Selling inherited property in Oklahoma can get pricey, with 8% to 10% in closing fees, 0.86% in taxes, and 3% for a listing agent. That’s about $27,248 on a $250,900 home. Probate and title clearance only add to the expenses.
The good news? You can save thousands in repair, probate, and closing costs by selling your home for cash. On top cash buyer marketplaces, you can even get offers in just 7 days!
KEY TAKEAWAYS:
- When selling an inherited property in Oklahoma, probate and accurate pricing are the most crucial steps.
- You will need essential documents like the death certificate, proof of ownership, seller disclosure, and more.
- Some common challenges while selling an inherited home in Oklahoma are disputes among heirs, outstanding mortgages, and property defects.
- You need to budget for major taxes like Transfer Tax, Property Tax, Estate Tax, Inheritance Tax and Capital Gains Tax.
What Is an Inherited Property?
Inherited property refers to assets or possessions that are passed down by a deceased person to their heirs. It is outlined by a legal document such as a will. Inheriting a property in Oklahoma often involves a probate court. This court validates the will and distributes assets to heirs, overseeing the process.
Selling an inherited property involves legal complexities such as tax implications or any outstanding debts, for a smooth transaction. Understanding legal and financial aspects is crucial for a smooth and well-informed selling process.
Steps to Take After Inheriting a Property in Oklahoma
Once you inherit a property, there are legal and financial tasks you must perform:
- Finish the Probate Process: Probate is a legal process that validates the deceased person’s will and distributes assets. The probate process takes several months to one year to complete. You must wait for the probate process to end before you list the property for sale.
- Get a Property Assessment: Assess your property for foundation, structure, and wiring issues through a home inspection or appraisal once you own the house (after probate).
- Clear Debts and Liens: You must pay off remaining debts like outstanding mortgages or property taxes on the home before selling it.
- Begin the Selling Process: Once the necessary legal and financial tasks are complete, you can begin the process of selling the inherited property.
How to Avoid Oklahoma Probate Court Before Inheritance?
Understanding how long after probate can a house be sold is crucial, as you must wait until the probate process is finalized before you can list the property for sale. However, skipping the probate court saves time and cuts legal costs.
In Oklahoma, property owners can use these methods to transfer assets directly to you:
- Create a Revocable Living Trust: This allows the person to retain control over their property while alive and transfer it to its recipients upon death. Placing assets in the living trust avoids probate, and transfers it directly to the inheritor.
- Use Joint Ownership With Right of Survivorship: This is a legal arrangement where multiple owners share the property. But when one owner dies, the surviving owner inherits the house without any probate court involvement.
Ways to Sell An Inherited Property in Oklahoma
Once you get complete ownership of the property, you can start the selling process. Selling an inherited Property in Oklahoma is just like selling any other house. Here are ways to sell an inherited property:
1. For Sale By Owner (FSBO) Method
If you choose For Sale By Owner, you can sell your inherited property without a real estate agent. It gives you full control over the sale process. By avoiding the agent fees, you can save up to $10,000 or more on an average home sale.
Moreover, FSBO websites in Oklahoma help you get listed faster, typically within 24 to 48 hours. For a successful FSBO sale, you can also choose Flat Fee MLS services which allow you to list your home on the MLS giving it the same exposure as agent-assisted properties.
Flat Fee MLS companies in Oklahoma like Houzeo help you get on the MLS, within 24-48 hours. Once listed, your property appears on Zillow, Redfin, Realtor.com, Homes.com, and local Oklahoma real estate websites.
2. Opt for a Discount Real Estate Broker
Discount real estate brokers charge lower commission rates than traditional brokers. They offer similar services as full-service agents, like listing on the MLS and handling paperwork. As a seller, you can save more through these brokers.
Listing with an Oklahoma discount real estate broker lets you control the selling process and keep more profit. For example, instead of paying the 5% to 6% commission, you only pay 1% to 2% with a discount real estate broker.
3. Sell Your Home to an iBuyer or a Cash Company
iBuyers purchase homes from sellers and provide quick cash offers. However, iBuyers have strict purchase criteria. Oklahoma cash companies buy homes with cash in as-is condition without requiring additional repairs or renovations.
You also avoid the listing, staging, and showings by selling your inherited property to a cash buyer or iBuyer. Another perk is that you get to sell your house fast without waiting for a buyer financing approval. But depending on the condition of your house you could get a lower value for your property.
