While inheriting a house from a loved one can be a fantastic opportunity, it can also be incredibly stressful and challenging to navigate the web of real estate and financial considerations in accepting and selling an inherited property. Fortunately, once you boil down those considerations, you’re left with only a handful of things you need to be aware of before you can finally receive what could be a life-changing sum of money. Here are three tips for selling an inherited house in Mobile, Alabama.
Understand Your Inheritance
When you receive an inherited property, one of the most important things to do first is making sure you’re up to date with the situation on the property. It’s vitally important that you do your research to determine whether or not there’s an outstanding mortgage on the property, what outstanding bills or taxes need to be paid on the property (if any), and how much the property is worth.
The financial situation of the estate should be easy to obtain from the executor of the will from which you’re inheriting the property, or the bank managing the estate. As for the value of the property, you can use a variety of online property valuation resources to get a rough estimate, or hire a professional appraiser.
Next, you should identify how selling the inherited property will affect your financial situation under state and federal law. There are a variety of state and federal taxes attached to selling an inherited property, such as the capital gains tax, home sale tax, and others. In the State of Alabama, however, you do not need to pay any form of inheritance or estate tax, unlike other states.
Do your research and consult with a tax attorney about what taxes you will need to pay upon sale of your inherited property. You will also need to report any income you make from selling the property to the IRS as taxable income. The taxable portion of your sale will be determined through the tax basis of the property, the amount the property was purchased for, as well as the current fair market value of the property. You should follow all IRS guidelines on how to report this income.
Prepare Your House For Sale
After you’ve understood the financial situation surrounding your inherited property, you’ll need to begin preparations for selling it in Mobile. This process usually starts with cleaning out the personal belongings left within the home. Take your time with this, as the process is usually quite emotional, and you don’t want to accidentally toss out a cherished or important item. After sorting through the personal belongings of the home, you may wish to organize an estate sale in order to liquidate some of the other assets you’ve inherited inside the home.
After dealing with the personal belongings inside the inherited property, you might need to wait for the property to go through a period known as probate, if your loved one left behind a will. Probate refers to the official proving of the will, and will take at least six months up to a few years. You should also figure out whether or not any other family members have entitled rights to the inherited property. Finally, you’ll need to pick out an appropriate real estate agent to help you with the sale.
Pricing and Negotiations
Once you’re ready to sell the property, listen to your real estate agent for advice on how to price the home. You should have a rough idea of the market value of the property already. Try not to price the property too much higher than it’s worth, but don’t take less than the market value of the property either. Stay patient and negotiate with potential buyers fairly, and the process will be over before you know it!