What To Do After Inheriting Land in Washington

Inheriting a parcel of vacant land in Washington state can seem like a stroke of good fortune. But before dreaming up plans for your new found inheritance, it's important to understand the responsibilities and options that come with vacant land ownership. Here is a detailed guide on steps to take after inheriting undeveloped land in Washington.

Get Your Hands on The Title and Other Documents

The first priority is getting organized by gathering allimportant documents related to the inherited property. This includes:

·        The legal property deed listing you as the new owner.This should be filed at the county records office where the land is located.

·        Property tax bills going back 2-3 years. This will give you an idea of the annual tax amounts owed.

·        Mortgage records if there is any debt tied to the land as collateral.

·        Mineral rights documentation if any mining, oil, or gas reserves are on the land.

·        Records of any liens, right-of-ways, zoning restrictions, easements, or other encumbrances on the property.

·        Maintenance logs and improvement receipts if structures like wells or sheds exist.

·        Leasing or rental agreements if the land has current tenants.

Thoroughly review all these documents to understand what exactly you've inherited, the ownership history, and any limitations on the property. Being organized from the start makes managing or selling the land much easier down the road.

Decide Whether To Keep or Sell the Land

With all the documentation in hand, now comes the big question every new land owner faces - should I keep or sell the inherited property? There are compelling reasons on both sides of this decision.

Factors Favoring Keeping the Land

·        Emotional reasons - maybe the land has been in your family for generations and you want to retain that legacy.

·        Appreciation potential - land values in the area may rise substantially over the next 5-10 years.

·        Income potential - you may be able to lease the land to farmers, harvest timber, collect royalties from oil/gas/mineral rights, etc.

·        Development potential - is the land near a growing town where you could build residential or commercial structures someday?

·        Long-term investment - even if the land sits vacant, it may accrue value as surrounding properties get developed.

·        Low maintenance - aside from paying taxes and monitoring for trespassers, vacant land has low carrying costs.

Factors Favoring Selling the Land

·        Need money now - selling can provide a lump sum of cash immediately pay off debts or fund other plans.

·        Too costly to keep - if the property taxes and maintenance exceed your budget, it may be best to sell.

·        Lack of development potential - does the land have limited income producing potential and is not near growing areas?

·        Burdensome obligations - are there complex mineral rights agreements, easements, or other encumbrances that complicate ownership?

·        No emotional ties - if you have no connection to the land, the practical thing may be to sell it and collect the cash.

As you can see, there are good arguments on both sides. Take time to analyze your specific situation before deciding whether to keep or sell the inherited land.

Get an Appraisal to Estimate the Land's Market Value

Before fully deciding what to do with the land, get a professional appraisal. This will give you an objective estimate of what the property could sell for on the open market.

Contact 2-3 certified appraisal firms who service the county where the land is located. Provide details on the acreage, any structures or resources on the property, and access details. Request a quote for an appraisal report.

Expect fees in the range of $300-$2000 depending on the property specifics. It's well worth this upfront cost. The appraisal gives you key data to inform your decision making.

Make sure to verify the qualifications and credentials of any appraiser. They should have substantial experience valuing vacant land in the local area. The appraisal methodology can impact values significantly, so quality counts.

Ideally have multiple appraisals done. It's not uncommon for appraised values to vary by 25% or more between appraisers. This gives you a range of potential market value.

Actively Market the Land if Selling

If after receiving the appraisal you decide to sell the inherited property, active marketing is the key to maximizing your sale price.

The appraisal provides an estimate of market value, but doesn't actually guarantee the price a buyer will pay. You still have to find qualified buyers and negotiate a top dollar sales price through skilled marketing.

Here are proven tactics for selling land:

Hire a real estate agent who specializes in land transactions. Their expertise with pricing, marketing, negotiations, and paperwork is vital. Offer them a competitive commission percentage to motivate results.

Post classified ads online listing the land for sale on Craigslist, Facebook Marketplace, and niche real estate sites. Include eye catching photos and all key property details.

Network with buyers - connect directly with developers, farmers, timber companies, and others in the county who may be interested in purchasing land. Cold calling and emails to targeted buyers gets the word out.

Install visible for-sale signs on the road frontage of the land. Include your phone number and email. Many potential buyers will randomly notice the signs and contact you. Don't underestimate this simple tactic.

Market to neighbors - adjacent landowners are great prospects since they know the area and may want to expand their holdings. Stop by in person to discuss a possible sale.

Offer owner financing if needed to expand the pool of buyers. Some may need a land contract agreement to purchase the property in installments over time. This results in a higher sale price.

It typically takes 1-2 years to sell vacant land at top dollar. Be patient and persistent until you secure a buyer willing to meet your price.

