If you’re like many people who have inherited a home, you don’t really want it – and that means selling it is on your mind. But how can you sell a house you inherited, and is there anything special you have to do? This guide explains your options.
Can You Sell a House You Inherited?
You can definitely sell a house you inherited, even if you own only part of it and share the rest with other heirs. However, the process can be a bit different because the disposition of an estate can take several months (and, in rarer cases, years).
In the vast majority of cases, it’s wise to check with an experienced financial adviser before you decide to sell a house you inherited. That’s because as a seller, you’re going to be responsible for things like closing costs and possibly inheritance taxes.
About the Probate Process
When someone passes away, their estate – that’s the term for all their assets, debts and belongings – goes into probate. Probate is the legal process that takes place after someone dies. The probate process includes things like:
- Proving that a person’s will is valid
- Identifying and inventorying the decedent’s property
- Having property appraised
- Paying debts and taxes
- Distributing the property as outlined in the person’s will
Not all property goes through probate. In Tennessee, property such as life insurance proceeds, retirement accounts and living trust assets don’t go through probate; and probate isn’t necessary for property valued at $50,000 or less. As you can guess, most homes are worth more than $50,000 – and as such, they have to go through the probate process.
What About Inheritance Taxes?
Most estates aren’t subject to federal estate tax – but sometimes selling inherited real estate triggers taxes. The Internal Revenue Service can tax you if you sell the home for a financial gain. For example, if the home was bought for $150,000 and is worth $400,000 when the previous owner dies, you can likely sell it without triggering any taxes. However, if the home is worth $400,000 when the previous owner dies and you wait to sell the home for $425,000, you may be responsible for paying taxes on the stepped-up value (that additional $25,000) that the home gained after the previous owner died.
Getting Agreement From Other Heirs
Usually, the biggest hang-up in selling a home that you inherited is getting permission to sell from the other heirs. Sometimes one heir wants to keep and live in the home and the others want to sell; if that happens, the person who wants to keep the home “buys out” the others by paying them for their portion of the home. If that’s not economically feasible, you may need to hire a mediator or family attorney to negotiate a solution.
What to Do if You Want to Sell an Inherited Home
If you have permission from the other heirs (or if you’re the only heir), you should contact an experienced Knoxville REALTOR® as soon as possible. Your agent will be able to tell you what needs to be done to the property to prepare it to sell, and she can guide you every step of the way to ensure you get the best possible price for the house.
Are You Buying or Selling a Home in Knoxville?
If you’re ready to buy a home in Knoxville, I’ll help you find one that’s perfect for your needs. Call me at 865-368-5150 now and let’s talk.
While you’re here, use this Knoxville home search – you can see listings instantly! You can also look at:
- Bearden homes for sale
- Downtown Knoxville homes for sale
- Halls homes for sale
- Knoxville homes for sale
- Norwood homes for sale
- Cedar Bluff homes for sale
- Farragut homes for sale
- Hardin Valley homes for sale
- Mechanicsville homes for sale
- Oak Ridge homes for sale
- Clinton homes for sale
- Fountain City homes for sale
- Karns homes for sale
- Norris homes for sale
- Powell homes for sale