Losing a loved one is difficult for many people, and being faced with selling an inherited property can add another level of stress during an already challenging time. Amid making funeral arrangements and taking the time to properly grieve, assuming the responsibility of your loved one’s estate can be very overwhelming. Many people, prior to their death, will name beneficiaries or executors of their property. When they pass away, the named individual or individuals will assume ownership of the property they’ve inherited. If you’re named as the sole beneficiary of the estate, it’s one hundred percent normal to feel a bit lost and unsure where to start. The following guide on properly selling an inherited estate is here to help you navigate through this special kind of home sale as smoothly as possible.
Before Selling the Estate, Determine Whether the Courts Need to Get Involved
Not all wills are cut and dry, nor is the process of inheriting an estate. Even in cases where the deceased has a will and there is a named executor or personal representation, some level of court approval or intervention will be required. This process is called probate. If a person passes away without a will, also known as “dying intestate”, the property in most cases will be transferred to the closest living relatives, but this process can take longer and will require court approval. It’s important to note that every state has different laws addressing this issue, and you should consult with a professional attorney to gain a full understanding of your state’s probate process. When it comes to real property (including a home or land), there are different kinds of ownership that help the courts determine who the executors of an estate sale will be:
- Sole Ownership – This is when a property is owned by one individual. When this person passes away, the property isn’t transferred to anyone unless it has been clearly stipulated in a will prior to their death. Typically, a family member or friend of the deceased will initiate a proceeding in the probate court to determine the appropriate beneficiary.
- Joint Ownership – If a property is owned jointly, this means there are several people listed on the deed. This is sometimes called a “joint tenancy” or in some states for a married couple, a “tenancy by the entirety.” Real property that is owned in this way does not transfer by will or through the probate process. Instead, the title transfers automatically upon the death of one joint tenant to the surviving joint tenant(s). If a couple jointly owned their home together, full ownership would typically transfer to the living spouse. If more than two people are owners, there are two scenarios: Anyone listed on the deed as having “rights of survivorship” will receive ownership of the property. This could include one or several of the owners.
- Tenancy in Common – Finally, ownership can be held by two or more individuals “in common.” This is a very different form of ownership from a joint tenancy. When one tenant in common passes away, their share of the property passes to their beneficiaries.
Ultimately, you should always consult with a professional attorney to determine what will happen to your loved one’s property once they pass away. They will be your best resource for the legalities of an estate sale.
Handling Estate Costs
Once you assume rights to the estate, you become responsible for keeping up with the property’s cost, including but not limited to mortgage payments, electricity, water, gas, and other home utilities. These extra costs can add up quickly, so it’s best to consult with a financial professional to help you navigate any estate fees. Doing so will help protect your financial well-being after you inherit an estate and potentially avoid any surprises down the road.
Figure Out WHO Can Sell the Estate
One aspect of estate sales many may not be aware of is that not all beneficiaries can sell the property! Legally, only the individual or individuals named as the executor or personal representative of the estate have the right to sell the home. The common misconception is that beneficiaries and executors are interchangeable terms, which couldn’t be further from the truth. Beneficiaries are those who will inherit the property from the deceased. A beneficiary can include an individual’s spouse, children, friends, other relatives, or charities. They have the right to any information regarding the estate, but they are not entitled to manage or sell any part of the estate (of course this changes if and when a beneficiary actually takes title to the property). The executor or personal representative is the person who manages the late owner’s estate. They are responsible for several items, including handling the sale of the property. In some wills, the executor and the beneficiary are named as the same person. Consult with an attorney to ensure you fully understand the difference between the two roles, and what each is entitled to. If you are at least named as the executor, it’ll be up to you to move along with the sale.
Tax on the Inherited Estate
Tax issues for properties held in an estate are complicated and states vary widely in this area. Some states may impose an estate tax if the value of the estate is above a certain threshold. In addition, some states may impose a transfer tax, also called a deeds excise tax on the transfer.
Selling an Inherited Property
As an executor or personal representative working with court approval, if you decide that the best course of action is to sell your relative’s property consulting with an experienced attorney and a REALTOR® is key. The most common route for selling a home is to go through a real estate brokerage to put it on the market traditionally. Your first step is to find a REALTOR® who has experience in estate sales. They will be your guide throughout the whole process and ensure the transaction closes smoothly. An estate sale is more complicated than a traditional home sale. Depending on your state law, the court may require the executor to continue to market the property even after an offer to purchase has been accepted. The reason for this is the court always wants to ensure that the estate receives the highest and best offer.
The decision is ultimately up to you and depends on what works best for your situation, but if you want to ensure that your loved one’s home is handled with care and compassion, hiring a REALTOR® you really trust is the best way to go.
Hiring a REALTOR® to Guide You in Selling the Estate Property
Choosing the right REALTOR® is without a doubt an important decision, but even more so when grieving a loss and when an inherited estate is in the mix. Spend adequate time considering your options for agents, as working with someone who specializes in estate sales can help alleviate some of the stress and make the selling process much easier. Not only will your agent guide you through the complexities of selling, but they also serve as an empathetic support system during this difficult time. During any real estate transaction and especially for emotional ones, who you have in your corner matters.
Prepping the Inherited House for Sale
After you have found the REALTOR® who will guide you through the estate property sale, there are a number of next steps to take to prepare for the home to go up for sale:
- Declutter – The first step is to declutter the space. Sorting through the belongings of a loved one who has passed away can be an emotional process, and it’s okay to take your time during this step. Start by going through each room in the house and decide what to keep, donate, or throw away. Pack up cherished items carefully and dispose of anything broken or not working. Consider donating things that are still in good condition to others who could use them.
- Stage – The next step is to stage the home for listing photos and showings. After decluttering, spend time cleaning and rearranging the interior to showcase the house’s best features. It is also important to de-accessorize. This can be an emotional process, as many don’t want to remove pictures and knickknacks that hold so many memories of their loved one. However, buyers are more likely to respond to a home they can picture themselves living, and making new memories in.
- Spruce Up the Home’s Exterior – The outside of the house is the first impression that buyers will have before walking inside. Spend a little time improving the property’s landscaping. Rake the leaves, mow the lawn, remove any overgrown plants, or add some décor to the front door.
Finding Peace and Moving on After an Estate Sale
Navigating the sale of a loved one’s home amidst grief can be daunting. Understanding legal processes like probate and transfer taxes is crucial, as is understanding the roles of beneficiaries and executors. Exploring selling options requires careful planning but hiring a compassionate REALTOR® can provide an extra layer of support. As you prepare the house for sale, we can help you move through each step, honoring your loved one’s cherished memories. Remember, you’re not alone in this journey—our team at Lamacchia Realty is here for you for all of life’s big changes.