How to Sell an Inherited Property in Texas?

Selling an inherited property can be an emotionally challenging task. Usually, the inherited house is an old one and in poor condition. You need to take care of the home and the legal matters. Although, inheriting real estate can improve your financial situation, keeping the home can be a hassle. Unless you want to move into the house, you wouldn’t want to keep the property because it is challenging to manage real estate assets. Furthermore, there are property taxes you will pay if you keep the house. Selling the home now also allows you to benefit from the Capital Gains Exemption. Read more to learn how to sell an inherited property in Texas.

Get a Home Inspection Report

You need a home inspection report and an appraiser’s report to figure out the status of your house. A home inspection report will include the current situation of all critical components of the property like heating system, air conditioning, electrical and plumbing system, attic condition, insulation, floors, doors, windows, the foundation and structural integrity. This report will guide you about necessary repairs and their expected cost. Appraiser’s report will give you an assessment of the current fair market value of the home. This information will help you in making an educated decision.

Keep the House

If the current sale price is not what you expect and you have an expert opinion that the property will appreciate in the future, then it is a wise decision to retain the house for some time. You need to consult real estate experts for this decision. As always, our expertise and help are available to you.

Take Care of the Property

An inherited house is rarely in excellent condition. If you neglect the old house, these problems will expand, and the house will lose its value. You need to take care of it. Some systems may require immediate maintenance, and some may be malfunctioning. By taking action at the right time, you can save yourself from the trouble.

Inherited property with Mortgage attached

Some inherited properties are mortgage free, but if the house is on a lease, you need to find a solution. Most mortgages have “due-on-sale” clause in their agreement but according to Garn-St. Germain Act, in case of inherited properties, the lender cannot demand to pay off the mortgage before transfer. Therefore, you may continue the loan under the same conditions. If you cannot afford mortgage payments, then you can consider options like refinancing, renting or selling the house. In this case, you cannot sell it as is. You need to get the mortgage out of the way. Once the house is mortgage free, you can sell it at a reasonable price.

Review the Tax Scenario

If you want to retain the inherited property, then one important thing to consider is your annual property tax. Texas residents pay highest rates of real estate taxes. According to WalletHub study, Texans spend an average of $3,327 in real estate taxes, which is fifth highest in the US. The good news is that there is no inheritance tax in Texas. Only if the property value is over $5.34 million, then the U.S. Treasury collects 40% tax. As most houses are valued less than this threshold, so you would mostly have tax benefits on the inherited property.

Capital Gains Tax

The law states that the base price of your house is calculated when you inherit the estate. For example, the original buying price of the home was $200,000. When you inherited the estate, its price was $500,000. Now according to this rule, $500,000 is your basis (buying price) for tax purposes, and you will pay any capital gains tax over and above that value.

Review All Your Options

Considering all of the above points, you can decide whether it is better to sell the house or keep it for some time. Depending on your circumstances, the option of keeping the house, may or may not be a feasible one.

Sell Your Inherited House

Call Habitat Developers to sell your inherited house in next 14 days. We will buy your home as-is for a cash price. You do not have to make repairs. You do not even have to clean out the house. We will take care of everything. There are no realtor commissions or closing costs to pay. Call us for a fair-cash price offer and will buy your property in next 14 days.