Selling an Inherited Property in Florida

For starters if you’re reading this you probably have lost a loved one. And that loved one loved you enough to pass a piece of real estate to you. Whether its an inherited house, piece of land, warehouse, or any other kind of property. Consider it a gift! On the outside it appears dark, overwhelming, mind boggling, and all together over stimulating. You will go through a variety of feelings-grief, confusion, anger, betrayal and more. Probably even asking yourself “Why did my family stick me with this property?” I’m an optimist at heart. So I like to think there were good intentions behind it! An inherited property can be a significant boost in you life! There is so much that you can do with the property! From fixing it up to selling it, to renting it out, or simply move into it! The opportunities are endless! This is why real estate is AMAZING! If you have inherited a property and you are simply stuck we’d love to jump on the phone with you and work out that tangled mess! You never know…it may lead some thing very exciting!

With all my excitement aside Inheriting a property is overwhelming and most do not look at it the way I do. It also can be super tough on your bank account. The entire probate process can be so confusing so long and so drawn out. And when it comes to real estate is the inherited property close to you or out of state? Does the property need expensive upgrades and repairs? How much will you have to pay in taxes? Is there a will or will you need to deal with the probate process? But inherited properties are also a great opportunity for real estate investors and buyers looking for a discount on a property they can make their own. The “We Buy Houses” guys will be your new best friend! They are everywhere. Just make sure you get you numbers and affairs in order prior to selling. What does it take for a homeowner to sell an inheritance? Are there special steps that need to be taken to deal with this type of sale? This article will explain the process of selling an inherited property to (hopefully) make a profit.

How To Sell Your Inherited Property in Florida

So you’ve inherited a property and you’re not sure what happens next. You’re not even sure you want to deal with this property. In most states, the inherited property must go through a probate process so the courts can determine who is the legal owner. Probate is a legal process in which the Court legally transfers ownership of the estate’s assets to one or more beneficiaries and/or Heirs. Depending on the state of the will (if there was one), this process can be very fast or very slow.

• Determine the Executor

For inherited properties with a will, establishing the executor of the estate should be straightforward. One of the most important aspects of a will is establishing an executor that is able to carry out the deceased’s wishes through the process of probate.  Any assets listed in a will can’t be sold until the will is validated by the Court but, once approved, the executor of the will is allowed to act on the wishes of the deceased. But if the will is contested or there is no will, the process might take longer as the Court gets involved. This can be especially draining on all involved.

The probate court will appoint someone not associated with the family as an administrator to the estate. These administrators play a similar role as an executor; they are responsible for carrying out the wishes of the deceased as stated in the will, as well as paying off any of the estate’s debts and distributing any assets. They may also determine if any real estate assets will need to be sold to pay off the estate’s debts, including back taxes, mortgages, etc.

• Working with Lawyers and Real Estate Agents

Probate is not a simple process which is why you’ll want an experienced lawyer to help you navigate the potential pitfalls of selling an inherited home. But once you have the probate court’s okay to move forward with the sale of the property, working with a real estate agent that has dealt with inherited homes before will be your next smart step. An experienced agent with probate experience will understand the nuances and regulations for this type of sale. They can help you find the right buyer to help you get top dollar for the inherited property. They also will be a helpful guide to let you know what is worth spending time and money to fix up and upgrade, and what is a waste of your time. Listening to their advice may be the difference between selling a property quickly and for a profit, or being stuck with a house that sits on the market for too long and sells for below market value.

• Resolve Any Debts

When you hear the word “inheritance” do you think of a mysterious great-aunt leaving you a million-dollar mansion in the woods, or do you understand the reality of having to deal with a property that might have liens against the title, years of back taxes, as well as a mortgage that leaves you with the ability to make much of a profit after a sale? Sadly, dealing with a loved one’s passing often means dealing with their debt, whether that’s in the form of taxes, a mortgage, or maxed out credit cards. Any assets you inherit must go to paying off that debt first before you can see one dime of the estate. While a house may seem like a huge asset, it also can be a huge money pit. An experienced estate advisor can help you research your options when it comes to dealing with an estate.

• Clean & Restore the Home

Once ownership has been decided and the property is considered yours, your next step will be to decide whether you want to live in it, rent it out, or sell it. Many times, when a loved one passes they leave behind a house that is not in the best of shape. Whether the property hasn’t been kept up in the past decade and needs major cleaning and repair, or there were never any upgrades done and the house will need to be completely renovated to make it “market ready”, this is the part of an inheritance that is often forgotten about. This can cause a huge strain on your time and budget. Often times if the property condition is too much for the heirs to handle and they opt to sell it as is. If the property wont qualify for insurance and/or mortgage it will have to be sold as a cash deal. Here you can use a realtor or sell directly to a cash home buyer.

