9 min read Apr 25, 2024

Selling an Inherited Property in Massachusetts (2024 Updates)

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Jason Joshi

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Edited By

Jason Joshi

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Jason is a passionate content editor working at Houzeo. He has an eye for detail and keeps himself updated with the recent trends in the real estate market. He also likes to travel and explore places.

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While an inherited property comes with a lot of perks, selling it also has additional costs. The biggest expense is real estate agent commissions. Home sellers in Massachusetts pay around 5% to 6% in real estate commissions.

Add to that 4% to 5% for repairs, 6.25% to 9% for seller closing costs, and property taxes, and the total can exceed $10,000. These costs can quickly add up. But if you want to sell your property for a profit, now is a great time.

Home sales have increased in the Bay State, indicating high buyer demand in Massachusetts. This means you can sell your house fast for a profit. To maximize your profit, consider going FSBO and listing your house through a Flat Fee MLS service like Houzeo.

Houzeo can list your property on the MLS within 24 to 48 hours, helping you save on Realtor fees, reach a wide audience, and maximize your profit.

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 Massachusetts 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 Massachusetts

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 6 to 9 months to complete.
  • 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 Massachusetts Probate Court Before Inheritance?

Skipping the probate court saves time and cuts legal costs. In Massachusetts, 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 Massachusetts

Once you get complete ownership of the property, you can start the selling process. Selling an inherited Property in Massachusetts is just like selling any other house. Here are ways to sell an inherited property:

1. For Sale By Owner (FSBO) Method

In 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.

To boost your chances of success in FSBO, you can list your property using a Flat Fee MLS service. This service allows you to list your home on the MLS giving it the same exposure as agent-assisted properties.

Moreover, Flat Fee MLS companies in Massachusetts 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 Massachusetts 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 a Massachusetts 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. Massachusetts 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.

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%. This can significantly impact your profits from the home sale resulting in lower net proceeds.

Top Real Estate Agents in Massachusetts

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Documents Required for Selling an Inherited Property in Massachusetts

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 Massachusetts, 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 Massachusetts

Here’s a breakdown of some common hurdles sellers face:

Multiple Inheritors

Each inheritor may have a different opinion on the sale, listing price, or choice of real estate agent. This can cause delays and make the sale time-consuming.

To counter this problem, appoint a neutral third party. This person can make decisions for all inheritors, and reduce conflicts. Hiring a real estate attorney can also resolve disagreements and ensure all legal requirements are met.

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. This limits the number of buyers and reduces the house’s market value. Consider hiring a home inspector to assess the property’s condition and recommend repairs to enhance the property’s market appeal.

Taxes on Selling an Inherited Property in Massachusetts

Here are the taxes you have to pay when selling an inherited property in Massachusetts:

  • Transfer Tax: A transfer tax is a fee the government changes when real estate ownership changes. In Massachusetts, it is 0.456% of the total value of the transaction.
  • 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. Massachusetts’s property tax rate is 1.20%.
  • Estate Tax: Massachusetts 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. The inheritance tax doesn’t apply to Massachusetts.
  • 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.

Bottom Line

Inheriting a house in Massachusetts involves a probate court which can take 6-9 months to finish and transfer the ownership. Additionally, there may be capital gains, estate, or property taxes to pay which can reduce your profit potential.

If you want to maximize the profit from your inherited house then list it on the Massachusetts MLS. This exposes your property to more buyers and agents, increasing your chances of selling at the highest price possible.

With an MA Flat Fee MLS company like Houzeo, you can list your property on the MLS right after the probate. This gets your house maximum exposure, attracting more buyers who might compete for the best price.

5 Easy Steps to List on MLS

Check out the following video to understand how to list your house on Houzeo and save on commissions.

How to List on MLS With Houzeo?

5 Easy Steps to List on MLS with Houzeo as FSBO

Start Your MLS Listing NOW!

» Need More Clarity? Read these exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.

Frequently Asked Questions

How do I avoid capital gains tax on an inherited property in Massachusetts?

You only pay capital gains tax on any appreciation after you inherit. If you want to avoid capital gains tax altogether, sell your house faster before its value appreciates.

Do you have to pay taxes on inheritance in Massachusetts?

There is no inheritance tax in Massachusetts and it is applicable in few states like Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. But here are the other taxes you may have to pay when selling an inherited house in Massachusetts.

Is there a time limit on selling an inherited property in Massachusetts?

No, there is no time limit on selling an inherited property in Massachusetts. Once the probate process is completed and you are legally the owner, you can sell the property whenever you choose.

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