Selling an Inherited Property in California
Home sellers in California spent an average of 12 to 18 months selling their inherited property.
Analyzing the current California real estate market, the average time to sell a house in California is 72 days. Factors like house location, home size, condition, etc. can increase your home’s days on the market.
For an inherited house, the probate process is necessary to legally transfer the property. It typically takes up to 18 months but can be delayed by multiple heirs and disagreements.
TO SELL MY INHERITED HOUSE
How Long Does It Take to Sell?
It takes an average time of 12 to 18 months to sell an inherited property, depending on the probate process.
Taxes to Sell an Inherited Property:
You need to pay transfer tax, property tax, and capital gains tax to sell an inherited property.
Fastest Way to Sell:
Selling to a cash buyer is the fastest way to sell your inherited property as is.
Can I Sell an Inherited House in California?
Yes, you can sell your inherited house in California. Your property must undergo a probate process before you sell it.
What Is a Probate Process?
A probate is a legal validation of a deceased person’s will. Probate helps to distribute the property amongst its heirs and beneficiaries.
You need to submit the owner’s death certificate and proof of ownership during the probate process. After the completion of probate, you have to pay for several expenses such as outstanding mortgages, taxes on the property, and other bills.
An ‘Alienation Clause’ triggers when the ownership of a mortgaged property is transferred to an inheritor. So the inheritor has to pay off the full mortgage.
Almost every inherited property in California must undergo a probate process. This can take up to 18 months. This period varies state-wise and depends on the number of inheritors and state laws.
Properties Exempted from Undergoing Probate Process
Your property will exempt a probate under the following conditions:
California Transfer-On-Death Deed:
The owner can prepare a property deed to automatically transfer the property’s ownership. This deed prevents the property from going under the probate.
Receive a House in Trust in California:
As a legal heir, you can inherit a house directly without probate if the owner has placed the home in trust.
How to Sell an Inherited House in California?
Selling an inherited house is similar to selling any other property. The best option to sell your house for the most profit is either sell it through a real estate agent or sell it yourself.
Hire a Local Real Estate Agent
Real estate agents are well-versed in the market conditions. They market your property to buyers via MLS or other real estate networks to get you the most possible money for your property.
Moreover, agents can also advise you after you start receiving offers. Agents do charge a 5% to 6% service fee.
Sell For Sale By Owner (FSBO)
You can save on hefty commissions by listing your house for sale by owner. But when selling FSBO, you need to handle the paperwork and closing yourself.
You have full control over your transaction to engage with the buyer and buyer’s agent. Moreover, CA For Sale By Owner sites help you get listed faster, typically within 24 to 48 hours.
Taxes on Selling an Inherited Property in California
The Golden Gate State does not impose an inheritance tax or estate tax. However, you have to pay taxes while selling an inherited property in California.
- Transfer Tax: Transfer tax is a one-time fee the inheritor pays to the local government at the time of transferring the ownership. California imposes 0.11% of the sale price of the property.
- Property Tax: The average property tax in California is 0.71% of the total sale price of the property.
- Capital Gains Tax: The IRS (Internal Revenue Service) authority levies the capital gains tax on a stepped-up basis. So, this tax would only apply to the property’s appreciation after it was inherited.
Capital Gains Exemptions:
Know how you can exempt capital gains tax.
Selling a House in California with Multiple Inheritors
Multiple inheritors can be close family members like siblings, cousins, or anyone the deceased person chooses. So, selling a house in California with multiple inheritors is a real curve ball.
In such cases, the first step is to come to an agreement on selling or buying the property with the other inheritors. So, you can appoint a neutral party (non-beneficiary) as the head person for the sale.
The neutral party will ensure a transparent home sale process. They will ensure a fair distribution of proceeds amongst the inheritors.
What if All Inheritors Don’t Agree to Sell?
If all inheritors do not agree then the property cannot be sold. Chill! If majority of the inheritors are willing to sell the property they need to go through a probate court.
The inheritors can file a ‘partition action’ lawsuit in the probate court. In such cases, the court enforces the sale. As a result, the inheritors have to divide the proceeds among themselves as per the will.
Let’s Sell Your Inherited House
Selling your inherited house in California is a complex and time-consuming process. Your inherited home might remain in probate for up to 18 months. You also have to pay several taxes while selling your inherited home.
To get the best price for your property, we recommend you list your home with a California Probate Specialist. This provides exposure to your property to buyers and real estate agents.
Certified Probate & Trust Specialist
As a Certified Probate & Trust Specialist you can rest assured that as a Real estate professional, I have the understanding of the Probate transaction and can represent sellers or buyers in probate transactions, as well as investors looking to purchase probate properties.
