Quick Guide to Selling An Inherited Home for The Family Left …kcmohomebuyer.com/wp-content/uploads/2011/03/Guide-to... · 2013-11-04 · Quick Guide to Selling An Inherited Home

Inherited Properties

Quick Guide to Selling

An Inherited Home for

The Family Left Behind

www.kcmoHomeBuyer.com ¦ 816-200-2198

kcmoHomeBuyer We Buy Houses!

Quick Guide to Selling Inherited Homes

To learn more about selling your house, visit us at:

www.kcmoHomeBuyer.com/Probate

Your loved one has either passed

away . Our condolences to you.

We have gone through that process

ourselves and know it is a very stress-

ful time for you. Not only do you have

to deal with the death of your loved

one and the arrangements, but now, if

you are reading this guide, we will as-

sume you have a house and all the

contents that you need to deal with.

We have been through this process

several times both as the heir to the

home as well as the company buying

the house and we have put together this guide to help you.

There are several major areas that we want to take a look at:

1. Having the Ability to Sell: This is where you have to look at how the house was titled, was it in trust, does

it need to go through probate, how many heirs are thee, when can you sell it.

2. Getting Ready to Sell: This is the time consuming and often emotional process of cleaning out all the con-

tents of the house and making any repairs or updates to make the home most sellable.

3. Options for Selling the Home: There are many ways to go about the process of selling the home and there

isn’t one right way. The correct way will depend on the house, the financial situation and the heirs needs.

4. Taxes on the Sale: Last is the need to consider taxes that may or may not need to be paid.

We will take a practical look at these four factors and give you some examples that we hope you find helpful.

If you need assistance through the process or have a question, please feel free to give us a call.

We do purchase homes across the Kansas City Metro and have purchased numerous inherited homes. So we

have resources for every step of the process.





Can You Sell?

The first step is to determine if you can in fact sell the home

you have inherited. There are a bunch of factors here that we

will go into over the next few pages:

How was the property owned prior.

Do you need to transfer ownership to your name.

Does the property need to go through Probate Court.

Is the Home a part of a large or small estate.

Are other people entitled to the property.

There are numerous questions our home sellers have in this

situation and we will usually direct you to your attorney or to

our title company who can answer all of your questions and

help you through the process.

Probate: legal process

that takes place after

someone dies.

Includes:

Proving the will is val-

id.

Identifying and inven-

torying property.

Appraising property

Paying Debts & Taxes.

Distributing the Re-

mainder.





1: Revocable Living Trust: As Property is owned by the trust, the trustee—not

you—can easily transfer ownership to family and friends.

2: Joint Tenancy : Several different forms of Joint Tenancy, but the basic premise

is that when one joint tenant dies, the property passes to the other owners.

3: Gifts: Giving away property before you die is a gift and simply avoids the whole

probate process.

4: Small Estates: Almost every state offers short cuts through probate - or ways

to avoid it altogether for small estate, but this will vary state by state.

5: Claiming Property with Affidavits: For small estates, an inheritor can some-

times prepare a short document stating they are entitled to a property under a

will or state law.

6: Simplified Court: Quick court procedures for small estates, often can be han-

dled without an attorney.

7: Do Nothing: Not really the correct course of action, but often times we have

seen the heirs do nothing, just continue living in the property.

8: Full Probate: For larger estates or estates with a lot of messy bills, heirs and

other legal issues. Handled by an attorney.

Source: Nolo.com

8 WAYS





Small Value Homes: We have purchased

numerous homes of very low value where

the family member (s) provide the death cer-

tificate to the title company and prove that

they are the only heirs. The title company

does a bit of work and the property has

closed with out any probate court issues. All

heirs must sign.

Parent’s Home: One of our parents

passed and part of her estate did need to go

through probate. The court allowed the sale

of the home, with the proceeds of the sale,

held in a bank, going through the probate

process. A bank account is much easier and

cheaper to manage, does not rack up taxes

and insurance and is not in danger of burn-

ing down.

