When you inherit a house in Atlanta, you might have a wide range of emotions.
It can be a difficult time and you should be thoughtful as you decide how to handle the property.
You might feel attached to the house out of sentiment, finding the idea of a sale difficult.
If you do decide to sell your inherited house, here are a few tips to ensure a smooth transaction.
Prepare The House For A Sale
Do Your Homework
Before you list or sell the property privately, you will want to familiarize yourself with the property.
It’s likely that you don’t know all the ins and outs of the home.
Review all renovations and repair records and learn about any items under warranty.
Have The House Appraised
Have an appraisal done on the house so you know what you are dealing with.
Research other recent sales in the neighborhood so you can price your home to sell.
A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth.
All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home’s market value and ensure that the amount of money requested by the borrower is appropriate.
Get Insurance for the Vacant House
Even if the house isn’t being used, you will still need to have insurance for it.
Talk to your broker about a policy for vacant homes.
There are two problems with a home that is vacant greater than 60 days:
- Vandalism and glass breakage is not covered at all. In fact, newer homeowners forms often exclude any ensuing loss started by vandalism (i.e., vandals burn the house down!).
- Most homeowners insurers won’t continue to insure a vacant home. If your policy is canceled or nonrenewed for vacancy reasons, there are only a handful of insurers willing to insure a vacant home. For the customer, either the coverage is very limited but the premium is reasonable, or the coverage is as good as the homeowner’s policy but the premium cost is 4-5 times greater.
An “unoccupied” home is one that is ready to be used as a residence, meaning that there is furniture in place and utilities are set up.
On the other hand, a “vacant” house typically doesn’t have any personal property contained within it.
However, vacant homes pose a higher risk to insurance companies than unoccupied homes, because unoccupied-home claims are likely to be reported sooner than those made for vacant homes.
As a result, any damages that could occur, such as water backup in the home, would likely be less severe in the unoccupied home, resulting in a lower cost to the insurance company.
The determination of whether your house is vacant or unoccupied will have a large effect on your insurance rates.
Tips For Cleaning Up An Inherited House Of Clutter
For most people, inheriting a piece of property from a distant relative is great news because it could be sold for a great amount of cash or maybe it could be rented out for making a long-term profit.
However, what happens when you visit the home you inherited only to find mountains of clutter and trash?
Getting Past Being Shocked And Overwhelmed
If you have never seen the home of a hoarder, you may be shocked and wondering how your relative lived like that.
For many hoarders, depression is a great reason they give up trying to sort out all their property.
Once the piles of stuff start becoming too much, many hoarders feel overwhelmed and do not know where to start, the same way you may be feeling when you stand in the front door for the first time, trying to figure out what to do first.
The good news is you can clear out the stockpile of unwanted property simply by having a plan.
Making A Plan To Clean House
The first step you will need to take when cleaning out an inherited hoarder’s home is to rent a dumpster.
You might even consider renting two dumpsters.
When the dumpsters arrive, have one place as near to front door as possible and the other placed as near as possible to the back door.
Make A Cleaning Path
Start cleaning out property right at the front door and work your way in.
Remember to take your time, especially when it comes to paperwork.
Saving important documents like deeds and banking information may be invaluable to you later on.
If you find any old photos, you might want to keep them as well.
Placing a plastic tote near the front door for the items you need to keep is a good idea.
As for the rest of the stuff, taking a bag out at a time to the dumpster is the best and safest way to clean out the home.
For some people, the time to clean out a hoarder’s home was long and tedious.
While you may end up working on your inherited home for several months, just remember that by following the path you started at the front door, you will soon find you have reached the other side of the house.
Consider as well hiring professional hoarder clean-up crews for helping you with the biggest part of the property.
Cleaning the home might be difficult for you.
Consider selling to an investor like Breyer Home Buyers that will buy the house with the junk in it after you have removed the personal possessions from the home.
Yard Sale
Many times, people will hold an estate sale to help get rid of all of the items left behind in the home.
This is also a great opportunity to let people know the house is for sale.
Carefully sift through what is left behind, selling the items that nobody wishes to keep.
Don’t be hasty and sell things of sentimental value.
You will likely regret it down the road.
What If There Are Multiple Heirs?
When there are multiple heirs to an estate, one person will be named the executor of the will, and be in charge of the financial transactions regarding the property.
All parties will need to sign off on the sale before it is final.
Heirs can choose to buy each other out before the house is sold.
If the heirs cannot come to an agreement, on what to do with the house, the court will likely order the house auctioned off or sold.
Consider Selling The Property Directly
When you inherit a house, and you decide to sell it, it’s not likely you will want to sink a bunch of money into the home.
By selling direct, you will be able to liquidate the house, without having to pay upfront.
Listing the house comes with many costs.
With a direct sale to an investor, you can avoid repair, marketing, and listing costs.
Plus, you won’t have to pay an agent their commission for selling the home.
By selling directly, you will be able to save time and keep your cash in your pocket.
It will also help if there are many heirs to a home.
Selling direct will provide a quick and easy process for all parties involved.
Be Prepared For The Tax Man
The bad news:
Unfortunately, home sale tax exclusions do NOT apply to inherited houses.
Normally, if you own a house for two out of five previous years, you benefit from this tax exclusion.
However, if you plan to live in the inherited house for two years, and then sell it, you can still benefit from this exclusion – but many people choose to sell their inherited house right away.
The good news:
Those who inherit a house and sell it DO benefit from the stepped-up tax basis.
Normally, proceeds are calculated using the house’s purchase price + home improvements made to the house.
When the house is inherited, however, the tax basis is the fair market value at the time of the owner’s death.
If the house appreciated dramatically, this prevents those who inherited the house from owing substantial taxes.
Should You Hold On To It?
You don’t want to find yourself with a case of sellers remorse.
Take the time to weigh your options before selling.
Consider not only your feelings but the feelings of other members of your family.
Try to come to a consensus on what to do with the property and remember, nothing is worth fighting with your family over, especially after going through such a difficult time.