Selling inherited property in Florida can get pricey, with 6.25% to 9% in closing fees, 0.86% in taxes, and 3% for a listing agent. That’s about $43,800 on a $403,300 home. Probate and title clearance only add to the expenses.
The good news? You can cut down on some of these costs with a Florida Flat Fee MLS listing service and save almost $12,000 in agent fees.
5 Steps to Selling an Inherited Property in Florida
Selling an inherited home in Florida may seem overwhelming, but don’t worry. Here are 5 steps to help you navigate the process:
1. Complete the Probate Process
An inherited property must undergo probate. In fact, real estate makes up 75% of all assets that go through probate in Florida. It validates the deceased’s will and streamlines the transfer of assets, including property, to the heirs.
The probate process can take 6 to 9 months. It can take longer if multiple inheritors are involved or a will is absent. You must submit the owner’s death certificate and proof of home ownership during the probate process. You also have to pay any outstanding mortgage, property tax, and liens.
2. Assess the Property
After probate, you must check the property for defects. You can hire a home inspector in Florida to look for foundational, structural, and wiring issues. This will help you decide if you want to fix up the house or sell it as is.
3. Prepare Your Home for Sale
Clean, declutter, and make any necessary repairs or upgrades to enhance the property visually. Paint the exterior, clean your windows, and invest in landscaping to improve the house’s curb appeal. This will improve its marketability and may attract higher offers.
4. Choose How to Sell Your Home
Here are 5 ways to sell a home that you inherited in Florida:
- Choose an iBuyer or a Cash Buyer: iBuyers, such as Opendoor and Offerpad, purchase homes directly from sellers. They have strict home-buying criteria. Cash house buyers in Florida make offers for distressed houses within 24 to 48 hours.
- On a Cash Buyer Marketplace: These platforms connect you with multiple companies and flippers that offer cash for houses in Florida. Showcase your property now to attract competitive cash offers.
- Choose an iBuyer or a Cash Buyer: iBuyers, such as Opendoor and Offerpad, purchase homes directly from sellers. They have strict home-buying criteria. Cash house buyers in Florida make offers for distressed houses within 24 to 48 hours.
- On a Cash Buyer Marketplace: These platforms connect your home with multiple cash buyers and home flippers, increasing your chances of a higher offer. Showcase your property now to attract competitive cash offers and sell your home for cash in Florida quickly.
- Select a For Sale By Owner (FSBO) Platform: FSBO sites in Florida allow homeowners to list and sell their properties without the assistance of a real estate agent. However, your home won’t get the MLS exposure it deserves.
- Hire a Full-Service Realtor: They are real estate agents or brokerages that offer comprehensive services, including marketing, negotiation, paperwork, closing assistance, etc. However, they charge a 5% to 6% fee for their services.
- List Your Home on the MLS: You can get your home on the market typically for $199. With Florida Flat Fee MLS companies like Houzeo, your home will be on top real estate websites, giving it maximum exposure.
5. Set a Competitive Price
You can sell a house by owner in Florida or take an agents-assistance. But remember to conduct a Comparative Market Analysis to set a fair and competitive price. Calculate your home’s worth beforehand to negotiate better offers, especially if selling to a cash buyer or an iBuyer.
What Will Be Your After-Sale Profit?
Your net proceeds when selling your inherited home depend on factors like the final sale price, closing costs, agent commissions, property taxes, and capital gains tax.
The median home sale price in Florida is a whopping $410,800. With mortgage rates trending downward, sellers are seeing multiple competitive offers. By choosing a Flat Fee MLS service like Houzeo, you can skip the 3% listing agent fee and save at least $12,000!
📢 NAR Settlement Saves Sellers Thousands in Commission
The NAR Settlement went into effect on August 17, 2024. Buyer agent commissions can no longer be offered on the MLS. This means sellers will save thousands! But it also means there’s a lot more compliance and litigation risks.
