Have you recently inherited a house? If so, you may be facing or in the probate process. Speaking from our own experience, it can seem a little overwhelming, especially if you aren’t familiar with the process. In this post, we offer a few basic tips that can be helpful if you need to sell an inherited home.
Going through the probate process usually means you’ve lost someone you love. There’s a lot to manage when you are the spouse or heir of someone who dies, such as notifying family and friends, funeral planning, and, eventually, handling the details of the estate. When you’re grieving, the last thing you want to think about is learning how to navigate probate. We hope this short piece will explain what you can expect during the probate process, and offer a few tips that may help you if you’re faced with selling an inherited home.
What is Probate?
Probate is the legal, court-appointed process in which a deceased person’s property is identified and distributed under the laws of intestacy (when someone dies without a will), or by a last will and testament that was left behind. The entire probate process, including the sale of a home, is court-supervised. An executor of the estate is identified and/or confirmed, and they are in charge of handling the affairs of the deceased person’s assets and liabilities. With the court’s permission, they represent the estate against any claims and distribute property left behind by the deceased. The executor becomes the key representative of the estate if the heirs have agreed to sell the deceased’s home. Even as the executor you aren’t able to act independently of the probate court; the sale of the home must be approved by the court to ensure it’s the best way to handle the property and that there are no outstanding claims against the sale.
Is the Probate Process Always Necessary?
The short answer is, no. Whether or not the probate process is necessary depends on various factors, including the nature and value of the deceased person’s assets, the existence of a valid will, and state laws. Not all assets are subject to probate. Some assets may pass directly to beneficiaries outside of the probate process, such as life insurance policies, retirement accounts with designated beneficiaries, and assets held in joint tenancy, a living trust, or with named beneficiaries. For example, if you establish a living trust, any real estate and other assets held in that trust go directly to the heirs you left them to without probate.
Discussing end-of-life matters can be sensitive and emotional, but planning ahead is important if you want your property to be passed on to specific individuals without a lot of red tape. You may want to seek expert advice on how to make things easier for your loved ones after you are gone. An estate planning attorney can help you ensure that your wishes are carried out and ease the burden on your heirs. You can take steps to minimize probate, or avoid it altogether, through estate planning strategies like creating a living trust, designating beneficiaries, and gifting assets during your lifetime.
The Probate Process Can Take Time
The probate process isn’t known for its speed or convenience! At best, the process takes months, and can take years, depending on the complexities of the estate holdings. If you’re an heir to an estate, the process of a home sale (for example) is easiest if you and your fellow heirs can agree on the details of the sale. Note that once a person dies, it is important to file for probate as quickly as possible. Not doing so means more money will need to be spent out of pocket to cover what are known as a property’s “holding costs,” which include things like the mortgage, taxes, utilities, etc., that must still must be paid until the sale of the property is completed. Each state has different laws that pertain to probate and you may want to consult with an estate planning attorney to determine the best approach based on your unique circumstances.
The Role of the Executor of the Estate
If you’re appointed as executor of an estate, be prepared that this role will require your dedicated attention and time. To get the estate in order, you’ll be carefully tracking down all existing debts owed by the deceased; you’ll also be creating an important list of assets such as the deceased’s bank and stock accounts, along with all the property they owned. Your role will also include communicating with the deceased person’s next of kin and/or other heirs, keeping them informed about the status of the probate and what, if anything, is needed from them.
Holding Onto Real Estate Can Cost Money
If you own a home or have owned one in the past, you know having residential or commercial real estate costs money. In the case of an inherited home, the costs of utility bills, yard maintenance, insurance, and taxes, not to mention a mortgage payment, can all add up to a significant expense each month. If you and the other heirs aren’t sure what to do with the property and get stalled on making a decision, it can help to make a list of the monthly expenses associated with the home. That will help you acknowledge the real costs of holding onto the property and allow everyone to agree that they’re comfortable continuing to pay these bills. In some cases, especially if there is ample money in the estate to continue paying the bills, it’s not a problem to hold onto the property for months while probate is progressing. But in other cases, when the bills are large or there’s just not a lot of money to put toward these holding costs, the heirs may decide to simplify their lives by selling the home.
Listing an Inherited House Through a Real Estate Agent
If this is the first time you’re working to sell a home on the MLS, look objectively at the home and any repairs needed to make the home competitive with others on the market. Keep in mind that making cosmetic updates to the kitchen and bathrooms can often bring a higher sales price. You may want to ask a real estate agent what they might recommend in order to get top dollar. After repairs and/or updates are made, it’s best to give the property a good cleaning, and stage it tastefully to attract as many people as possible. Getting a higher sales price is a blessing. However, there can be some drawbacks to listing the property on the MLS and going the traditional sales route. It can take a while to get a qualified buyer to come through and then to wait for the buyer’s financing approval from their lender. During this time, the bills related to the property will need to continue to be paid. And when using a real estate agent, remember that part of the sales proceeds will go to cover the agent’s sales commission and other fees/closing costs.
Selling an Inherited House to a Professional Home Buyer
If time is of the essence and you and the other heirs of the estate would prefer to move things along more quickly, another option is to sell the house directly to a professional home buyer. From our experience, for some, a direct home sale can make the probate process easier; it relieves the executor and other heirs of one potentially large concern (worrying about a property) and thereby freeing up more time for the executor to focus on other responsibilities. A direct home sale means you can skip making repairs, renovating, and even cleaning. In this scenario, a professional cash buyer purchases your home as-is and can usually close quickly, which can help you avoid having to continue to pay holding costs (utilities, insurance, property taxes, etc.). Selling a house you’ve inherited doesn’t have to be complicated. Working with a business with experience in probate and inherited homes like Anna Buys Houses can save you time, money, and hopefully make a difficult process a lot easier.
Dealing with probate isn’t something people usually look forward to! Estate planning can make it easier on you and your heirs and helps minimize probate, or avoid it altogether. Anna Buys Houses, is here to buy the real estate you’d rather sell quickly without the hassles of repairs, renovation, or cleaning out all the stuff. Leave the heavy lifting to us! We’re here in to answer any questions you have about the probate process and how to sell an inherited home as stress-free as possible.
