The sale of your parent’s house usually falls to you at an emotional time. The loss of a parent is difficult for anyone, and when compounded by the added pressure of handling their estate, it can feel downright crippling. There are numerous legalities involved with the sale of an inherited home. During this emotionally trying time, you will need support-- not just from family, but from a knowledgeable real estate agent who is familiar with these unique types of sales.
When a parent passes away, the home continues to accrue mortgage payments, utility bills and property taxes, so you’ll want to come up with a plan and act on it quickly.
Carefully go through your parent’s belongings
This sounds like a no-brainer, but the key word here is “carefully.” After days spent opening boxes and sorting through seemingly never-ending knick-knacks and old paperwork, fatigue and boredom may set in. But don’t let your attention to detail waver. Depending on your parent’s age and the conditions they grew up in, they may be accustomed to stashing money and other valuables. We hear stories everyday of sons and daughters finding cash and other priceless items hidden in attics, hidden compartments in floors, wrapped in blankets in the bottom of boxes – things they didn’t even know their parents had. You may want to also hire an appraiser to determine the value of antiques and artworks you come across. Don’t forget to carefully organize and secure all paperwork you find. The sale of an inherited home can be complicated, so it’s a good idea to have any and all paperwork handy.
Get the home inspected
As people enter their twilight years, home repairs and maintenance can become more of a job than they are capable of doing. Even household chores can become too much for them to do properly, so they either ignore some or find shortcuts. Our parent’s home is almost never in perfect condition when it comes to us to sell. Sometimes it can have decades of neglect. Major cleaning, repairs, and renovations may be necessary to get it into shape for the market.
Hire a knowledgeable real estate agent
Coming up with a plan of action and moving forward quickly is essential after the passing of a parent. If you sell an inherited home soon after death, you are considered “stepped up” and will have to pay taxes only on the home’s fair market value from the time of death to the date of sale, which would be minimal. If the home is gifted to you and worth less than 5.34 million dollars, you will not receive a tax penalty. But if you sell it quickly, you’ll need to pay capital gains taxes – taxes taken only on the amount the home has appreciated from its purchase to its present fair market value – which could be quite expensive. The only way to avoid capital gains taxes is to live in the home for at least two years. Sales of these kinds may also involve estate taxes, homeowner’s insurance, vacant property insurance, and more. An experienced real estate agent can help you navigate the often confusing red tape of inheriting a home.
In general, a buyer doesn’t want to deal with a home sale from a seller that is unprepared and doesn’t have all of the legal and financial aspects of an inherited home accounted for. The right real estate agent can tend to properly preparing the home for a successful sale, while you tend the emotional needs of you and your loved ones.