When selling an inherited property in Rhode Island, you may encounter various financial considerations. Here are some options and considerations to explore:
- Understand the Tax Implications:
- Be aware of the tax implications associated with selling an inherited property. Inherited properties generally receive a stepped-up cost basis, which can reduce the capital gains tax. However, it’s essential to consult with a tax professional to understand your specific situation and any potential tax obligations.
- Probate Process:
- If the inherited property is subject to probate, the legal process of settling the deceased person’s estate, you’ll need to navigate through probate proceedings. Probate can affect the timeline for selling the property, and the associated costs may include court fees, attorney fees, and other administrative expenses.
- Consider Financing Options:
- If you need to make repairs or updates to the inherited property before selling, consider financing options. You could use personal funds, obtain a home equity loan, or explore other financing solutions to enhance the property’s market appeal.
- Sell Through Probate Sale:
- In some cases, selling the property through a probate sale may be necessary. This involves selling the property as part of the probate process, and the sale is subject to court approval. While this option may have additional legal requirements, it can provide a structured process for selling inherited real estate.
- Explore Seller Financing:
- Depending on your goals and the buyer’s financial situation, you may consider offering seller financing. This involves acting as the lender and allowing the buyer to make payments over time. Seller financing can attract a broader pool of buyers, but it’s important to evaluate the risks and benefits.
- Sell As-Is:
- If the inherited property requires significant repairs or updates, you may choose to sell it “as-is.” Selling the property in its current condition can save you the time and money associated with renovations, but it may impact the property’s market value.
- Consult with a Real Estate Professional:
- Seek the guidance of a real estate professional, preferably one with experience in handling inherited properties and probate sales. A real estate agent can help you navigate the complexities of the Rhode Island real estate market and provide valuable insights into the selling process.
- Consider Auctions or Cash Buyers:
- Explore the option of selling the inherited property through auctions or to cash buyers. Auctions can create a sense of urgency, and cash buyers may offer a quick and hassle-free sale. However, be aware that the sale price may be lower than market value.
- Plan for Closing Costs:
- Be prepared for closing costs associated with selling the property. Closing costs typically include fees for title searches, recording fees, and other transaction-related expenses. Factor these costs into your financial considerations.
- Work with an Estate Attorney:
- Engage the services of an estate attorney to guide you through the legal aspects of selling an inherited property. An attorney can help with probate proceedings, address any legal challenges, and ensure that the sale complies with applicable laws.
Every inherited property situation is unique, and the best financial option will depend on your specific circumstances and goals. Consulting with professionals, including real estate agents, tax advisors, and attorneys, can help you make informed decisions and navigate the process successfully.
If you’ve inherited a property and you’re thinking about selling it, you might have more options than you realize. Read this blog post to find out Financial Options When Selling an Inherited Rhode Island Property…
When a loved one passes and leaves you with a property, it might be a meaningful gesture but, the truth is, an inherited property isn’t always convenient to own. There are additional bills, expense, maintenance, upkeep, and stress; it can be time-consuming.
So if you are thinking of selling, you might first be thinking about selling with the help of a real estate agent. However, you might be surprised to learn that you have options that you may want to consider as well. In fact, did you know you have Financial Options When Selling an Inherited Rhode Island Property?
First, Let’s Talk About Selling Through An Agent…
There’s nothing wrong with selling through a real estate agent but you should be aware that an agent may have you fix up the inherited property first, then there are closing fees and the hefty agent commission you’ll have to pay afterward. And, this method can take months, so some people don’t like how long it takes.
So, what are the other options?
Second, Let’s Look At The Other Options…
Option #1. Refinance
One option, which is a type of selling, is to refinance the property with a bank and use that money for other things. Although you’ll still own the house, this is a financial option that some people might consider if they are selling in order to get the money.
You can still use the house, or rent it out, and you’ll need to pay back the loan to the bank, but it’s one option to consider.
Option #2. Rent To Own
Another option is to sell the house over the long-term by selling to a tenant. Typically, these are tenants who can’t get a mortgage but want to own a house – so they’ll pay you rent and over time they’ll be able to buy the house (either by paying you an additional amount above their rent that will go toward the purchase of the property, or, by waiting until their credit is cleaned up to purchase the house with a mortgage.)
Option #3. Sell Fast For Cash
One little-known option that owners of inherited properties might enjoy is the ability to sell the house fast for cash. Instead of selling through an agent (and hoping they can find a buyer, which can take months), you can work with a house-buying company (like what we do here at Tristate Holdings 167 and they’ll often buy your house as-is for cash, usually in as little as a few days. It’s fast, simple, and doesn’t require any work.
There you have it! Financial Options When Selling an Inherited Rhode Island Property