However, cash companies often pay just 50% to 70% of your home’s value. You can use a fair market value calculator to find the FMV of your home. This free tool gives you an accurate estimate in few seconds. It helps you make informed decisions and get the best possible price.
4. Hire a Local Real Estate Agent
Real estate agents are well-versed in changing market conditions. They provide a comparative market analysis to help you set a competitive price, and maximize your profit. Realtors also market your property to buyers via the MLS for a wider reach.
Moreover, they can also advise you after you start receiving offers. But, they do charge hefty commissions from 5% to 6%, significantly higher than a Flat Fee MLS service. This can impact your profits from the home sale resulting in lower net proceeds.
Documents Required for Selling an Inherited Property in Oklahoma
Here are the most common documents you will likely need:
- Proof of Ownership: This document proves you now own the house. You will get this document after the probate court proceedings.
- Death Certificate of the Deceased: It verifies the death of the previous owner. Title companies, lenders or parties involved ask for the death certificate to finalize the sale.
- Property Title Records: The property title tracks who has owned the house over time. Title records also inform about existing liens or mortgages on the property that must be paid off before the sale.
- Property Tax Records: These ensure all property taxes are paid and there are no outstanding liens. It may be required by buyers, mortgage lenders, or title companies to verify the property’s tax history and ensure compliance with local tax laws.
- Photo ID: You’ll need your photo ID for paperwork throughout the selling process to verify the identity of the seller or the inheritor.
- Seller Disclosure: In Oklahoma, you’ll need to tell buyers about the house’s condition by law. You will need to fill out the seller disclosure accurately to inform about the property’s condition.
Challenges to Selling an Inherited Property in Oklahoma
Here’s a breakdown of some common hurdles sellers face:
Multiple Inheritors
When selling an inherited property with multiple owners, each inheritor may have a different opinion on the listing price or choice of real estate agent. This can lead to delays in the sale.
So, do all heirs have to agree to sell the property in Oklahoma? No, but it’s ideal for all owners to be on the same page regarding the sale.
In case of any conflict among the inheritors, a neutral third party, like a real estate attorney, is appointed to facilitate decisions.
Outstanding Mortgage
If you are inheriting a house with a mortgage then it must be paid off before you proceed with the sale. Doing this reduces your potential proceeds from the sale, and impacts your ability to maximize the profit.
You can negotiate with the lender to assume the existing mortgage or refinance the loan. Alternatively, consider exploring options like a short sale or loan assumption to sell the property without fully paying off the mortgage balance.
Property Condition
Structural issues or needed repairs make inherited houses less appealing to buyers looking for homes for sale in Oklahoma. This limits the number of buyers and reduces the house’s market value. Consider hiring a home inspector in Oklahoma to assess the property’s condition and recommend repairs to enhance the property’s market appeal.
Taxes on Selling an Inherited Property in Oklahoma
Here are the taxes you have to pay when selling an inherited property in Oklahoma:
- Transfer Tax: A transfer tax is a fee the government changes when real estate ownership changes. In Oklahoma, the transfer tax is prorated at the rate of $0.75 for each $500 of the sale price, or for any part of that amount..
- Property Tax: It is an annual fee you pay to your local government based on the value of your property. Like any other real estate, inherited property incurs property tax. Oklahoma’s property tax rate is 0.90%.
- Estate Tax: Oklahoma has no state estate tax. The federal estate tax only applies to very large estates exceeding $13.8 million in 2024. It’s a tax on the estate itself, not the inheriting individual.
- Inheritance Tax: The inheritance tax rate depends on the beneficiary’s relationship to the deceased and the inheritance amount. Inheritance tax doesn’t apply to Oklahoma.
- Capital Gains Tax: The IRS applies capital gains tax based on a stepped-up basis. This tax applies only to the property’s appreciation after inheritance.
» Capital Gains Exemptions: Know how you can be exempt from capital gains tax.
Is It Difficult to Sell Your Inherited House in Oklahoma?
No, it’s not difficult, but it’s time-consuming. Selling an inherited property in the Sooner State could take up to 6 to 9 months, depending on when probate ends. Moreover, capital gains and property taxes could reduce your net profit.
To avoid losing thousands when selling your inherited property, opt for a cash marketplace. You can compare offers and get the best deal, all within just 7 days!
