Selling inherited land can become a headache when things don’t go according to plan. Descendants and others in line to inherit a loved one’s estate often make the assumption that selling inherited land is like cashing in on instant winnings. While there is the potential to make a profit when selling inherited land, the process isn’t as simple as it sounds. Hidden fees, unexpected costs, emotional challenges, tough decisions, and family drama can all stir up uncomfortable commotion during the process of selling inherited land.
Instead of rushing in and dealing with an abundance of stress, it’s best to take a step back before the process begins to create a more realistic expectation of what’s involved. Having an understanding of the possible roadblocks can help people feel better prepared and able to accomplish selling inherited land with less stress.
Complete the Probate Process
First things first — unless the deceased property owner already had their beneficiary listed on the deed, then the property will need to go through probate. This is a legal process overseen by the state with the purpose of officially distributing the property rights according to the deceased person’s last Will and Testament.
The executor of the estate is responsible for filing the necessary paperwork. During this time, the executor is also responsible for maintaining the safety, security, and legality of the property, including maintenance duties, paying insurance bills, and filing property taxes.
Come to an Agreement Upfront
Emotional attachment is a very common obstacle to overcome when a person decides on selling inherited land from a deceased loved one. In many cases, the property is tied to a wealth of memories and may be one of the last tangible elements that grieving individuals have to hold onto. However, if debts are owed by the deceased, it may be mandatory to sell the property as soon as possible.
Unless there are outstanding debts, there’s no rush when it comes to selling inherited land from a loved one, but it is essential for everyone to come to an agreement if there are multiple owners listed on the deed. This happens frequently when a parent leaves their land to be split in equal shares amongst their children. Encouraging siblings to come to an agreement on what will be done with the property is one of the most important steps before selling inherited land. After all, one of the individuals may want to purchase the other shares from their siblings and keep the property in the family.
Consider Maintenance Repairs or Sell As-Is
Once it’s been decided that the inherited land will be sold, all parties with a share of the property need to be transparent about the costs involved in selling the land. If significant repairs and updates are needed, determine who will be responsible, what funds will be used, and how individuals will be compensated for their time. Selling the inherited land as-is is another option, though it will sell at a much lower price.
Reserve Funds for Property Costs During Sale
Listing and selling land often takes several months. Keeping up with utility bills is essential during that time, and these bills shouldn’t come out of one person’s pocket if there are several siblings listed on the inheritance. Be sure to reserve estate funds to take care of the essentials, like electricity, water, and trash service, while the property is being prepped for a sale.
Consider the Value of Additional Assets
It’s also important to be transparent about the plans for additional assets located on the land. Heirlooms are likely to be divided among loved ones, but there may be other items that carry financial value, like working vehicles, furniture, or farm equipment. Specify intentions for these items with a real estate agent prior to selling the inherited land, and make arrangements for removal of any items that won’t be included in the sale.
The main key in experiencing less stress while selling inherited land is to have transparent communication about the realistic costs and responsibilities, which will make the process smoother for everyone involved.