagreement about how the
settlement should proceed. Therefore, selling the property could save you the aggravation of dividing a singular property between many hands. Once the property is converted to money, the money can be more easily distributed among the heirs. One concern that you do need to address is the amount of time required to sell the property, since it is uncertain when it may sell. A short sale of the home can come to your aid if there are mortgage payments due which you are unwilling or unable to pay. If one or more heirs inheriting the property have an urgent need for cash, then a quick home sale is also a good option. Sometimes, you might receive some added tax benefits from selling the home. At times, you might also feel that you just want to get rid of the burdens an inherited home imposes by selling it quickly so you can get on with your life as smoothly as possible. If the property is in a different city or state, assuming the responsibility of maintaining a vacant house can be a burden that you may not be prepared to endure. If the house goes to probate, even if there are no residents, the property must be maintained. The property taxes, insurance premiums, utilities, homeowners association fees, and other ongoing costs must be paid by someone. Depending on how long the probate period lasts, families may need to pay for many months of maintenance, along with the legal fees and other expenses connected to owning and selling the property. At the end of the probate, you will also have to go through the effort and expenditure of
repairing and selling the home. Under such conditions, if your benefits are lower than your commitments, it may be wisest to simply sell the home to investors.
DEALING WITH FAMILY MEMBERS
Disputes among siblings or legal heirs over the settlement of inherited property are common. Often, disputes over a property are dominated by past issues of sibling rivalry and are a fight for dominance. In the absence of parental guidance, adult siblings are left to face the scenario of ambiguity or disagreements over their rightful role. It is essential that you work to ensure that disputes and disagreements do not lead to litigation. Litigation will only worsen the situation by causing issues with family members, and creating uncertainty and wasting time waiting for legal issues to be settled, as well as the usual expense and aggravation associated with legal hearings. The tremendous
cost involved in litigation is certainly a wasteful expenditure. Litigation is not the peacemaker’s choice—prevent it whenever you possibly can.
This situation can be avoided. By keeping the emotional heat down and a compromising frame of mind in the forefront, there is generally a solution that can be made for a peaceful settlement. Where creative solutions to these problems can be facilitated, there is mutual gain for all concerned.
A good solution is for one of the heirs to buy the property
from the others. Ordinarily, if you inherit the home with your siblings without any remaining mortgage, the rule is that ownership is to be evenly split unless otherwise stated in the will. If one of the siblings is interested in keeping it while the others want to sell it, the interested sibling can buy out the others using conventional financing. The cost involved in this process can be minimal and includes the appraiser’s fees and the closing costs. If this will work, you pay your siblings in cash for their shares and get the title of the property transferred into your sole name through a deed. Alternatively, a private agreement can prove useful under some circumstances. For instance, if you or your sibling cannot qualify for a mortgage, the one who does not wish to keep the house can finance the transaction. This will mean you will not need a home loan or incur out of pocket expenses. For a private agreement, you make a promissory note to your sibling for his or her share of the value as assessed by the appraisal. The amount due to him or her can be paid in monthly installments along with interest. With this arrangement, you can buy out the property over time. If necessary, you may also make a deed of trust that grants the power to foreclose if you default on payments. Renting the property could be the solution if none of the siblings are interested in keeping the property personally, but as a group the heirs see benefit in the house as rental or
investment property. If you have a friendly relationship and can get along for a long period as co-owners of the property, you can rent out the property and take your share out of the proceeds monthly. If one of the siblings manages the collection of rental payments and arranges maintenance for the property, the effort can be rewarded by the others with an increased share. Whatever the terms are, though, it is advisable to record them in a written agreement to forestall future disagreements and conflict. expenses and costs involved, and the commissions paid, and then divide the resulting amount among you. Selling the property as soon as you inherit also helps save on the capital gains tax. Capital gains tax for sale of the inherited property is calculated on the property value after the death of the decedent. Since the difference may not be much if the time between death and sale is short, you may be left with nothing to pay in capital gains tax. Sometimes, though, the best arrangement under these circumstances is still to sell the property, subtract the A lawsuit for partition should be the last resort for you to settle the inherited property if you cannot come to an amicable agreement with your sibling over the settlement. If it comes down to it, you can file a lawsuit asking the judge to order the sale of the home and terminate your co- ownership. This is a complicated process and the judge usually appoints a mediator first, to get the property ready for sale. If you are at odds with each other, you and your siblings might not be able to do this. Therefore, you will need to have an agent sell the home and mediate between
HOLDOVERS LIVING IN ESTATE
When inheriting a property, you might have to address the issue of holdovers living in the estate. If one of your siblings or yourself is living in the property, you need to come to an agreement with all the heirs regarding whether the concerned individual will continue to live there or will need to vacate. In the case of continuing to live there, the terms must be clearly drafted. If the right to remain there is mentioned in the will, then it cannot be challenged. If it has to be challenged for some reason, the necessary legal proceedings must be adhered to. If the decision is made to sell the property, then the property must be vacated in a definite timeline facilitating the sale. If the occupant wishes to continue residing in the property despite the sale, then it must be dealt with accordingly. If you are inheriting a property with tenants living in it, you must fulfill some responsibilities from the position of a landlord. If the property is sold, the legal rights of the tenants must be given due consideration. For complicated situations like this, consult an attorney.
SPLITTING UP ITEMS INSIDE
Decisions pertaining to the settlement of the property or the division of its contents among the legal heirs must
follow the guidance given in the will. Where there is no will enacted by the owner of the property, then the state’s laws regarding intestate succession will come into play. If either the will or the law requires the estate to be divided equally, the heirs must act accordingly. Sentimental objects are invaluable to those they are valuable to and settling them should happen out of the legal conventions in agreement between the siblings. Since the value of sentimental objects is often subjective and cannot be decided by an appraiser, the real challenge comes when more than one sibling wants the possession. Negotiation and compromise are called for. A real estate agent can be appointed to decide the value of the property. The challenge here may revolve around how to divide the real estate among the heirs in a way that is acceptable to all parties. The two main approaches that the siblings could take include either selling the property to divide the proceeds or keeping the property and sharing its use. If the estate also features assets that cannot be distributed on pro-rata basis, an equal division of value is the solution. If a sibling wants to hold the property, then the others can get cash equal to their share of the property or other assets as it may be decided. Ultimately, everyone involved in the deal walks away with his or her share of the property in the right proportion.
Dealing with the leftover items in the estate could be a
laborious task and a bothersome job while attempting to settle a property. In this situation, you might need to categorize the items as those to keep, those to sell, those to donate and those to throw away. Remember that during an estate sale, people may be ready to buy even the oddest things. Therefore, make an effort to see that as many things as possible are sold or auctioned away to be converted into cash and distributed among the heirs.
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