Selling an inherited property is often the largest financial transaction an heir will ever handle. In an already emotional time, it’s easy to make critical mistakes that can cost the estate tens of thousands of dollars. As a probate specialist, my role is to guide you past these common pitfalls to protect and maximize your inheritance.
Here are the five biggest financial mistakes to avoid.
- Making Expensive, Unnecessary Renovations Your loved one’s home may be dated, but a full kitchen or bathroom remodel is rarely a wise investment for a probate sale. These properties are often sold “as-is,” and buyers expect to do their own updates. Focus only on low-cost, high-impact fixes like deep cleaning, painting, and improving curb appeal.
- Misunderstanding Capital Gains Tax Many heirs worry about paying massive taxes. The good news is that under current law, the property’s cost basis is “stepped-up” to its fair market value at the date of death. This means if you sell quickly, your capital gains tax liability is often minimal or zero. Always consult with a CPA, but don’t let tax fears lead you to make poor decisions.
- Trying to Sell “For Sale By Owner” (FSBO) A probate sale is not a typical transaction. It involves specific legal disclosures, court timelines, and potential court confirmation. Attempting to navigate this complex process without a specialist is a recipe for legal mistakes, liability, and almost certainly a lower sale price.
- Neglecting Property Maintenance and Insurance Once you inherit a property, you also inherit the liability. Failing to maintain homeowner’s insurance or ignoring a small leak can lead to catastrophic financial loss for the estate. Secure the property immediately and ensure it is properly insured and maintained until the day it closes.
- Choosing a Friend or Family Member as Your Agent While well-intentioned, a friend who is a general real estate agent simply does not have the specific training to handle a probate sale. Their lack of experience can lead to delays and errors that put the estate at risk. Always choose an agent with a verifiable track record of successful probate sales.
Your inheritance is a significant asset. Protecting it requires careful, expert guidance. By avoiding these common mistakes, you can ensure a smooth, secure, and profitable transaction that honors your loved one’s legacy.
To ensure you are making the best financial decisions for the estate, contact me for a no-obligation consultation.