Selling a house that you have recently inherited from a family member in Colorado can be an extremely time consuming, difficult process, especially if you aren’t armed with the knowledge and skills that are necessary in order to complete the transaction in a swift and effective manner. First, property owners may become extremely emotional with regards to the property, as it will likely have some sentimental value, relating to the family member that gave it to them. Also, you have to be concerned about preparing the property for prospective buyers, and this will likely include a lot of repair costs and other related fees. On top of all of these issues, there may be existing liens against the property, or another family member that has a vested interest in obtaining equity in the home.
Having a step by step game plan will be essential to your overall success when selling your inherited property in Colorado, and it will make the process much easier and less stressful for you in the long run.
Selling Inherited Property In Colorado:
- Take a look at the local marketplace to determine if it’s a good time to sell.
- Get an appraisal and find out the actual value of your property.
- Contact local real estate agents, and attorneys, to get more accurate information if necessary.
- Research local investment companies to see if you might benefit from an “As-Is” all cash transaction.
The very first step in selling your inherited house in Denver or Colorado Springs is to take a look at the most recent reports from the front range housing data to see if it’s a good time to sell your home. Sometimes it might be a better option to hold the property and rent it out to tenants, although this comes with it’s own headaches, and is a route that many people do not want to deal with. If you do decide to rent it out, you must determine how much it will rent for, if there is an existing mortgage on the home, and whether or not the rent will cover the monthly cost of the loan. You must also not forget to factor in the property taxes, insurance, repair costs, and utility prices. If you run the numbers, and there is some cash flow left over, then it might be a good option to rent it out, if you are willing to stay in the area and monitor the property, or can hire someone to manage it for you.
Figuring out the true market value of your property is one of the most important parts of selling your inherited home quickly in Colorado, so you should spend a good deal of time on this part of the process, as it will have the greatest impact on the final sale price. It’s really not that hard of a thing to accomplish, and can be easily achieved by hiring a property appraisal expert to give you a quote, or you can simply look at other similar properties in the area to see how much they have recently sold for. Remember, you must only use properties that have actually sold on the market, and not ones that are currently listed for sale.
If your property is in bad condition, the best course of action is usually to sell to an investor. If the home is not eligible for a traditional mortgage, it will have to be bought outright with strictly 100% cash. Many sellers will still list the home with a real estate agent, and ask for a cash offer, and that offer will normally be about the same price as if they dealt directly with the private investment company themselves. The only difference is, when you are dealing with an agent, you are going to end up paying their commissions and fees which are typically in the 5 – 7% range.
Contact a real estate lawyer if needed, as sometimes these situations can be extremely complicated, and you will need the advice of a professional to make the deal work. You may need to go through probate court, and there may also be an additional waiting period for “creditor claims”, which will extend the overall length of time the transaction takes to come to fruition.
Tax Attorneys can also be an excellent addition to this process, as they can quickly determine the amount of back taxes that are owed on the property, and put the numbers into perspective. Some folks often ask us whether or not they will have to pay capital gains taxes on an inherited property. Typically, when you inherit a home, these numbers are based on when you actually take ownership over the property, and will often reflect the current value of the lot.
Here is a hypothetical situation that will clearly illustrate this point: Say you inherited a home in Denver that was purchased five years ago for $150,000, but with the recent economic boom in Colorado the home is now worth $350,000. You would then receive an increase from 150 to 350, and if you sold the property immediately, then you would not owe any capital gains taxes. However, if you decided to hold the property for a few years and it appreciates in value even more, say to $400,000, then you will owe a capital gains tax on that $50,000 in appreciation. So it all comes down to how much the value of the property has appreciated since you have taken ownership over it. If you sell it right away before it appreciates in value, then you don’t owe anything, and this is how we suggest most homeowners handle this process. Sell Your Inherited House In Colorado Now!
If you inherited the home as a gift prior to the previous owner passing away, then the basis would be $150,000. This would essentially mean that you would pay taxes on the difference between the $150,000 and the sales price. One exception to this rule is if you occupied the home for more than two years. This should give you a more accurate understanding of the inheritance and sales tax process, but you should still contact a local attorney in your area to find out more detailed information about your specific situation. Find out how to sell a house with tenants in Colorado here.
- Look at the local market to determine if now is a good time to sell your home.
- Figure out the actual value of the property.
- Get in touch with a Tax Professional for expert advice
- Make a decision if you would like to sell to an investor in an “As-Is” all cash transaction.
Selling inherited property in Colorado doesn’t sound so difficult after all!
If you need to sell your inherited house in Colorado, whether it’s in El Paso County, Denver County, Teller County, or Jefferson County, we are here to help, and our team of professional home buyers is standing by to help you with your needs!
HBR Colorado can give you a reasonable “As-Is” all cash offer in as little as 24 hours. If you’re considering selling your inherited property in Colorado, and would like a no-obligation, risk free online quote today, contact us below.