Multiple Heirs: We find this from time to

time where there are multiple heirs. It is im-

portant to know that for example a brother

and sister inherit. They both have a spouse.

Not only do the brother and sister have to

agree and sign off on the contract and the

closing documents, but their spouses do as

well.

With one property we attempted to pur-

chase, all heirs were in agreement to sell ex-

cept the grandson who was living in the

house rent free. Grandson was tearing up

the house, not doing any maintenance or

paying any of the expenses and because he

was not paying anything he did not want to

go anywhere. They could not sell with out

him signing off as one of the heirs.

One option we would have had was to buy

out the interest of all the other heirs in the

property and then we could have dealt with

the grandson, eventually forcing him to sell.

The Messy Estate: A property this past

year was in terrible condition, had several

thousand in back taxes and other issues.

The deceased had no children so his elderly

brother had inherited. For some reason

their attorney advised them to take the

$5,000 house through the entire probate

process and had multiple errors on the attor-

ney’s part through out the process. The de-

lays cost the heirs attorney fees and in-

creased the cost in taxes. They were basical-

ly giving us the house as we were paying

$2500 that just covered the back taxes and

the closing fees at the title company and a

small life insurance policy paid off the multi-

ple judgments against the property as well

as the attorneys fees.

Lesson we learned here is to consult with a

title company before selecting an attorney to

make sure you have one well versed in the

court processes to save time and money

spent in doing things several times.

Rights to Sell - Some Real Examples





We have learned a few things along the way in our past 13 years of buying and sell-

ing.

First always consult with the title company. More often than not, they can help

you through much of the red tape for next to nothing, while the family attorney is

going to be charging you $200 an hour. If they can’t handle all the issues, they

often have an attorney on staff or can refer you to one or two excellent attorneys

that are expert in the process and will save you time and money.

Second. If you do go with an attorney, don’t pay them to draw up contracts or the

deed. You can often get basic sale contracts off the internet, from a Realtor or if

you are buying from someone like our firm, we can write them for you. By all

means have your attorney review them, but don't go to the extra expense of hav-

ing them draft them. And the title company will only record the deed they draft, so

if the attorney does one too, it usually goes in the trash, so save your money.

Third, a power of attorney dies with the person. We have many sellers who come

to us that have a power of attorney over the deceased. And while that will work

fine while your loved one is sick or in the hospital, as soon as they die, it is no long-

er valid. So if you are going to get a power of attorney, you might consult with the

attorney to find out how to get all property in your name before the pass, rather

than waiting till after.

Timely tips





After collecting the 3 or 4 keep sakes that they want, most heirs are faced with

a house packed with stuff. What can you do with it?

Nothing: Is a very viable option. Leaving everything in place and allowing the

person who purchase the home is one way to go. Depending on how you de-

cide to sell it, however, this method can cost you in sales price. This is an ex-

cellent option if the home is not in the best of condition or is very dated as the

buyer of this type of home is used to dealing with stuff.

Garage Sale: More often than not, this is probably the best option as the av-

erage persons stuff us very used. Separate out items that might be of value

and take to a collector in the case of gold, jewelry, collectibles or antiques. Or

if the items are new, like appliances or furniture you might take photos and m

market through Craigslist.com for a bit higher sale price.

Estate Sale: If the contents of the home might be

of more value, you might consider an estate

sale. The average Estate Sale company will

assess the contents, market them and

conduct the sale for a cut of the pro-

ceeds, usually somewhere around 1/3.

Auction: Works the same as the estate

sale. Just accelerates the process into

a few hours. Might be a better option

for contents with more value.

Donate: This is an option that we use in

many houses we buy when the seller leaves

behind belongings. We have a local contact from a

thrift store that will assess the contents and if there is

enough items of value to the thrift stores customers, they will come in and

clean out the house and take the items back to sell in the thrift store. The

items go to good use with deserving people and the thrift store makes a few

dollars to stay open, and your house gets cleaned out.

