When you inherit a house, it may either be a pleasant addition to your property or a burden. It all relies on your own condition and circumstances. When you inherit a property, you have a few options for how to proceed. First, you have the option of residing in the house. Second, as a landlord, you may rent out the house and earn some money. Third, you have the option of selling the residence.
If you decide to sell the house, you have a few options. You may have an estate sale. You can put it up for sale on the open market. You may also sell it as-is to a cash buyer. Some of these procedures need more effort than others. However, if you intend to sell your inherited property in Texas on the open market, here is a short but useful guide to show you the general route ahead of you.
Complete Guide to Selling a House you Inherited
Know What You’ve Got
When you inherit a home, the first challenge is to figure out exactly what you acquired in terms of value, repairs, and any other issues that might exist in the property. Start by taking a close look at the home’s current condition. If you decide to live in the house, this is a crucial step that will determine what to do next. You can also ask an impartial third party to come in and make an assessment for you.
The next step is to clarify ownership. Are you the sole heir, or did the house pass down through several generations? Is everyone in agreement that the house should be sold if it is the latter? Otherwise, you may have to “buy out” the other inheritors in order to proceed lawfully. This might be an advance payment or a sum based on the ultimate sale price. Whatever it is, be certain that it is all legally recorded and permitted.
Scope Out the Financial Implications
When selling an inherited property, there are several financial duties that you must consider since you may not be aware of them beforehand. You may be liable for taxes on the proceeds of any inherited property sale. Despite the fact that Texas does not have an inheritance tax, you will be responsible for federal taxes, which will be decided by the value of the house. The tax rate is determined on the value of the residence.
Remember that inherited homes do not qualify for a home sale tax exclusion until you have lived in them for at least two years. As a result, you may be missing out on a tax law benefit. The good news is that you may benefit from the stepped-up tax base. This basically implies you won’t have to pay capital gains tax on everything acquired prior to the death of the previous owner. You’ll only be liable for as long as you’ve been the legal owner of the property.
Pay Off Any Outstanding Debts, Liens, or Judgements
Once the ownership of the inherited home has been determined, any debts or liens on the property must be paid in order for the home to be sold. Liens are used by creditors, mortgage companies, and contractors to guarantee that they get paid. These liens make it impossible for you to sell or refinance the inherited home. Schedule a meeting to discuss what is owing if you know who the mortgage is via.
Prep the House for Sale
When you decide to sell the house, you may need to make some improvements in the property’s current condition. This can be a costly, time-consuming task. But if you are planning to live in the house, you may choose to hold off on any repairs for the time being. If you do decide to do any work, make sure you get any permits required by the local government.
Selling an inherited home is possible, but there are endless steps that may complicate the process. From settling any outstanding debts and liens to determining the value of the house, there are a significant number of issues that can pop up. By simply following these tips, you will have a clear idea about what to do and what not to do during the entire process, thereby lessening the pain. The key is to do your homework before you begin. The rest will fall into place.
At Greenlight Offer, we promise to make your house selling experience simple and easy. We handle all of the complicated details when selling your house, so you do not have to stress about the entire process. We will help you through every step of the way so that you can get the most money possible for your house. Sell your home fast by reaching out to our team today!