All You Need To Know
Inheriting a house is a surprisingly common experience. Every year, thousands of people in Long Island become property beneficiaries when a member of their family passes away.
Unfortunately, an inherited property can bring numerous challenges. Going through the traditional sales process can take a long time, requiring you to list the home, open the house for viewings, and take part in negotiations.
That’s why many people choose to sell an inherited property for cash. This approach simplifies the probate process, helps to pay outstanding debts quickly, and bypasses the need to pay large fees to a real estate professional.
Ultimately, when you sell, inherited house cash flows to you more quickly, helping to speed up the transaction process.
This article explains the inheritance process and the emotional toll of selling a family home. Then, we discuss why selling to an investor makes sense for some people and the financial benefits of a quick cash sale. Finally, we look at how our service can help you and the various property taxes and capital gains taxes you may need to pay.
The process for inherited property can seem complicated, but that’s mainly because of the legal jargon professionals use. Once you understand it, it becomes simpler.
When a person dies in New York State, who should receive their property depends on their will, a legal document detailing the deceased person’s wishes. First, your probate attorney submits the will to the Surrogate Court. Then, it evaluates the document and decides whether it is legally valid – the probate process.
Filing for probate requires the will, a certified death certificate with the date and location of the original owner’s death, and a probate petition form. If the will is valid, the court will name the executor based on the instructions in the will. This person is responsible for carrying out the will and distributing valuable items in the estate to family members and anyone else named on the document.
The executor must then carry out the legal process, as described in the law.
Executors must pay creditors any debts the estate owes first. These might include outstanding mortgages, credit card debts, and personal loans. Then, they must pay taxes the estate owes. Finally, they can distribute the remaining funds to recipients, which could include selling inherited property.
If you inherit property in Long Island, you must pay an estate tax or transfer tax, depending on the property value. There are also income tax implications when selling inherited property, depending on the difference between the house’s fair market value and the sale price. (We discuss these obligations in more detail below). You must also pay any remaining liabilities to creditors first, including outstanding utility bills, even if these reduce the cash value of the estate significantly.
While the legal process of selling inherited property sounds straightforward, the emotional side is not. Many people feel strong sentimental attachments to family homes and don’t want to give them up.
For example, inherited houses serve as a backdrop for many of life’s significant milestones. You might remember them for being the place where you first learned to ride a bicycle, enjoyed parties, or indulged in hobbies.
The thought of severing those ties, when you sell inherited property, can trigger a sense of loss and pain, even if you get fair market value. You might even feel a sense of guilt or betrayal that you are selling the property of a loved one and giving up the family legacy. For many, homes are more than mere buildings, but also physical symbols of family togetherness.
Managing an inherited property can also be stressful for executors and beneficiaries. You must navigate a complex legal and financial maze, including inheritance tax, while also ensuring the property remains in a decent state of repair. Managing upkeep can be a logistical challenge, particularly if you live a long way away.
Many people use a real estate agent during and after the probate process. However, selling an inherited house to an investor might be a better option.
Perhaps the biggest benefit of selling an inherited home to a real estate investor is the faster sale process. Unlike a traditional real estate transaction which can drag on for months, professional investors can leverage a range of tools enabling them to expedite the sale. Selling to a local cash buyer bypasses market fluctuations, buyer financing issues, lengthy negotiation periods, and more. Simply receive a straightforward offer, based on fair market value.
When you sell your inherited property to an investor, you also avoid the need to make repairs or renovations. Professional buyers understand the true value of inherited homes, regardless of their superficial appearance. Selling to them lets you avoid the need to refurbish them and present them in the best possible light.
Finally, you can avoid traditional real estate market hassles when you go to a professional buyer, such as waiting for the mortgage company to approve the buyer’s loan or dealing with showings. Selling an inherited home to an investor bypasses negotiations and contingencies that can further delay the sale and prevent you from having to host an “open house.”
Besides the quality-of-life benefits of selling an inherited home to a cash investor, you also get financial benefits.
Perhaps the biggest draw is the immediate liquidity. When you sell your inherited home to cash buyers, you get money straight away which you can use for other purposes. This rapid influx of funds enables beneficiaries to receive their share of the estate more rapidly, speeding closure. Contrast this scenario with conventional real estate transactions where the process can drag on for months.
Sales to real estate investors also bypass real estate agent commissions and closing costs: fees that can substantially diminish the amount of money beneficiaries receive after the sale. Cash home buyers use fewer middlemen and simplify the transaction process, leading to more favorable financial outcomes.
Finally, cash buyers can deal with outstanding mortgage payments or liens on inherited property. For example, some creditors use inherited properties as collateral. Liens give them the right to sell the borrower’s property if they can’t repay the debt they owe. Mortgage companies also have a right to receive outstanding mortgage payments following the home sale.
Fortunately, many property investors have vast experience navigating the complexities of these encumbrances, allowing them to manage them more seamlessly. Money owed gets paid and the remainder flows to the beneficiaries.
With these benefits in mind, how should you prepare an inherited property for sale? Here are some essential considerations:
First, you’ll want to consider what you will keep, sell or discard. This part of the process can be emotional and, therefore, harder than you imagine. Rummaging through the deceased person’s belongings and deciding what to do with everything can take its toll.
If you are struggling with this, ask family members or friends for support. Those with less emotional attachment can help you declutter and depersonalize the space, getting it ready for the new owner.
You should also address any immediate maintenance issues. While cash home buyers will buy fixer-uppers, letting problems fester can cause substantial damage that lowers how much they will pay.