Dealing With Stuff





1: Clean & Tidy: Spending some time scrubbing the home will help it show its

best. The less clutter and dirt, the faster home will sell and for more.

2: Good Repair: Fixing all those little things that we all live with and intend to

get to someday is a must. If the doorbell does not work, what else is broken.

3: Updated: Taking time to paint with a neutral updated (not white) color

scheme with a professional paint job can also help.

4: Kitchens: When we buy estate houses, one of the main rooms we spend

money on is the kitchen. We update from top to bottom.

5: Bathrooms: The 2nd most important update after the kitchen is the bath-

rooms. Fresh and Modern Spa Like Bathrooms sell houses.

6: Mechanicals: We often see that the homeowner has updated electric,

plumbing, furnaces and air on a regular basis, but if not, these are a must.

7: Structure: Next on our list of most updated items are roofs, windows and in

some cases the siding. If they are older then 20 years old, we replace.

8: Finishes: Are the light fixtures, doors, door knobs, pulls, outlet covers, vent

covers clean and of the right color.

9: Foundation: If the foundation has issues, this can be very costly and scare

the buyer. Be sure to get an engineers report and make repairs as needed.

10: Landscaping: Usually the overgrown yard is overlooked, but trimming bush-

es and trees helps and making repairs to porches and deck will help.

10 For Top $





Selling “As-Is”?

We buy many houses in their “as-is” condition meaning the

heirs came in and took out the items they wanted and then

turned the house over to us. They didn’t fix or clean anything.

But when is this the best option?

If the home in question is newer, say less than 5 to 10 years

old or if the home has had major updates to the systems like

roof, furnace, AC and windows in the past 10 years and up-

dates to kitchens and baths in that same time frame, if mak-

ing the most money on the home is the goal, then by all

means take the time to clean the house, clean or replace car-

pets, paint or touch up the walls and fix anything that is bro-

ken. Then list the home with a Realtor for top dollar.

If the home in question is in good condition but not in

“newish” condition then a judgment call needs to be made.

Clean house with newer carpet and fresh paint will make the

house sell faster sometimes, and other times it might not. I

would definitely say if top dollar is the goal, get an offer from

an investor buyer like our company as well as consult with

several Realtors to see what they could sell if for and how

much it would cost.

If the home has not been well maintained, has not had an

update in 20 years or is in down right bad shape, selling as is

will be the best option. We buy many a house where the

heirs spent time and money making repairs, but they paid too

much for them, didn’t get the best workmanship, or spent the

money on the wrong things. Then listed with a Realtor and

could not sell. For example fresh paint and carpet didn’t

make sense when the kitchen cabinets were falling off the

wall. Call us first.

When we buy in “As-Is”

condition we can make

you an all cash offer clos-

ing on the date of your

choosing with either you

cleaning out the house or

leaving all the stuff.

If you would prefer to re-

ceive a monthly income

stream, we can let you be

the bank and finance us

over time. Which ever is

better for you.





Is house in decent condition and you want to make the most out of the house in the fastest amount of time, these basic tips can help.

1: Clean Out Closets: Closets packed with stuff do not show well and Closets packed with old stuff, can contribute to the “old smell in a house.

2: Clean Out Cabinets: Either clean and organized or empty. Again this helps with smell and makes it appear there is more storage space.

3: DeClutter: Time and time again we sell houses listed for sale for months and months and when we look at the photos we see every flat surface, walls in-cluded packed with stuff. Pack it up & patch the nail holes.

4: Staging: A few well placed pieces of modern furniture can show buyers how to arrange furniture and create an inviting feel over a vast empty room. However if you have ugly furniture, hire a stager or leave empty.

5: Smell: We mentioned smell. We often see a house that is vacant or recently lived in by an elderly person has an “old person” smell. Not sure why, but it needs to be addressed. Cleaning Helps, Baking Apple Pies Helps.

6: Shampoo Carpets: If the carpet is still in good condition rather than replac-ing, get it cleaned. Or if there are good hardwoods underneath, remove the carpet and polish up the floors. Even with a few stains, hardwoods are better.