Do all heirs of the inherited property have to agree to sell the property?

No, the Heirs don’t have to agree to sell an inherited house or property if ownership has been established by a will or the probate court. But if ownership has not been established, such as with an estate with no will and/or a Court-appointed administrator, then all Heirs must agree to the sale. This also includes properties that have been put up at auction by the Court to pay off the estate’s debts. If a buyer purchases a house at auction but one or more of the Heirs disagree with the sale, the purchase must be put on hold while the disagreement is worked out and a settlement is reached.

• How to Settle a Disagreement

There are a variety of options for settling disagreements among Heirs over an estate, but the first step is making sure that a loved one has an executor. Having a point person who is there to make sure the deceased’s wishes are followed as set forth in the will can help ease the arguments over how the assets will be dealt with. We all know either from experience or stories from others that death of a loved one can bring out the ugly in others. Now, if there is no executor and the will is being disputed, your next step may be hiring a mediator. Having a neutral third party to help work out differences will be much more affordable than a legal battle in probate court.

• Best Practices

But what if the issue is around the executor themselves? Disputes can occur when a family member is named as the executor or trustee of a will, causing strife with the other family members. If this has happened to you, an option is for the person to decline the appointment and choose an independent fiduciary, such as an estate-planning attorney, to administer the will. Stepping back while a neutral party steps in might not just keep arguments from cropping up, but might also give everyone the time and space to deal with difficult emotions before it permanently damages your family. 

How is inherited property taxed when sold?

State and local governments in the United States collected over $5.3 billion in revenue from estate and inheritance taxes in 2020. That’s a lot of taxes! But with laws and regulations different from state-to-state, you’ll want to do your research and contact a lawyer with knowledge and experience of taxes and estate planning as you deal with a surprise inheritance or you’re writing your own will. 

State Tax Laws

Each state has different laws regarding inheritances. In the case of the sale of an inherited property, states may take an estate tax, an inheritance tax, as well as a capital gains tax on your inheritance. Currently, twelve states have an estate tax, 5 have an inheritance tax, and one has both an estate and inheritance tax.

1. Capital Gains Tax on Inherited Property

What is the capital gains tax and which states require it? The capital gains tax is paid on the appreciation of any assets that an heir inherits through an estate but it is only levied once the asset is sold for a profit, not when you inherit. This tax is then paid on the difference between the sale price and the purchase price of the property. Most states require this tax paid on an inherited property, but there may be exemptions for individuals selling a property for less than a certain amount. An example is Washington State, where the capital gains tax is not levied on homes and/or properties sold for less than $250,000. There may also be other legal ways to get around or reduce the capital gains tax in your state, including reinvesting the money in another property. Consult with a tax lawyer knowledgeable of the laws in the area you will be selling before proceeding with the sale of your property.

2. Estate Taxes

An estate tax is a tax paid directly out of the estate to the state before anyone is able to inherit it. Worried that you might get a huge hit taken from the estate? Don’t worry! The estate tax has a minimum threshold which in 2023 was $12.92 million for individuals. This means that the government is not able to charge you an estate tax unless your total taxable estate is worth $12,920,001. The remainder is passed on estate tax-free. Despite having such a high threshold, each year more states repeal their estate tax laws, losing out on millions of dollars of revenue.

3. Inheritance Taxes

Only six states have an inheritance tax, meaning that it is likely that you are in the lucky majority that won’t have to deal with this. But if you live in one of those six states – Maryland, Nebraska, Kentucky, New Jersey, Pennsylvania, and Iowa – you as a beneficiary/Heir to an estate will be required to pay taxes on your inherited assets and properties. But don’t worry – even if you live in a state that has an inheritance tax, you won’t have to pay a dime if the deceased lived in one of the 44 states that does not have this tax.

*For anything tax we highly recommend chatting with your CPA so they can accurately go over your personal situation and give you a clear answer on tax implications. Please DO NOT go by what you Google or find on line! Always seek professional advice when it comes to tax questions!

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We have been buying, selling, fixing, and flipping real estate since 2006. Over the years we’ve worked with and helped homeowners with all kinds of situations sell their house or property. Whether its a divorce, foreclosure, inheritance, hoarding, or deferred maintenance we can tackle it. Our priority is to find a solution that best fits your needs. Click below to get your free consultation!

