It’s not every day that someone inherits land, but if you find yourself in this position, you may be wondering what to do with it. Selling inherited land can be a bit of a process, but with the right preparation, it can be done successfully.
In this blog post, we’ll discuss how to sell your inherited land and some of the things you need to keep in mind. This includes determining whether an agent or investor is the right fit for your inherited land sale.
So, whether you’re thinking about selling land or are just curious about how it works, read on for more information!
MAIN TAKEAWAYS…
- The first step to selling inherited land is determining the value of your land by working with a land appraiser.
- An agent can help you sell over the course of 6-9 months whereas an investor can cash you out in 4-8 weeks.
- Closing varies by state but will require all land documents requested by the closing attorney.
How Do I Sell My Inherited Land?
The probate process is different in every state, but determining what to do with inherited land is not geographically tied. Assuming the land has been through probate court, we will start this how-to process from when probate is finalized…
Step 1: Determine the Land’s Value
Before you can sell inherited land, you’ll need to determine how much it’s worth. From the probate process, you should have an estimate of the land’s worth. However, if it’s been a year or more since going through probate, the value of the land may have changed.
Start by contacting an appraiser who specializes in land and knows the area of your inherited property. This will give you an accurate estimate of what fair market value could be for your land.
An appraiser will recognize advantages of the land such as access to amenities, utilities, and transportation. They will also spot drawbacks such as a remote plot far from any civilization or up-and-coming plans to grow the area.
Keep in mind that the value of inherited land will vary drastically depending on whether it can be used for development or renewable energy, etc… make sure to discuss all of the details with your land professional.
Step 2: Real Estate Agent or Investor?
There are a couple different options for selling your land, and the decision comes down to how simple you want the process to be and how long you’re willing to wait…
Selling Inherited Property To An Agent
To sell inherited property with an agent, you will need to find a real estate agent who specializes in land. In addition, the agent should be experienced in the area where your property is located. Your best bet for finding such an agent is either by looking online at public records of other land sold in your county.
Interview multiple agents to find someone who is the right fit for you and your land. Some questions to consider asking include:
- Have they sold land before in your county?
- How long did the land take to sell?
- Do they specialize in land sales, or do they mainly sell houses with land on the side?
Remember: Most real estate agents prioritize selling houses because that is where they make most of their money. Further, agents charge a hefty commission on land sales, so you could lose up to 8-10% of the sale price.
After choosing an agent, it’s a waiting game. Your agent needs to find a buyer, and land typically moves slow– we’re talking 6 to 9 months for a sale.
That’s a lot of taxes and fees to pay on the property while waiting. Make sure to account for these costs when determining whether an agent or investor (or even selling land by owner) makes more sense for your land sale.
Selling Inherited Property To An Investor
If you don’t want to go through the hassle of waiting to find a buyer and dealing with closing costs, you may be a better fit to sell your inherited land to an investor. This can be a quick and easy process, but it’s important to keep in mind that investors usually pay less than market value for property.
However, choosing to sell to a cash land buyer is the fastest option. If your priority is to stop paying property taxes on your land and cash out as soon as possible, get in contact with investors who buy land. Most investors will provide you a free, no obligation cash offer for your vacant land.
Note: This offer should include all closing costs, so you don’t have to deal with any hidden fees when selling your inherited property.
You’ll want to compare prices from different investors before making up your mind about who will buy your inherited property. Some investors can offer more but take longer to close while others can close as fast as you choose.
If you’re happy with one of the cash offers, your job is done. There is no waiting or delays, which means you can stop paying fees on your land as soon as you close. Not to mention, you don’t have to pay commission or closing costs when working directly with a land investor.
Step 3: Closing
When selling your inherited land, you will be working with a closing attorney or title company depending on where the land is located. This is where your contract with the buyer will be formalized and signed by both parties, as well as any other contracts associated with the sale (i.e., easements).
Closing on an inherited property can take from one week up to three weeks. This is where unpaid property taxes and liens are taken care of, as well as any other outstanding balances on the land.
You’ll also want to provide all relevant documents, such as deeds and surveys for review during closure. The title attorney will let you know what is required from their end.
Capital Gains Tax
You may have to pay capital gains taxes on the profits of your sold land. This depends on how long you owned the land and how much the land sold for.
Capital gains tax applies when asset prices rise over time and the owner makes a profit by selling for higher than the inherited value.
If you the sell the land within a year of inheritance for the amount declared during probate, you should not owe any capital gains tax. Work with an experienced tax attorney in your state to determine what you owe.
Final Thoughts: How To Sell Inherited Land
Inheriting land can be seen as a gift and a curse. You are faced with selling the plot, handling all associated taxes and fees, and may be dealing with all of this from out of state. But, you get the opportunity to cash out your land and put the money towards new investments.
Although selling land can be a difficult and complicated matter, a little preparation can go a long way. If you’ve been left an estate or property by someone who has passed away, it is important to know what steps to take next.
We have the expertise necessary to help you sell your inheritance quickly. We want you to live life to the fullest without having the burden of paying property taxes and fees on a sitting plot.
Fill out the form below or give us a call to see how we may be able to assist in selling your inherited land fast! (346) 207-1246