Selling An Inherited House
So you just inherited a house and you’re not sure exactly what to do it. What do you do first? Much of your initial efforts will depend on whether or not the real estate was granted to you in a Will or let in an estate. If no Will was prepared to give you ownership then the house will have to go through probate. Probate is a legal process for “proving” in a court of law the last testament of the deceased. This process settles the estate in accordance with local laws in the absence of any legal Will left behind. Simply put, it’s the process of transferring a deed from one owner to another. This process, when uncontested by heirs, is a fairly simple process and usually takes about two weeks. If contested, it could last for years.
Selling an inherited house doesn’t have to be complex but it can be challenging. If the house you inherited is unencumbered by any mortgage or liens, and if it’s in move-in ready condition then you have time to consider multiple options. This most obvious is listing the house with a realtor and selling it on the open market. You will likely have to do some clean out and will likely have to make some initial investment, either in time or money or both, to get the house ready for living. This can be more of a chore if you live in a different state.
The process of selling an inherited house in Indianapolis gets more complicated and more expensive if the house is in less than move-in ready condition. If the house has major defects, it could seriously impact your overall ability to sell. In some cases, major defects can prevent would-be buyers from being able to get financing until the defects are corrected. So, if the house needs some TLC or if the house is encumbered by a mortgage that you are now responsible for, then time is not on your side. Listing your house with a real estate broker could take upwards of six months or longer depending on the current condition of your property.
There is an option when it comes to selling difficult inherited houses. Real estate investors like Ittenbach Capital, purchase houses for cash in Indianapolis. We prefer a house that needs a little TLC. We buy houses for cash, make any necessary repairs or updates to the property and then sell the house for a profit.
Working with the right partner can make all the difference. Not all real estate investors are created equal or are equally equipped with the knowledge and experience to guide you step by step through the process. At Ittenbach Capital, we will help guide you through the process and help you understand all the variables associated with selling an inherited house. We will have you establish what its current or as-is value. We will help you identify what repairs or updates are required.
In the end, selling houses that need work or a little TLC is best reserved for real estate investors. Real estate investors like Ittenbach Capital, can purchase your inherited house fast for cash and will pay all your closing costs. If time isn’t on your side then working with a real estate investor may be your best option. We can move quickly through the sales process, often times closing in two weeks or less.
Navigating The Probate Process
Probate is the court process by which a person’s Last Will and Testament are proved valid or invalid, and the legal process wherein the estate of a decedent is administered. If a person dies with a Will, then he or she is said to have died testate. The Will names an Executor, (the updated term is Personal Representative or PR), to administer the deceased person’s Will. When a PR administers a deceased person’s Will, the PR is winding up the affairs of the decedent, including collecting all of the decedent’s assets, paying the decedent’s final bills, filing final income tax returns, and distributing the assets according to the wishes spelled out in the decedent’s Will. The PR acquires his or her authority to act on behalf of the decedent by receiving Letters Testamentary or Letters of Administration from the Court.
If a person dies without a Will, then he or she is said to have died intestate. Since there is no Will and no person named as the PR of the estate, an individual is appointed by the Court as a PR to administer the decedent’s estate. The PR performs the same duties as a PR of the estate of a decedent with a Will, however, the estate assets are distributed according to the laws of the state in which the decedent resided at death. In this example, we are referring to Indianapolis probate laws and processes.
Expenses will vary from state to state but in Indiana, the expenses related to the Indiana probate process are court costs, attorney fees, and PR fees. The court costs consist of a filing fee, $200-$300, a publication fee, $50-$100, and potentially a bond, depending on the value of the assets of the estate. If a family member is acting as the PR, he or she may decide not to take any compensation for his or her services; however, the process is time-consuming, and the PR is entitled to fair and reasonable compensation. If the PR accepts a fee, then the PR reports the fee as income on their personal income tax return.
Indiana and most all other states provide for supervised and unsupervised administration of the estate. Supervised administration of the estate means that the PR must file a beginning inventory of all the assets of the decedent within 60 days of being appointed by the Court as PR, obtain approval from the Court to sell real estate and distribute assets, file a final accounting with the Court, and obtain approval of the final accounting and payment of attorney fees and PR fees, if any. Unsupervised administration of the estate means the PR does not need to file an inventory with the Court or obtain permission to sell real estate, make distributions, or pay attorney or PR fees. (The PR still prepares an inventory and final accounting, however, they are not required to file them with the Court.)
Indiana requires all estates to remain open for a minimum of three months to allow any creditors to file a claim against the decedent’s estate to be reimbursed for any debts that the decedent may have owed the creditor at the time of the decedent’s death. If the creditor fails to file a claim within the three-month time period, then the creditor is barred from being reimbursed for the decedent’s debt. The PR must provide notice of the decedent’s death to all known creditors at the opening of the estate in order to start the clock, barring the creditors from getting paid. Depending on the complexity of the estate and types of assets owned, most estates can be administered within one year.
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