7: Magic Eraser: If you are not going to paint, invest $3 in a magic eraser at the grocery store and scrub scuff marks off the wall.

Low Cost

Fixes 7





The next question you need to consider is just what is the property worth?

The value of the property will be directly related to three things:

1. The location of the property,

2. The condition of the property,

3. How fast you need to sell.

The first place you might want to consult would be Zillow.com, but don’t take

the “Zestimate” as the end all and be all. Dig a little deeper and pull up actual

house address in your area that have sold, look at the photos, drive by them

and compare them to the property you have to sell. This will help you deter-

mine value. Keep in mind that bank owned homes or houses that sold as a

distressed sale, will typically always sell for less as they are

distressed.

Then compare your condition to the homes

sold. If the typical homes you are seeing

are in average condition or look like a

magazine and the house you have for

sale needs work, you are going to have

to lower price for needed repairs. You

may want to get an inspection and

make repairs per the inspection, how

ever keep in mind if they find a major

problem, that you don’t have the time or

money to fix, that it becomes an item that

you must disclose to prospective buyers.

Next consider how fast you want to sell. If you have the

time to wait out the sale through typical Realtor Channels, you will sell for

more. But if you want to sold fast and / or want to sell with all contents, you

are often going to have to settle for a lower price.

Your best bet is to consult a Realtor for their expert advice.

Let’s Talk Pricing





Loans and Liens on the House.

If there is a mortgages or liens on the home they will need to be

paid out of the proceeds on the home. The problem arises when all

the mortgages, liens and judgments add up to more than the home

is worth. We always take our sellers straight to the title company

to see what needs to be paid. Often times if there is life insurance

it can help with these costs or other times it takes a bit of work.

Mortgage: If there is a mortgage, more often than not it needs to

be paid or negotiated down if the loan is too high.

Other times we may find a loan that was paid off many years ago

and we have to track down the lender for a release or in one in-

stance pay for the attorney to complete a quiet title suit.

Several Mortgages: This will work just the same as the first mort-

gage, we just find that there are several junior mortgages.

Judgments: When the deceased incurred bills that they did not pay

or if they were sued and lost, they may have judgments filed

against them. These also can be negotiated down or if they are old-

er, it may be that they may drop off the books after so many years

and they can be waited out.

Tax Liens: If the deceased did not pay real estate taxes or state or

federal income taxes there may be liens against the property that

also must be paid at the sale.

If you find that there are loans, judgments and liens it may come to

the point that it is just easier to clean up the title by letting the 1st

mortgage foreclose and wipe out all the other debts. Or if a family

member is just wanting a place to live, they could move in and con-

tinue to make payments on the house. Other that Real Estate Tax-

es that will eventually foreclose on the property for non-payment

and the mortgages, the other judgments and liens can sit out their

waiting forever if someone wanted to live in the property forever.

But again, in this instance, please consult an attorney for advice.

We have helped sellers

work through many situa-

tions that often times re-

quired us to work with

several attorneys and to

wait out the process over

several months.

Two different transactions

took almost 9 months to

resolve and during that

time, we worked with the

home owner to make the

process as painless as

possible.





So you are ready to sell. You have cleaned it out

and have it ready to be sold. You do have op-

tions and do not let anyone tell you different.

But again, the faster you want to sell, the fewer

options you will have.

Ask the Neighbors: Really and truly you should

do this. Possibly go door to door for several

houses up and down the street. You would be

surprised how many houses get listed by a real-

tor or purchased by us and then get sold to the

guy across the street.

Estate Sale: People who buy houses watch es-

tate sales and they are always checking to see if

the house will be sold. So if you are having and

estate or a garage sale, have a sign and flyers to

hand out to potential buyers. You might also

find that neighbor buyer this way too.

