Getting property in inheritance is the most wished-for, and it comes with plenty of luck as well. Selling inherited property can be an additional expense; a substantial chunk goes to the commission of the real estate agent. People who sell inherited properties tend to give
- 5% to 6% in commissions
- 4% in repairs
- 8% to 10% to closers and property taxes
The total sums usually exceed $10,000, which is a lot of money to give. But if we forget this aspect for a while, selling an inherited house in California now can be the best decision due to the increased demand; the profit increased by 13.3% in California. To enhance the profits, go for FSBO and list your house for a flat fee.
What is an Inherited Property?
As the name indicates, inherited property usually comes into possession or is an asset that a deceased person passes down to their heirs. The legal document is known as a will, and this often involves probate court. This court declares the will and disperses the assets to heirs as per the will by following the protocols.
Selling a house in probate in California comes with its own set of legal and tax regulations, which need to comply with relevant authorities. Comprehending the legal process helps you to make an informed decision and ensures a smooth process.
Measures to Take After Inheriting a Property in California
There are several steps that you need to take after you get the inherited property.
- Complete the Probate Process: Probate is a legal procedure that declares the death of the person and announces the will. This is a time-consuming process, and you will get a resolution in a few months to a year. Probate decisions need to come out before you put the house on the listing.
- Do a Property Evaluation: Do a thorough checking of the house, starting with the foundation, wiring, and structure. Otherwise, you can do the appraisal after getting to the house.
- Clear Liens and Debts: In case the property you have inherited has some mortgage or tax payment dues, settle them before listing the property.
- Initiate the Selling Process: After getting all the above steps done, you can start the process of selling a house in California.
Can I Avoid the Probate Process in California?
Comprehending the fact that the probate process is more prolonged and more critical, you must wait anyway before listing the property for sale. However, getting past the probate process could be beneficial.
Here are the methods that can be used to transfer the property directly to you in California:
- Start a Revocable Living Trust: This gives an opportunity for the person to have control of the property being alive and transfer it to the heirs upon death. Adding the assets to the living trust is the easiest way to skip the probate process.
- Utilize Join Ownership: This is an official way where there are multiple owners of the property. In case one of the owners dies, others will automatically own the property without any probate course involvement.
How to Sell an Inherited House in California?
After getting the entire ownership of the house, you can start the selling procedure. Selling an inherited home in California is the same as selling any other home. Here are a few ways to sell inherited property.
For Sale by Owner (FSBO)
In FSBO, you can sell an inherited house in California without involving real estate agents. This allows you to have complete control over the sales procedure. This way, you will be able to save approximately $10,000 by skipping the real estate agent.
To make a successful sale, you need to list your house on a free but good listing website. This gives an opportunity to your home on MLS to get the same exposure that the real estate agent promised you.
Choose a Discount Real Estate Agent
Discount real estate agents have a lower commission rate than traditional agents. They provide the same services as the regular ones with the added benefit of a lower commission rate of 1% to 2%.
Sell Your Inheritance House to iBuyer or a Cash Company
If you want to sell the property for urgent cash, then iBuyer is the most suitable option. They buy the houses from the owners and offer quick cash. ABL Houses buy inherited homes and provide quick cash.
However, the major drawback is that cash companies pay 50% to 70% of the value of the house.
Conclusion
Getting the inheritance property involves the probate court, which takes 6-9 months. Moreover, there may be estate, property taxes, and capital gains, which can lower the profit margins.