Are you are thinking about selling your inherited property? If so, you might be wondering, “Is there a holding period before selling my inherited home?” This article will answer that question. You might be surprised at what you learn…
Disclaimer: We are not attorneys or accountants. Therefore, the advice provided here should not be considered legal or tax advice. For such advice, please consult the appropriate professional. Nevertheless, this post addresses some of the questions you may have. It may also raise other questions you can discuss with your lawyer or accountant.
If you’ve inherited a property, you’re probably trying to decide what to do with it. If you’re thinking about selling it then you’re probably wondering, “Is there a holding period before selling my inherited home?”
Great question. There are a few things you need to know .
Is There A Holding Period Before Selling My Inherited Home?
Probate Versus Inheritance
In general, an inherited property is what you have when someone passes away and leaves you their property. Probate is a stage along the way. It’s the step of proving the will and making sure that the right heirs get the property.
So let’s answer the question “Is there a holding period before selling my inherited home” while it’s in probate? Yes . . . because it’s in probate. If someone leaves you a home, as long as it’s in probate, you might not be able to sell it right away. The will is still being “proved.” There could be other heirs contesting the will or other complications.
However, once probate is complete and you (and any other designated heirs) fully own the inherited house, then you can likely sell without any further waiting.
There Is A Holding Period (But Not What You Think)
There is a holding period with inherited homes but the holding period doesn’t mean you can’t sell. It’s simply a term used to describe how you will be taxed on the property – and it depends on when the deceased passed away.
However, in most cases, this won’t prevent you from selling the property. But talk to an accountant to see if the holding period will impact how much tax you pay.
There May Be Other Factors
While there isn’t likely going to be a holding period on the inherited house itself that will prevent you from selling, there could be other holding periods that will make it more challenging to sell -– such as if the house still has a mortgage. But in many cases, these can be sorted out and, in the long-term, shouldn’t keep you from selling. (We recently bought a house that had a line of credit on it. When we bought the house at closing, the settlement company simply paid off the line of credit, just as if we’d been buying a house with a mortgage on it. It’s usually not a problem at all.)
A stickier complication is when there’s a problem with the title. But nearly any problem can be overcome. It just takes some patience. And that’s an advantage you have in selling to a professional house buyer: We have the patience and the resources to help sort out those thorny problems. A typical “retail” buyer–someone using a real estate agent, for example, and hoping to move right in–may not have the patience or the flexibility to wait until complications are cleared up.
So, if you inherited a house and are thinking about selling it, and now you’re wondering, “Is there a holding period before selling my inherited home?” here’s the good news: You probably don’t have to wait to sell. You can get that process going right away. However, be aware that there could be other factors that may delay the sale, or that could affect the tax you’ll have to pay when you sell.
In one of our recent purchases, the county we bought in imposes a transfer tax if an inherited property is sold within 6 months of the heirs receiving it. But the seller was protected. She’d signed an agreement with us where we promised to pay all closing costs. Neither we nor the sellers knew about that extra tax (we do now!), but the deal was that we’d pay all closing costs. And we did, including that extra tax. The seller was extremely happy and relieved.
Tip: When dealing with a professional house buyer, check the sales agreement to see if they’ll pay all closing costs. You don’t want to get an expensive surprise at closing!
Here’s a fast solution for you: If you want to sell your inherited house as quickly as possible, give us a call! We’ll give you a fair, fast all-cash offer to buy your inherited house in as-is condition.