The process of selling inherited property is very similar to selling property you acquire through a purchase. Once the estate is settled and the land is officially yours, you can market your land however you choose. Selling land is typically less complicated than selling a house, but depending on where the land is located and how quickly you want to sell it, you may want to hire a real estate agent to handle the sale.
Ensure that your name is on the deed of the land -- and that the deed is recorded at the recorder’s office in the county where the land is located. When you inherit property, the executor, or administrator, of the estate will issue a deed transferring the ownership of the land to you. However, this will not occur until the estate is settled. The process of settling an estate is known as probate. During the probate process, the debts of the deceased are settled before any property is distributed to the heirs and beneficiaries. You cannot sell your inherited land until you are issued a deed and probate is complete.
Read More: How to Sell Land by Owner
Contact the city or township where the property is located to determine your property tax liability on the land. Until the day you close on the property, you are responsible for paying the property tax on the land. Failure to pay may hold up the sale until you do. Be sure to keep current with your payments.
Determine your tax basis in the property. For tax purposes, your basis in the land is equal to its fair market value on the date of death of the person from whom you inherited it. Your capital gain will be the difference from the value of the land on this date and the price for which you sell it.
Contact some local real estate agents and have them determine the value of your land. Compare the selling prices they suggest. Also check local listings on your own to determine the price of similar parcels of land. If you're still unsure of your asking price, you can hire an appraiser, who will take the data from recent sales, as well as from the assessor's office, to calculate the current market value for your land.
Hire a real estate agent to market and sell your property. You can try marketing and selling your land on your own, but hiring a real estate agent who specializes in land sales can usually get the property sold faster. Unless you have land that is in a prime location and you're confident that the sale will go quickly and easily, it's generally a wise choice to let a reliable real estate handle the sale. However, keep in mind that an agent's commission may be negotiable. If an agent is eager for a listing, she may agree to take less commission than her usual rate.
Record any capital gain from the sale of your land on your next tax return. If you sell the property soon after you inherit it, you probably won't have any capital gain.
- HG.org Global Legal Resources: Probate Overview
- Free Dictionary. Recording of Land Titles
- Creative Real Estate Options: When Selling a Property, Who is Repsonsible for the Property Tax
- Internal Revenue Service: Publication 551 – Basis of Assets
- Free Dictionary: Real Estate Appraisal
- US News & World Report: Selling a House Without an Agent
- Chris Clinton/Stockbyte/Getty Images