Here’s what this means for you:
- Sellers Can Save Thousands in Commissions: You will likely pay much less than the traditional 3% buyer agent commission. That’s because buyer agent commissions will be negotiated twice: Once when buyers engage buyer agents, and again when sellers review offer contracts.
- Seller Priority #1 Will Be Paperwork (to Mitigate Compliance & Litigation Risks): Buyer agents mitigate all types of risks. From seller disclosures, offer contracts, contingencies, inspections, repair requests, appraisal, and closing – Buyer agents keep the paperwork tight. Their state licensing authorities, Realtor associations, and MLS’ audit paperwork compliance. Without buyer agents, sellers will have to learn and adapt. Or risk expensive litigation.
- Negotiations Can Now Feel Like Haggling: Buyer agent commissions will now be part of offer contracts and buyer agency agreements. Buyers may ask sellers to include commissions in the form of seller concessions. That means home buyers and sellers alike will be negotiating commissions. Sellers will need expert licensed brokers to help them with these negotiations.
- Buyer Agent Commissions Can Be Offered Offline: Buyer agent fees can still be offered outside of the MLS. They just cannot be advertised on the MLS.
Documents Required for Selling Inherited Property in Florida
Here are the 6 documents you’ll need while selling your inherited house in Florida:
- Proof of Ownership: This document confirms that the house is legally yours after probate, allowing you to sell it under Florida inheritance law.
- Death Certificate: This document verifies the death of the previous owner. Florida title companies, lenders, or other involved parties often require 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 inherited property taxes in Florida are paid and there are no outstanding liens. Buyers, mortgage lenders, or title companies may require it to verify the property’s tax history and ensure compliance with local tax laws.
- Photo ID: You’ll need your photo ID throughout the selling process to verify your identity as the inheritor.
- Seller Disclosure: You are legally obligated to disclose the condition of your home to potential buyers. Complete the Florida disclosure agreement accurately to avoid a failed sale down the line.
3 Challenges When Selling an Inherited House in Florida
Some of the most significant challenges that can arise when selling an inherited property are:
1. Disagreement Between Multiple Inheritors
When multiple heirs are involved, there may be disagreements over the listing price or choice of a real estate agent. A mediator can help you here.
If some heirs want to sell while others prefer to keep the property, a buyout or court-ordered partition sale may be necessary. Additionally, a neutral third party, like a Florida real estate attorney, can help facilitate decisions.
2. Repayment of Any Outstanding Mortgage
If you plan to sell your inherited house with a mortgage, you must pay it off before the sale. However, this can reduce your potential profits from the sale.
You can negotiate with the lender to assume the existing mortgage or refinance the loan. Alternatively, explore options like a short sale or loan assumption. This can help you sell the property without fully paying off the mortgage balance.
3. Defects in the Property
Structural issues or defects due to the house’s age can make it less appealing to buyers. This limits the buyer pool and reduces the house’s fair market value. Hire a home inspector to assess the property’s condition.
What Taxes Do You Have to Pay When Selling an Inherited Home in Florida?
Here are 5 major taxes you have to pay when you sell an inherited property in Florida:
- Transfer Tax: The government charges this fee when real estate ownership changes. In Florida, it’s called ‘Doc Stamps’ and is levied at a flat rate of $0.70 per $100 of the sale price.
- Property Tax: It is an annual fee you pay your local government based on the value of your property. Florida’s property tax rate is at 0.83%.
- Estate Tax: There’s no state-levied estate tax in Florida. However, there’s a federal estate tax on large estates exceeding $13.8 million in value. 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 laws in Florida do not impose any tax on the home seller.
- Capital Gains Tax: The IRS applies capital gains tax on a stepped-up basis while selling an inherited property. This tax applies only to the property’s appreciated value after inheritance.
Is It Difficult to Sell Your Inherited House in Florida?
No, it’s not difficult, but it’s time-consuming. Selling an inherited property in the Sunshine 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.
However, you can maximize your profit and your home’s visibility by listing on the MLS in Florida with Houzeo. You can skip the hefty 3% agent fee and list immediately after probate.