Consider Selling to a Land Company

Another option is to contact land companies and see what cash offers come in. Companies like Land Boss have funds available and are actively looking to buy land at discounted prices in Washington and other states.

There are some potential advantages to selling to a land company:

·        Cash sales close quickly - land companies have their own capital on hand and won't need to deal with financing contingencies.

·        Fair market value offers - experienced companies make data driven offers based on nearby comps and trends.

·        No fees - there are no commissions or closing costs since it's a direct sale.

·        Flexibility - many sellers want to close quickly after inheriting land. Companies can accommodate this if needed.

The main downside is that companies pay below retail market value in order to profit on their investment. But for many inheriting land, a fast low-hassle cash sale makes sense.

Reach out to a few land buying companies for quotes. Compare multiple offers.

Pay Annual Property Taxes on Time

Whether you sell quickly or decide to keep the land for now, you are responsible for paying property taxes on time. In Washington, taxes are managed by county assessors and due twice a year - April 30th and October 31st.

Contact the assessor to get details on tax amounts owed. Set calendar reminders so you never miss payment deadlines. If selling the land, make sure to prorate taxes at closing so both buyer and seller each pay a portion.

You can lose the inherited land if you fail to pay property taxes. The county will put a lien on the property then possibly take ownership and auction it off. Stay on top of this crucial responsibility.

Explore Financing Options to Fund Carrying Costs

If keeping the inherited land for the mid-term, explore financing options to pay for taxes, maintenance, and other carrying costs. Financing provides operating capital so you can retain ownership rather than being forced to sell at a low point in the market.

Types of financing to research include:

·        Bank or credit union loans - often the lowest rates but rigorous credit and income requirements

·        Hard money loans - based on property equity with easier approvals but higher rates

·        Private lenders - sole individuals or groups who lend for profit at mid range rates

·        Seller financing - some buyers may offer this creative option to purchase the land

·        Personal loans - borrowing from family or friends if they have capital available

·        Timber/crops/resources - harvesting and selling resources on the land itself

Run the numbers to determine the most cost-effective financing method for your situation. Leveraging the equity in the property can allow you to hold and profit long term. But loans must be repaid, so factor in this future obligation.

Get Professional Help Ongoing Land Management

Owning vacant rural land, even debt-free, requires significant time and effort. There are many important responsibilities:

·        Monitoring the property for trespassers and illegal dumping

·        Performing maintenance like brush clearing, tree trimming, etc

·        Managing paperwork like taxes, mineral rights, etc

·        Marketing and fielding offers if you decide to sell

·        Working with tenants if any structures or resources are leased

·        And much more....

Rather than taking all of this on yourself, consider hiring a land management company to handle the majority of responsibilities. For an annual fee a property manager will take care of the myriad details on your behalf.

Costs vary based on services rendered but expect to invest around $500 - $5000 per year for professional land management. This frees you to simply be a passive owner while experts handle the day-to-day workload.

Final Thoughts

Inheriting vacant land in Washington can be a great opportunity but also a major burden if you aren't prepared for the responsibilities and costs involved. Use this detailed guide to understand your options. Get organized, consult professionals, and execute a smart long-term strategy. With proper planning you can turn your inherited land into a valuable asset and legacy to pass down someday rather than a source of stress. The key is making informed decisions from the start.

Frequently Asked Questions (FAQs)

What taxes will I owe on inherited land in Washington?

You will be responsible for paying annual property taxes to the county where the land is located. Taxes are based on the assessed value and are typically due in April and October. Make sure to get on the mailing list with the county assessor so you are informed of amounts due.

Do I have to keep paying the mortgage on inherited property?

If there is an existing mortgage on the land, you are not personally responsible for paying it unless you co-signed on the loan. However, the land itself still secures the debt. Any lender recorded lien remains attached to the property. You will need to either pay off the mortgage or have the buyer take over payments if you sell.

How much does it cost to get an appraisal on vacant land?

Appraisal fees vary based on the acreage and location, but typically run $300-$2000. Larger rural parcels on the high end of that range and smaller subdivided lots on the low end. It pays to get multiple quotes. Make sure the appraiser has experience with vacant land comparable to the property you're having appraised.

What maintenance costs come with owning vacant land?

Aside from taxes, basic maintenance like clearing brush, removing trees, trash removal, fixing damaged fencing, etc could run a few thousand dollars annually. Significant costs won't be incurred unless you develop structures on the property. Maintaining raw land is relatively low cost.

How long does it take to sell inherited property?

It typically takes 1-2 years to sell vacant land if you want to get full market value. Clearing title issues, marketing nationally to find buyers, negotiating the sale, and closing the transaction takes patience. If you need to sell quickly, consider a direct cash offer from a land buying company which can close in weeks or months.

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