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When it comes to inherited property, there are a lot of unknowns. If you’re in the process of inheriting a property in Memphis, Tennessee, you very will might be feeling a little overwhelmed.
If you don’t quite know what to do with an inherited property, you’re not alone. There are a large number of steps to go through when someone passes away and leaves you a piece of real estate, but by breaking it down into manageable steps, you can tackle each one in turn. Things like mortgage and probate research, appointing a personal representative, finding a real estate agent, and more are all part and parcel of the real estate process when someone passes away.
Going step-by-step through what beneficiaries are responsible for will support your role as executor or heir.
1. Research the mortgage & timeline
Selling inherited property can be a daunting process, but with the right knowledge and preparation, it can go smoothly.
The first step is to research the mortgage and timeline. You’ll need to know how much time you have to sell the property and what type of mortgage is attached to it. Once you have that information, you can start reaching out to potential buyers and real estate agents. It’s also important to be aware of any potential pitfalls that could delay or complicate the sale. By doing your research upfront, you can help ensure a smooth and successful transaction.
You need to know what the status of the mortgage is, who’s name the deed is in, how many mortgage payments it’s behind (if any), and when the most recent home inspection was done. If there was a recent sale of the home, you’ll want that information as well. It might be helpful to work with an accountant on this part of the process to help you make sense of it.
Note that personal belongings are not part of any appraisal. They might carry wonderful childhood memories, but they aren’t part of the sale proceeds of the home. Also note that any outstanding mortgage charges must be taken care of before the home can go up for sale.
2. Appoint a personal representative
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If you’re thinking of selling inherited property in Memphis, you’ll need to appoint a personal representative. This person is responsible for a variety of tasks, including handling the probate process and any other legal issues that may arise. It’s important to choose someone you trust, such as a family member or close friend.
If you’re electing to have a real estate agent act as your personal representative, they will be responsible for finding the best property to sell and making the sale happen. Whether you’re selling property inherited from a family member or you’re just looking to get property sold in Memphis, appointing a personal representative is essential.
It’s a good idea to put someone in that you trust, but don’t get hung up on finding someone who had a personal relationship with the deceased person. In this situation, the best way to move forward is to find out how to sell or split the primary residence fairly and efficiently. That’s not to be cold, but it is simply the right way to go about estate planning if you want a smooth process.
3. Get started with an estate account
If you’re planning to sell inherited property in Memphis, it’s important to get started with an estate account. This account will be used to manage the property and pay any taxes, debts or other expenses related to it.
You’ll need to provide a death certificate, property tax bill, deed, mortgage papers and any other relevant documents when opening the estate account. Once the estate account is set up, you can list the property for sale using the property listing agent or property listing website. It’s important to keep in mind that estate accounts are typically closed within a few months of the death of the owner, so make sure to list the property as soon as possible.
Note that estate accounts can also be used to pay down any liens on the property so that those things don’t have to come out of the purchase price of the home. The previous owner might have taken a loan out against the value of the home to do repairs or pay off other debt. The best option here is to do a title search to find out about any potential liens, then set a listing price that allows you to pay them all down.
4. Explore the cash buyer options
One real option for selling inherited property is to find a cash buyer. Cash buyers are investors who buy houses for cash, without the need for financing.
This can be a quick and easy way to sell your property, but you may not get as much money as you would if you sold it on the open market. As with anything, do your research and make sure the person you choose is legit. Be sure to discuss all your options with them in detail so there are no surprises. If they don’t seem to agree on the value of the property, then you have no obligation to pursue the sale.
When you correspond with a potential cash buyer, be sure to send them pictures, list the property and prepare all the paperwork in advance so the sale goes as smoothly as possible should you get to the closing table.
5. Find a real estate agent with probate experience
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If you’re planning on selling a piece of real estate after the inheritance of property in Memphis, it’s important to find a real estate agent who has probate experience if you’re choosing to work with a real estate agent. This is because probate is the legal process of transferring ownership of property after someone dies.