 

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Documents required to sell an inherited property

To show legal ownership and place a property for sale, you will need to have a copy of the documents issued by the court that grant you the legal authority to act as the executor or administrator of the estate. These documents will establish your ability to manage the inherited property. Once a buyer is found and you are ready to close, you’ll need the deed, title insurance, or other relevant legal records to establish the legal ownership of the inherited property. 

Do your research regarding what additional documents may be needed to sell an inherited property! Some jurisdictions may require additional property-related documents, including previous surveys, inspections, or any other relevant paperwork that pertains to the property’s condition or history.

Is there an easier way to sell your inherited house?

Yes, there is! Particular Properties is a direct house buying company that has built our reputation on buying inherited houses for cash with less stress and less fees. Contact Us today and get a competitive cash offer for an inherited house, condo, or property. We buy houses in any condition, and we can also help with the convoluted process of selling a house in probate! Let us make your home selling experience as straightforward and stress-free as possible so you can move on with your life.

If you own a property that’s stuck in probate that you are ready to sell, call us at 407-721-6898 day or night to get a competitive cash offer for that inherited home. We buy houses in any condition and no matter what the estate’s financial situation might be. Even if the house suffered major damage in the last storm or was neglected for years and needs a large amount of work to make it “market ready”, once you accept our fair cash offer our team of experts will handle all of those expensive repairs so you don’t have to! We make selling an inherited house easy.

Still cant decide? Check out the article Realtor Vs. Cash Home Buyer and see which is the best for you!

Sell Your Inherited Property!

Common Questions

1. What are my options for selling the inherited property?: Heirs may want to understand the different options available for selling the property, such as listing it on the open market, selling it to a cash buyer, or exploring other alternatives like auctions or estate sales.
2. What are the tax implications of selling inherited real estate?: Heirs may inquire about the tax consequences of selling inherited property, including potential capital gains taxes, estate taxes, and any exemptions or deductions available. This typically can be done through an estate attorney or a CPA.
3. Do I need to probate the estate before selling the property?: Depending on the circumstances, heirs may need to go through the probate process to legally transfer ownership of the inherited property before selling it. They may seek guidance on the probate requirements and procedures in Florida. Assets of the deceased goes to probate when the deceased does not have a will.
4. What is the fair market value of the property?: Heirs may want to know the fair market value of the inherited property to assess its potential sale price and make informed decisions about selling strategies. A local realtor should be able to provide this information to you. You can also do some research on your own through Zillow and Realtor. I only recommend this as a estimate, as a professional can give you a better idea on price.
5. Are there any liens, mortgages, or encumbrances on the property?: Heirs should inquire about any outstanding debts, liens, or encumbrances on the inherited property that could affect the sale process or proceeds. This will be completed when a title search is done. Your attorney will advise what to do and how funds are dispersed.
6. Can I sell the property if other heirs are involved?: If multiple heirs inherit the property, they may have questions about the process of selling the property jointly, including how to handle disagreements, distribute proceeds, and obtain consent from all parties involved. The executor of the estate typically runs the show. This helps eliminate disputes among the heirs.
7. What are the costs associated with selling the property?: Heirs may want to understand the various costs involved in selling inherited real estate, such as real estate agent commissions, closing costs, transfer taxes, and any expenses related to preparing the property for sale. Your attorney should be able to provide an itemize list of all costs.
8. How long will it take to sell the property?: Heirs may inquire about the timeline for selling the inherited property, including the time required to prepare the property for sale, find a buyer, and complete the transaction. Cash offers typically will move the property quicker than a traditional sale through a realtor.
9. Are there any restrictions or zoning regulations affecting the property?: Heirs should be aware of any restrictions, zoning regulations, or land use ordinances that may affect the use or development of the inherited property. If your attorney or realtor doesn’t help with this your local property appraiser is a wealth of information.
10. Do I need legal or financial advice?: Given the complexities involved in selling inherited real estate, it is highly recommended that heirs seek guidance from legal and financial professionals to navigate the process effectively and protect their interests.

ABOUT THE AUTHOR

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Jessica is a licensed real estate broker in the state of Florida. She has been buying and selling real estate since 2006. She is an investor at heart. Specializing in helping homeowners dealing with Tax delinquents, foreclosures, creative financing, and more. All publications are opinion based formed by experience. If you are seeking tax or legal advice it is recommended that you contact a licensed CPA and/or Attorney for your specific needs. If you’d like to learn more about how Particular Properties can help you please click button below!

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