Inherited property and probate real estate refer to real property (like a single-family home, condominium, or apartment building) that has been passed down to an individual or group of individuals after the death of the previous owner.
Due to substantial appreciation in the real estate market over the past several years, the properties held in the estate of the prior owner can have significant value. They can also be a source of stress and confusion, especially when it comes to selling the property.
When selling inherited real estate in Florida, there are a number of common mistakes that estate sellers can make, which can end up costing them time, money, and stress.
Common Mistakes to Avoid
When selling inherited real estate in Florida, there are several common mistakes that sellers should avoid to ensure a successful sale.
Non-Payment of Property Expenses
Whether the property will remain with the heirs or will be sold, expenses still need to be paid and the properly maintained to hold its value. Therefore, the estate representatives will need to continue (or engage) the applicable property services and pay the associated charges. These include but are not limited to:
- Property Insurance
- Association Dues (if applicable)
- Utilities (Electric, water, gas, etc)
- Landscaping
- Pool Cleaning
- Pest Control
- Property Taxes
Issues that can result for the non-payment of property services include the potential for deferred maintenance, the possibility of code enforcement fines and significant late fees / penalties that are assessed for delinquent payments.
Hiring Inexperienced Professionals
Depending on the complexity of the assets owned by the decedent and any advanced planning, it is likely that an attorney will be needed to review the necessary documents and file for probate on behalf of the estate. An experienced probate & estate attorney can process the case in an efficient manner, saving the estate both time and money. Therefore, all legal and title issues should be addressed before beginning to sell the property.
Consulting an experienced tax professional who is familiar with estate tax implications is a very important consideration. When someone inherits property, they receive a “stepped-up tax basis.” This generally means that the property’s value is determined as of the date of the previous owner’s death, rather than the date when they originally acquired it. As a result, any gains made from the sale of the property are calculated based on the difference between the sale price and the stepped-up tax basis.
Estate tax issues could be another concern depending on the aggregate value of the estate as well as the laws of the particular state where the probate case is filed.
Marketing inherited real estate requires a different approach than marketing other types of property. Choosing a real estate agent who has experience with inherited property and probate real estate can make a considerable difference.
Overvaluing the Property
Setting the right price for inherited real estate is crucial to attracting potential buyers and securing the best possible value for the property. Many estate representatives hire an independent appraiser to determine the property’s value or work with a qualified real estate agent to set a competitive price based on the current market environment.
The existing condition of the property is a very important aspect of determining value. With the high cost of renovations, buyers will seek price concessions for properties that are considered dated or have not been well-maintained.
One of the largest reasons that inherited properties don’t sell in a timely manner is due to the asking price being above what the current market will bear. While it may be difficult to hear, objectively evaluating the market feedback is essential, and adjusting to these conditions is important to facilitate a timely sale.
Navigating the sale of probate real estate or inherited property can be a complex and emotional process. To ensure a smooth transaction and to maximize the value of the estate, it’s crucial to be aware of common pitfalls.
Avoid hiring inexperienced professionals and ensure you have the proper authority before selling. Don’t wait too long to begin the process, as delays can lead to additional expenses and complications. Designate someone who will maintain its condition and manage the assets effectively to prevent loss of value.
By avoiding these common mistakes and seeking the right guidance, you can honor your loved one’s legacy and ensure their wishes are fulfilled with care and diligence.
Do you have a property to sell?
If you have a property that you need to sell, now is the time to call Quantum Realty Advisors, Inc. for a free, 30-minute consultation to discuss your immediate needs and how we can help to address them.
On behalf of our clients and strategic partners, we have successfully sell over hundreds of residential and commercial properties in most major markets nationwide.
Our team has an extensive network of highly experienced partner brokers who can assist with all the local requirements, and we will personally be there for you every step of the way.
The information provided in this website was derived from sources deemed to be reliable to is not guaranteed or warranted. All information, content, and materials available on this site are for general informational purposes only and are not intended to be legal, financial or tax advice. The information contained herein is not a substitute for professional legal, financial or tax consultation and should not be relied upon for any legal, financial, or tax matters. If you require legal, financial or tax assistance, please consult with a qualified attorney, financial or tax professional who can provide guidance tailored to your specific situation.