The agent will need to obtain a copy of the death certificate and submit it to the court. Once the sale is approved by the court, the agent can list and sell the property. Make sure you select an agent who is knowledgeable about probate sales and the area you’re selling in, to ensure a smooth transaction. Though you might be selling a family home, the emotional piece of the home sale will be easier if you work with people who know the process.
6. Find outside support to prepare the home for sale
If you’re selling an inherited property in Memphis, it’s important to have all the bases covered. That’s where outside support comes in – like a real estate agent or attorney. They can help you prepare the home for sale, get it appraised, and order a title search. Once everything is in order, you can start listing the property and market it to buyers. Be sure to stay on top of the market conditions and act fast to get the best deal for your inherited property.
It’s not just about the professionals and market value, though. Be sure to reach out to family and friends who can support you during the difficult emotional time that selling an inherited property can be. Talk to people that you trust about what’s going on, or seek out a support group to help you find your way through the long and winding road of selling an inherited property.
7. Declutter, declutter, declutter
When selling an inherited property, it’s important to declutter and get rid of any unwanted items. This will help make the property more appealing to potential buyers and speed up the sale process.
Once family members and friends have had a chance to take the things that they find meaningful, you can then either have an estate sale or donate what’s left. If you’re not sure what to do with certain items, ask your real estate agent for advice.
Additionally, be sure to clean and inspect the property thoroughly before listing it for sale. You can hire a professional cleaning company, do it yourself, or reach out to your support network to have people come help you out. This will give potential buyers the impression that the property is in good condition and free of any potential problems.
8. Stick to basic fixing & stay away from remodeling
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When selling an inherited property, it’s important to focus on the basics – repairs and upkeep. This means fixing any damage, making the property livable, and staying away from any major renovations. It can be tempting to gut the home and do a major renovation, but you’re unlikely to get a big recoup on your investment.
Potential buyers will want to see a property that they can visualize themselves living in. For this reason, keep repairs simple and centered around the most essential systems of the home like the roof and plumbing. This isn’t the time for a full kitchen remodel or to overhaul all of the bathrooms. Keep things as simple as possible and trust that you’ll be able to get fair market value without pouring your time, money, and brainpower into fixing a home that you don’t live in and that you’re going to sell.
9. Find out how much capital gains you might owe & how to avoid it
One of the most important things to consider when selling an inherited property is capital gains tax. This tax is levied on the sale of property that has increased in value since it was inherited. Property taxes are different from capital gains tax, which is levied by the IRS rather than the state of Tennessee.
If the property was inherited within the last five years, you may be liable for taxes on the sale at a rate of 20%. If the property was inherited more than five years ago, the tax rate is 24%. If you’re selling property that you inherited more than ten years ago, the tax rate is 28%. In all cases, it’s important to speak with a tax professional to get a full understanding of your specific situation.
There are some steps you can take to minimize or avoid capital gains tax. For example, you can defer capital gains taxes by selling the property and holding onto it for a certain period of time. You can also sell the property through a trust or estate, which will reduce the amount of tax that you will have to pay. Whatever the tax implications are, the most important thing is to know what’s going on upfront before you get big tax bill.
You always have options for an inherited home in Memphis
There are so many options for people who have an inherited home in Memphis and want to sell it. Before you do anything, determine whether you want to sell the property yourself, use an agent, or go the FSBO route. Once you’ve made your decision, be sure to factor in all the costs associated with selling, like repairs, closing costs, and real estate commissions. There’s also the reality of capital gains tax to consider, so keep the tax implications in mind when you are looking to sell a piece of inherited property in Memphis.
With a little research and the help of a probate real estate agent, you can make the process much smoother. Be sure to declutter the property and make only basic repairs – leaving any big projects for the new owner. You should also be aware of capital gains taxes that may be owed on the sale. However, if you take the time to educate yourself on the process and work with a qualified real estate agent, selling your inherited property can be a relatively painless experience.
You don’t have to do everything at once, but there is a timeline to consider. Keep going one step after another, and sooner than later you’ll reach the finish line. Remember, selling an inherited home can be a lengthy and emotional process, so make sure you’re prepared for the challenge.