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As the beneficiary of an inherited house in Phoenix, Arizona, there’s a lot of choices to consider, including whether to keep the property or sell it. For those who choose to sell inherited house Phoenix, AZ and all cities within the state have unique requirements you must follow.
When selling inherited property Arizona residents can use this comprehensive guide that outlines each step and provides insights into the documents you’ll need to help the process run smoothly. From probate to listing, see what you can expect when selling your inherited house.
Understanding Probate in Arizona
Probate is the legal process that validates a deceased person’s will and distributes their assets. Like all states, Arizona probate laws ensure all assets are distributed correctly, whether or not there was a will. Probate is required whenever someone who owns individual assets that aren’t in a joint tenancy or living trust, and without a designated beneficiary, dies.
You must start probate within two years of the decedent’s passing, or it may not be allowed without the intervention and approval of the courts. When it comes to real estate Arizona provides a few ways to avoid probate, including if there was a beneficiary deed or a small estate affidavit.
Beneficiary Deed
A beneficiary deed, also called a transfer on death (TOD) deed, lets the property owner choose a designated beneficiary for the property. When the owner dies, the property directly transfers to them without needing a trust or will, effectively bypassing the probate process.
Small Estate Affidavit
When a person’s assets are relatively small, they can create a legal document known as a small estate affidavit that allows their beneficiary to claim the home without going through the entire probate process. In Arizona, small estate affidavit monetary limits are:
- Real property – $100,000
- Personal property – $200,000
It’s important to note that you must wait at least 30 days after the decedent’s death before using a small estate affidavit; there can’t be any pending petition or application for a personal representative for the estate, and the beneficiary must have a legal entitlement to the property as the decedent’s successor.
Key Documents Needed to Sell an Inherited Property in Phoenix, AZ
Once the probate process is complete and the property is in your name, you can now proceed with the sale. Knowing what paperwork is needed to sell inherited property will help you avoid frustrating delays.
If you’re preparing to sell your inherited property fast in Phoenix, knowing these documents helps streamline the process and avoid common setbacks.
Here is a list of the documents to sell inherited house you’ll need to provide in Arizona:
- Death certificate
- Will or trust
- letters of personal representative
- Probate court approval
- Affidavit of succession
- Title deed
- Tax info and mortgage payoff
Death Certificate
A death certificate is essential documentation when trying to sell an inherited property in Arizona, since it’s used to prove the prior owner’s death and transfer the title to the beneficiary. You’ll need to provide copies of the death certificate throughout the selling process, including for the title transfer and mortgage payoff. It’s also used for debt settlements, calculating capital gains tax, and for appraisals.
Will or Trust
You can use both a will and a trust when managing the sale of your inherited property, but they do function differently. A will offers less flexibility for the beneficiary since it directly dictates how the decedent’s assets are distributed. You must still go through the probate process, and an executor manages the sale, ensuring it follows Arizona law. With a trust, the process is much simpler, since you can avoid probate and the beneficiary controls the sale of the house.
Letter of Personal Representative
The Letters of Personal Representative (also called either Letters of Administration without a will or Letters Testamentary with a will) play a key role when selling an inherited property in Arizona. The probate court appoints a personal representative to the estate, and the Letters of Personal Representative authorize that person to act on its behalf, which includes the authority to sell the property.
Probate Court Approval
If the property isn’t held in a trust or other legal agreement bypassing probate, you cannot sell an inherited property without probate court approval. It’s the probate court’s job to oversee the sale of the property to ensure it’s done fairly and the proceeds are distributed correctly.
Affidavit of Succession
For Arizona properties valued under $100,000, an Affidavit of Succession can be used to transfer the real estate from the decedent to the beneficiary without the need for probate. This document acts as the proof of ownership and establishes a clear chain of title, streamlining the process.
Title Deed
The title deed transfers ownership of the property from the decedent to the beneficiary. It confirms their legal right to the house and is necessary for selling the property. With a title deed, the beneficiary can skip the probate process.
Tax Info and Mortgage Payoff
Selling an inherited house in Arizona requires an understanding of the different tax information the beneficiary must navigate. All inherited Arizona properties receive a “Step-up in basis,” which returns them to their fair market value for tax purposes. If the house is sold for more than this amount, the seller must pay a capital gains tax on the difference.
The beneficiary is also responsible for the property taxes incurred during their ownership, and any liens against the property must be cleared before selling. There are a few options when it comes to paying off the mortgage, including:
- Assuming the mortgage
- Paying off the loan
- Refinancing
- Selling and paying off the mortgage
Arizona doesn’t have an estate or state inheritance tax, which does make the process easier.
Common Issues That Delay the Sale
Unfortunately, sometimes you can run into problems selling inherited property that can delay the process. Let’s discuss some of the most common issues you may encounter.
Multiple Heirs
When there’s multiple heirs involved with one property, it’s common to experience disagreements over whether or not to sell, what repairs are needed, and the selling price. Under Arizona laws, heirs can contest decisions regarding inherited homes, and all parties are required to be transparent about the process, which can lead to delays.
Code Violations
If the house has code violations, it can cause delays, lower its value, impact the buyer’s options, and even lead to legal issues. Depending on the severity of the violations, buyers may not be able to secure insurance or funding for the property, and in some cases, it can even lead to title problems.
Market Conditions and Property Value
Depending on the condition of the property, you may need to perform repairs, clean, and stage it for sale. You’ll also need to get an appraisal to determine market value, all of which can take time. If the market conditions are slower, it may also take a while to find a buyer, while faster markets can lead to multiple offers, which can also lead to delays.
Probate
If you have to go through the probate process for the house, you’ll have to wait for the courts to distribute assets, settle debts, and validate the will. Arizona probate generally takes several months, but it can be longer if there’s disputes or complications.
Title Issues
When it comes to title issues inherited house sales are often impacted. Transferring the property from the decedent to the beneficiary involves getting the correct legal documents like Letters of Testamentary and a death certificate, which takes time.
Your Options: Sell Your Phoenix Inherited Home Quickly Without the Headache
If you want to sell your inherited house in Phoenix quickly, working with a local buyer simplifies the process. While it may seem tempting to go with a realtor because they make big promises, this option can be time-consuming and complicated.
Using an investor like Red Rock Properties is the best way to get a high selling price, without the hassle of using a real estate agent. With an investor, you don’t have to wait months to sell your inherited house; they purchase it in days. Plus, you don’t have to make repairs or worry about expensive fees. If you’re ready to sell your property quickly, using an investor is the best way to go.
Helpful Local Resources
Navigating the Phoenix probate court can be confusing and overwhelming, which is why we’ve added this quick-look guide for Arizona probate help.
Sell Your Inherited Property In Days With Red Rock Properties
When you’re ready to sell inherited property fast Phoenix residents turn to Red Rock Properties. Red Rock Properties is the premier Arizona home buying company, offering cash for homes.
With Red Rock Properties Phoenix residents get top dollar for their inherited house with an all-cash offer and a lightning-fast sale. You don’t have to worry about dealing with agents, fees, or repairs. If you’re dealing with an inherited home in Phoenix, we can help. Contact us today at 480.389.6484 or visit our Phoenix home-buying page for your no-obligation offer!