Is it possible to legally “cash out” on an property you inherited in Atlanta (or anywhere in Georgia), quickly and easily? YES! Don’t want to hassle with choosing a listing agent, organizing showings to possible buyers that might flake out, or waiting 2-3 months to get paid? Well, you’ve found the right place. In this article I’m going to list your options, and cover what we can do with these kind of properties.
I Just Inherited a House. What Happens Next?
- Find out who’s name is currently on title. This will tell you who the owner is/was.
- Find a probate attorney. This is how you will be able to get the property in your name, to sell it.
- Start looking for your buyer. If you want to move quickly and get paid sooner rather than later, you will want to look for cash buyers or investors. Or you can go the traditional route, and hire a real estate agent to find your buyer.
- Sign a purchase agreement with the chosen buyer and set a closing date.
- Close and get paid! In Georgia, we are an attorney state. So you and your buyer will need to close at a licensed closing attorney. We like to use one who is also experienced in probate cases, so we don’t have to get 2 separate attorneys involved.
What is Probate?
Probate is a fancy term for the legal process that occurs after a person dies. That person is known as the “decedent.” If there is a valid will, an “executor” should be appointed to gather any assets owned by the decedent. This is usually the simplest route, as the attorney will follow what’s laid out in that document. If there was not a will drawn up, an administrator will need to be appointed. This is called leaving an “intestate estate” and the Georgia Probate Intestacy laws will be followed to distribute the assets accordingly.
PRO TIP: If the decedent left an intestate estate, and all heirs agree how the assets should be distributed, they can file a “Petition for Order Declaring No Administration is Necessary” and skip the probate process!
Georgia’s Intestacy laws are as follows: The spouse inherits all of the intestate estate if the decedent has no living children or grandchildren. If the decedent is survived by a spouse and children, they will equally share the estate, with the spouse receiving a minimum of 1/3rd, no matter the number of children. In the event there is no surviving spouse, children, or grandchildren, the decedent’s parents will inherit the estate. If no parents survive the decedent, the next in line to inherit are siblings, followed by nieces and nephews, grandparents, aunts, uncles and cousins in that order.
How long does the probate process take in Georgia?
Attorney Stephen M. Scriber stated that the two of the most common questions every estates & trust lawyer in the state of Georgia is asked are:
- How long does the Georgia probate process take?
- When will I receive my share of the assets from my loved one’s estate?
So how long should you account for this whole process to take? Most Georgia Attorneys will tell you 6 months to a couple years. There are too many factors at play to give a blanket time frame that applies to everyone. If there is a will, it will move quicker. If all the heirs are able to communicate with each other via phone or email, it will move quicker. Usually, the fewer heirs, the faster it can move. Any disagreements between heirs will drag out the process.
Can I sell a house before probate is granted?
Easily put, “sometimes”.. Primarily, you must go through this process before you have legal authority to sell the property. When someone is looking to sell their inherited property in Georgia, the closing attorney will “pull title.” This will show who’s name is on the deed. If your name is not on it, the attorney will need to see documentation showing that you have legal rights to sell it for whoever is on the deed.
However, there are a few ways around it. If you owned the property with the decedent with “right of survivorship,” then you automatically own the property. If the property was held in a living trust, that is another way to avoid the probate process. As stated above, when all heirs agree on how to distribute an intestate estate, you can file for a “Petition for Order Declaring No Administration is Necessary.” It’s smart to talk with a probate attorney about your options, OR a seasoned investor with experience closing inherited property.
Inheriting a property with multiple people.
Many times when a property is being passed down from a family member, there are multiple heirs. This can cause disputes between heirs regarding who is owed what, and how the assets should be distributed. As stated above, this only prolongs the process. I was featured in a book recently, “No Agent Needed: The Hottest Tips, Tricks, and Hacks from Rockstar Real Estate Investors That Anyone Can Use to Sell Their Properties Fast and for Top Dollar without a Real Estate Agent” that explains a story very similar to this. I bought a cedar siding home in Marietta, Georgia near Dallas highway, that needed to go through probate in order for me to purchase it. I won’t go through the entire story here, but a man contacted me, whose father had passed away. He told me it used to be his father’s house, but now it’s vacant. It needed a ton of work, and he lived in NC. He did not have the right to sell it because he had 4 other siblings, and 1 of them was not cooperating. Luckily, I was able to contact & reason with the other sibling, and we proceeded with the probate process. I got my attorney involved and he walked everyone through the necessary steps. We closed about 4 months later, and it was a win-win for everyone. You can see before and after pictures of this house below.
There are a few options when inheriting a property with multiple people.
Buyout: If you want to own the property by yourself, you can go through the probate process and pay off the other heirs to sell their shares to you.
Rent the property out and split the monthly proceeds.
Sell the property and distribute the net proceeds.
- Executor or Administrator can prepare house for sale on the traditional market. This will help heirs receive the most from proceeds, but will also require much more time, money, logistics with agents, repairs, showings, etc.
- Sell to an investor for a quick CASH closing. This is what the siblings referenced above decided to do. If the property you inherited has liens like property taxes, outstanding mortgages, or other issues, selling direct to an investor is your easiest/fastest option. Especially if that investor has a probate attorney in his pocket, that can help everyone navigate through the rough waters.
A large percentage of inherited homes are sold to investors every year. We recently bought one from a man named Scott, who inherited a home in Cobb County from his father. He was not in the position to fix it up himself, so he took the quick cash and moved on. Sometimes the heirs to a property don’t even live in the same state! For these cases we offer a virtual closing option where the seller doesn’t even have to show up! We can wire their funds to a bank account of their choice.
NO ESTATE OR INHERITANCE TAXES ON PROPERTY IN THE STATE OF GEORGIA??
Luckily, Georgia is one of 38 states with no estate tax! Georgia also does not have an inheritance tax! This is good news for you. It means more money in your pocket. One tax that might pertain to you is the Federal estate tax. However, unless the estate you acquired is over $11.18MM (rate in 2018) you won’t have to worry about it.
Now, capital gains taxes do apply, but I have good news here too. It’s much less than you would be charged for flipping a home that you bought and sold like we do.
Normally you’re taxed on the amount between what you bought the property for, and what you sold the property for. But if you inherit the property, your taxed on the amount between the current appraised value of your home, and what you sell it for. PRO TIP: If you inherit a house, and sell it for anything less than the current appraised value, you will not have to pay any capital gains taxes, and can actually deduct the loss, writing off up to $3,000 per year!
Selling an inherited house that requires minor (or major) repairs.
Has the house you inherited been sitting vacant for a while and in need of repair? Not all inherited properties do. Regardless if yours does or doesn’t, it’s smart to start by getting a formal property inspection. This will tell you what all might need attention & help you come up with your asking price. Anything from the roof, to heating and cooling, plumbing, electrical, foundation repair, rotted siding, termite or insect infestations, etc. Then add up the total cost of materials + labor. PRO TIP: When completing a renovation, add another 20% on top of your rehab budget for unforeseen problems. With houses, there are so many nooks and crannies for problems to hide.
If the cost happens to be out of your budget, or maybe managing a renovation just doesn’t fit in your daily schedule, you may be better off selling to a real estate investor. Investors are more likely to buy the house in “as is” condition, and make you a cash offer. Leave the hassle to the professionals, get paid, and move on!