The top priorities to consider fixing include:-
Minimizing perceived risks will attract buyers and help you get a better price for inherited assets. Solve the most critical problems first before moving on to more cosmetic issues.
Finally, you might want to consider staging an inherited property to increase how fast it sells. On the positive side, staging makes it easier for buyers to visualize how they will use the space. It may also help attract a higher price by showcasing the property in better lighting and making it look its best.
On the negative side, staging requires a significant time and money investment, which might not be practical if you are going through the probate court or you live a long way away. It can also eat into the estate’s value if making cosmetic changes costs more than the increased price you receive.
Finally, staging the home may be unnecessary, particularly if you go to a cash buyer. Most investors are more interested in the building’s potential than its superficial appearance.
Selling an inherited house through conventional channels is challenging. You have to deal with monthly mortgage payments and all the responsibilities of being a de facto property owner.
Fortunately, We Buy Long Island Homes Fast can help. Our services let you sell property for cash so you can benefit yourself and other family members from the net proceeds.
We follow a simple three-step process.
Step one is to contact us and tell us more about your inherited house. Simply provide us with relevant information via our online form.
Next, we consider the information provided and schedule an appointment. Here, a personal representative will provide you with an offer close to fair market value.
Finally, we help you close with a reputable local title company. You could have cash in your hands in as little as ten days.
When you come to us, you avoid the need for repairs or cleaning, leaving more money in your pocket. As potential buyers, we don’t care about the property’s cosmetics; only its potential. It’s that simple!
Finally, we make competitive and fair offers. While the cash values might not be as high as the traditional housing market, coming to us avoids all the fees and hassles associated with going to a real estate agent. Bypass difficult negotiations and avoid issues with buyer financing.
Unfortunately, myths surrounding selling inherited property to investors abound. Therefore, this section attempts to separate fact from fiction.
One of the biggest misconceptions is that cash buyers make low-ball offers. Investors are only looking for bargain-basement properties so they can make the highest possible returns.
However, that’s not how it works in practice. While offers are typically lower than on the conventional housing market, competition is fierce. Investors must take into account fair market value and repair costs when making an offer. Low-balling simply doesn’t work because executors can always go to someone else.
Another myth is that investors are profit-hungry animals who treat sellers unfairly. But again, that’s not true. Would-be cash buyers face considerable competition and must maintain a positive reputation to be successful. It simply doesn’t pay to make aggressive offers that leave sellers out of pocket.
Of course, there are always bad actors. That’s why it is critical to learn how to identify and avoid real estate scams.
Always ensure you are dealing with a reputable investor. Seek references, check online reviews, and ensure they have a website with verifiable contact information.
Also, be cautious of unusual tactics. Don’t sell to investors who ask for upfront fees or rush you into making quick decisions. No legitimate cash buyer will ever require advanced payment to make an offer or rush through a contract and pressure you to sign it.
Traditional and cash sales on an inherited house differ considerably from each other. Therefore, this section examines the main ways they diverge and why it matters to you as someone looking to sell an inherited property.
The timeframe for selling an inherited property varies wildly. Traditional transactions require listing the property, working with an estate agent, performing solicitor work, marketing the house, providing viewings, and negotiating with buyers. As such, this process can drag on for months, even if you get a lot of interest.
By contrast, going to a cash buyer is far quicker. For instance, We Buy Long Island Homes Fast can complete transactions and provide cash in as little as ten days.
The costs associated with traditional sales are also high. Sellers must cough up money for renovations, repairs, closing, and realtor commissions. Many also wind up incurring various closing costs, which reduce net proceeds considerably.
This reality contrasts with the flexibility and convenience of cash sales. Investors do the majority of the administration and legal work, providing you with a straightforward and hassle-free experience – just what you want when dealing with a loved one’s estate.
The tax implications of selling an inherited property can be complex, so always work with professionals. Accountants can determine whether you and the estate are paying the correct amount of tax, as determined by law.
Inheritance tax is sometimes applicable when selling the property of a deceased person. However, most people do not pay inheritance tax in Long Island.
Estate tax, sometimes called “death tax” is another inheritance tax. However, it only applies to property sold for more than $6.58 million, with rates ranging from 3.05% to 16%. You do not need to pay a federal estate tax separately.
Some people can also avoid capital gains tax in Long Island if they meet specific criteria. For example, you may not need to pay capital gains taxes if the property was your primary residence for two out of the past five years, and you haven’t used another capital gains exclusion over that period.
You may also be eligible for various deductions and credits when you sell your inherited home in New York. For example, if the inherited property was your primary residence, you may not have to pay capital gains taxes when inheriting it, as detailed above.
You may also benefit from a “step up” in basis to fair market value. Here, valuation experts estimate the property’s value at the point the original owner died, reducing capital gains taxes.
Unfortunately in New York, the state taxes the full value of the property if it is above the estate tax threshold. Sellers cannot benefit from a deduction.
Given the complexity of the tax situation in Long Island and New York, it is essential to consult a tax professional. These individuals can help with short-term capital gains taxes and avoid paying taxes you don’t need to pay.
So what have we learned? This post has taught us that the benefits of selling an inherited house for cash are considerable. Real estate investors provide a no-hassle property transaction process and a free home valuation that ensures you get money fast 2 sometimes in as little as ten days.
Call us at “We Buy Long Island Homes Fast” for a no-obligation offer and find out how much you could get for your inherited property!
Allow us to guide you through the process. Our expertise means your transaction will be easy and straightforward. Avoid the complications of selling through a realtor and sell directly to the actual cash buyer!
Please submit your property information below now to receive a fair all cash offer.
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