Selling your inherited house in Warner Robins with an installment sale
“What are you talking about? ‘Installment Sale’, I’ve never heard of that”. How does this “installment sale” help me sell my house in Warner Robins?
That is a very good question and I’m glad to explain how an installment sale can help people in middle Georgia sell a house or inherited property. There are a lot of baby-boomers getting into their golden years and soon we will be losing our loved ones to the cycle of life. The next generation will inherit assets from their parents which includes the house they lived in. In many cases, There are multiple siblings inheriting from the estate and it is hard to separate a house, but it is easy to separate money. The heirs try to sell the house at full market price with a real estate agent and hope for the best.
The problem with selling an inherited property is the emotional ties to the house and getting the ones that inherited the house together long enough to make a deal. Multiple sellers on one house can be difficult. It’s hard to get everyone to agree on sales price, repair allowance, closing costs and other aspects of the sale. Not only does this drag out the sale, but it can cost more due to the time wasted.
The great thing about inherited houses is, after the house is appraised, the cost basis of the house just climbed up. Selling an inherited property (especially if it’s a free and clear property) at the appraised price will not show a profit come tax time (check with your tax advisor), and if it sold for less than the appraised value, the inherited house can show a loss on paper. This is great for tax savings. BUT, we are not here to talk taxes. This is about selling an inherited house in Warner Robins for the highest possible price, right? At Real Estate Problem Solver, we have helped children of deceased parents in Warner Robins find a solution to this problem and found that many siblings can’t agree on anything more than full sale price and all cash, even if the house needs work.
Here is the solution you came to hear about. An installment sale is selling a house on terms to a buyer. This means the seller is the bank. The buyer gives a down payment and pays monthly installments over time till the sales price is paid off. Just like a bank, many will charge some interest, usually the same as the banks, which adds to the money the seller makes on the house. If the money made on the sale of a house is just going to sit in the savings account and earn .001%, this is a much better choice for making the money last longer and get more for the house than a cash buyer would ever offer. Many “We buy Houses” companies will pay much more for a house with an installment sale and can close faster. The seller gets a faster, closer to full price sale of their inherited house. The buyer gets financing in place and doesn’t have to deal with the red tape that comes with bank financing. Bets of all, Once the heirs have th house under financing, if they change their mind and still want cash, they can sell the note to a note buyer.
Of course the next question usually is what happens if they default somewhere down the road? In Georgia, closing on a house involves a real estate attorney. The attorney will keep records of the closing for his/her records. If the buyer can’t pay and the parties can’t come to a solution (which should be easy to do as long as there is communication), than the attorney will have everything on record to foreclose and get the house back. Now the seller has a house to sell again, usually for more due to appreciation. Selling a house on terms is the best way (in my opinion) to sell a house (inherited or otherwise) fast and get the best price. Ask your tax and real estate attorney about doing an installment sale and then call us, we still are buying houses in Warner Robins.
Talk to you soon,
Real Estate Problem Solver