Inheriting a home from a loved one is not always ideal for the recipient.
But the chances of it happening are higher than ever.
In fact, according to Accenture, $30 trillion worth of wealth is expected to pass from older generations to younger generations over the next 30-40 years. And you can expect that property will make up a large part of that transfer of wealth.
As a result, there’s a high probability that your parents or other close relatives will leave you their property when they pass.
Deciding what to do with an inherited home can be overwhelming, especially if you don’t want to move in or become the landlord of a rental property.
If you inherit your loved one’s home and are thinking about selling, here are some helpful tips to guide you through the process of selling an inherited home in MN for a profit, without all the headache you might expect to come from the process.
The Best Way to Sell an Inherited Home in MN
1. Start Right Away
Grieving the loss of a loved one while trying to sell an inherited home, can be overwhelming to say the least.
But the truth is, the sooner you start, the better.
You have a lot of work ahead of you if you want to sell an inherited home in MN for a profit.
And, while we’ll explain the process in more depth in this article, you should also know that you’ll be responsible for:
- Preparing the home to sell
- Finding a real estate professional to help
- Putting your property on the market
- Showing the property
- Waiting for offers
- Drawing up and signing contracts
And lastly, you’ll have to close on the deal before your inherited property is finally off your hands and you can move forward.
Just remember, an inherited property must go through probate before you’re allowed to sell it.
Most states will let you rush the probate process so that legal representation isn’t required, but only if the property in question is worth very little.
If your property is worth a lot, you’ll have to wait for the executor of the will to distribute your loved one’s assets and settle all the estate’s debts. This only gets more complicated when siblings are involved, as you’ll need their permission to sell.
2. Get Some Tax Help
Selling an inherited home isn’t as easy as selling your primary residence. In fact, there are many complicated factors that play into how selling an inherited home will affect you financially.
When it comes to selling your inherited MN home, be aware of these tax implications:
- Estate Tax. Minnesota has an estate tax for estates valued at $2 million or more. This tax falls on the estate of the person that passed away. Anything that’s left over is given to inheritors. The maximum estate tax in MN is 16%.
- Inheritance Tax. There is no inheritance tax in MN. If there were, it would fall onto the heirs and beneficiaries, not the estate of the person who passed away.
- Federal Estate Tax. This tax falls on the estate of the person that passed away. The exemptions are extremely lenient, though you should consult a tax specialist to make sure you don’t owe federal taxes.
- Income Tax. Since MN doesn’t consider inherited property as “ordinary income,” you may not owe income tax on the property you inherit. You still have to report earnings to the IRS, though, which is important to know.
As you can see, there are many tax implications that play into selling an inherited home in MN. Getting professional, legal advice is always going to be your best option.
3. Assess the Property
Depending on how your loved ones maintained and upgraded the property, you may have a lot of work ahead of you to make a profit from selling it.
You should first plan to clean out all personal belongings. Keep what you want (or dole out belongings according to your loved one’s will), throw out what’s no good, and sell anything that’s leftover.
Then, evaluate the property’s condition to see where it stands as is. Is it in good enough condition as it stands to generate a profit if you sell right away? Will it need extensive renovations?
If this is something you’re considering, contact Homestead Road. We specialize in buying homes as is, for the biggest all-cash offer possible. We make the process of selling an inherited home in MN painless, so you can move forward with your life.
If you don’t want to sell your home as is, talk to a real estate professional to help you decide things like:
- What upgrades are needed to be competitive in the current housing market
- How to stage the property for showings
- What purchase price to set the home at (you may want to consult with a local appraiser)
- How to advertise the property as available
In addition, a reliable real estate professional will help you through the process of paying off any existing mortgage or other debts associated with the property. This way, you can avoid mortgage trouble and other financial setbacks.
And remember, just because you’re selling a home you’ve inherited doesn’t mean other expenses cease to exist.
For example, you’ll still be responsible for utility payments such as water, sewer, electric, trash services, gas, and more. You’ll also need to make sure the landscaping is maintained so it’s ready to show to prospective buyers.
4. Get Insured
You never know how long the process of selling your home will take. Unfortunately, most insurance companies don’t care about your individual circumstances. As a result, they’ll stop insuring a property after 30 days of it being vacant.
While this may not seem like a big deal to you (after all, you cleared the house out and no one lives there), the truth is, vacant homes are more susceptible to damage, break-ins, theft, and even squatters.
Look into some affordable vacant home insurance to protect your newly inherited property and yourself, just in case. This is especially true if you plan to invest in renovating the property so you can sell it for a higher profit.
If you’ve inherited a home from a loved one, and are looking to sell it for a profit as fast as possible, contact Homestead Road.
You’ll receive a free, no-obligation assessment of your inherited home so you know what the best option for you is.
Losing a loved one is hard enough. Don’t get stuck with an inherited home just because you don’t know what else to do. You’ll find that selling an inherited in MN can be a quick and easy process if you educate yourself and get the right team of people helping you.