For Sale By Owner: You may want to take this

approach for a few weeks. Usually not more

than a few weeks. But if you take the time to

clean out the house and clean it up, the put a

sign in the yard that the home is for sale. Take a

bunch of photos and market it on Craigslist.com

as well as Zillow.com and a few other sites and

you may just find a buyer and save yourself the

commission. Note that if you have it priced right

or a bit below market value, less the Realtor

Commission, that you might get lucky.

With Realtor: Nine times out of ten, selling with

a Realtor will put more money in your pocket.

How ever finding a Realtor who will want to take

a listing if the house is in rough shape or if it is a

lower value home might be a tough proposition.

And if the home is well maintained, yet in need

of cosmetic updates, you may be looking at sev-

eral months to find a buyer plus another 30 to 45

days for them to inspect the property, ask for

repairs, get appraisals and get their loan ap-

proved.

To Investor with no Money: There are investors

out there who really don’t have a lot of money

and who will offer you more for the property, if

you will give them 45 to 60 days to close. They

then turn around and go out to find someone to

buy the house from them. If they can’t find a

buyer, they can’t buy from you and the contract

flips on day 59.

Investors on Terms: We like to buy this way with

the right sellers. So say you don’t really want a

lump sum up front, but would like to have the

purchase price divided up into several payments

or over 20 years. You get to act as our bank, sav-

ing us interest costs and allowing us to pay a bit

more.

Investors with Cash: We also like to purchase in

this fashion as we can close in about 2 weeks or

less or on your time. You get all your cash up

front and we get full access to the house, imme-

diately. However, as we have said before, to get

the fast closing, the price will be lower than any

of the other ways of selling we have listed. But

for many people this is the best option as they

can get the property out of their hands and out

of their hair and get on with their lives.

So you need to decide the best option for you.

Ways to Sell - Some Real Examples





What about Taxes?

Because every situation is different, we can’t give you a blanket answer. We went

to Google and started searching and got a lot of different responses.

We highly recommend you take the time to do a little research and be sure to con-

sult a CPA and or a Tax attorney about your particular situation and circumstance.

We also advise clients who may have a family member that is moving into a care

facility to start planning now to lessen taxes later as there are steps that can be

taken to make the sale of the home or disposition of other assets much easier and

lessen the taxes that may or may not need to be paid.

Costly Taxes





Insurance: note that the insurance that was on the house when it was occu-

pied, will usually become invalid after 30 days of vacancy. The policy is written

to cover an owner occupied home and once it has been unoccupied for so

many days, the insurance company will not pay a claim if it comes up. So

please consult the insurance policy and get the property occupied or purchase

a vacant policy on the home until you are able to get it sold.

Utilities: all to often here in Kansas City we find properties that the family has

turned the furnace down or off to save on gas yet they fail to shut off the wa-

ter and drain the lines. We get a hard freeze and all the pipes burst costing

$1000s in damage. So if you are dealing with your inherited property in the

winter months, keep the furnace turned on or have the home professionally

winterized to protect from damaged water pipes as well as

heating pipes if you have a steam or hot water heating

system.

Mowing: Also keep in mind that the yard

must be maintained. That means you

have to mow the yard on a regular basis

in the summer and clear the sidewalks

of snow in the winter. If you don’t

many cities will issue a fine for failure

to keep up the yard.

Vandalism: Sad, but true in this day and

age. A vacant house attracts people that

can do it harm: the neighbor kids breaking in

and having a party and damaging all kinds of

things. A homeless person breaking in to keep warm

and setting things on fire, just to create more heat and burning the

house down. And the ever industrious copper thieves that break in and steal

all copper in the pipes, the heating and cooling systems as well as the electri-

cal wiring. We have seen them several times in houses we have purchased.

Unexpected

Inherited Properties

We Buy Houses

CA$H OR

TERMS!

www.kcmoHomeBuyer.com ¦ 816-200-2198

Documents

Quick Guide to Selling An Inherited Home for The Family Left …kcmohomebuyer.com/wp-content/uploads/2011/03/Guide-to... · 2013-11-04 · Quick Guide to Selling An Inherited Home