How to Sell an Inherited House: The “Do”s and “Don’t”s
Typically, the last way that anyone wants to acquire a new home is through inheritance. However, this scenario is more common than many might think. In some cases, it may make sense to either live in or rent the house, but more often than not, people are most interested in how they can sell an inherited house.
Suddenly becoming a homeowner may be overwhelming for some, especially if you’ve never had this kind of responsibility before. But worry not, selling an inherited house does not need to be difficult. Just remember that no matter what condition the house is in, where it’s located, or what it’s estimated value is, you have options.
How to Sell an Inherited House
When you have an inherited house that you wish to sell, you’re going to have a lot of questions.
- How much is capital gains tax on inherited property?
- Am I responsible for the property taxes on the house?
- How much is the house actually worth?
Fortunately, there are experts around who can help you get answers to all of these questions and more.
If you haven’t already, the first thing you may want to do is schedule a consultation with a real estate attorney so that your questions can be answered quickly. It also may be a good idea to speak with a local realtor who can help you determine the home’s value.
While speaking with an attorney can come at a costly hourly rate, speaking with a realtor will typically be free of charge. It may also be a good idea to speak with a local home investor to get a different perspective on what the house might sell for in the current market.
Make Sure That You Know Who the Rightful Owner Is
The first thing you should do before making any plans to sell the house is to verify ownership of the property. You may or may not be the rightful owner of the house or you may not be the only owner of it so you’ll need to check the will and the home’s title information out first.
If there’s a will, it will be much easier to make this determination but certain things can complicate matters when you’re trying to sell an inherited house fast, including:
- Numerous heirs
- Multiple marriages within family members
- Generations of people who died without wills
- Heirs who don’t want to work together
- Complications with the title
Indeed, any snag that you run into can affect everything about the house from the sale price to the probate process to determining whether or not you can use the home as a primary residence.
If there’s a will, all these things can be cleared up rather quickly; however, if there isn’t one and some of these things are unclear, you may have to enlist the help of a real estate attorney to help you sort through it all. These types of issues are ones you should never even attempt to settle these issues on your own.
Make Sure That You Get an Accurate, Realistic Price for the Home
Once you’ve confirmed ownership of your inherited property, the next thing that you’ll want to do is get an estimate of what the home is worth. When trying to estimate the value of the home, it’s always a good idea to check with a number of sources.
In today’s digital world, there are a number of online resources available that will give you a good baseline for the home’s value. You should also speak with a few local real estate agents to see what they think they may be able to get for the home.
Getting an estimate should always be a no-obligation process, so don’t worry about having to list the house with the first realtor you speak to. It is also the best way to make sure that the price you’re asking for the home is reasonable and realistic.
In some cases, a realtor may tell you that the house is just not in good enough condition to sell or the location makes it a tough sell. In these situations, it may make more sense to sell to a local home investor or cash home buyer.
In most cases, cash home sales tend to be fast, uncomplicated, and very convenient for the seller. Typically, an investor will come to take a look at the property and give you a no-obligation cash offer for the home in about a day.
Best of all, investors will be buying the home in cash outright which means there won’t be any need to work with a mortgage company or bank. This not only simplifies the process of receiving the money but means you’ll be able to close in a matter of days as opposed to weeks or months.
Be Prepared for Potential Problems with the Title
The issues that arise most often when selling an inherited property are title issues. Although most title checks end up being clear, the longer the home has been in the family, the more likely it is that there will be problems with the title in the end.
Inheriting a house that has been in the family for a while can bring with it numerous title problems, including:
- Illegal deeds
- Wills that were previously undiscovered
- Unknown liens against the house
- Errors in one or more public records
- Missing heirs
Luckily, identifying any issues with the home’s title is pretty straightforward. Hiring a title company to conduct a thorough check of the title is usually inexpensive and painless. In many cases, the title company is also a law firm, so they’ll be able to assist with any title issues the property may be facing.
Make Sure That You Understand All About the Taxes on the Home
The thing that people who inherit homes or properties are typically least prepared for is the tax implications. Figuring out the taxes on selling an inherited house can seem tricky at first, but it’s usually pretty easy to work out when you work with a pro.
When you inherit a home, you inherit everything that goes along with it, including any expenses and taxes on the property. In addition to standard taxes, you have to consider inheritance tax and the overall tax implications of selling that house, especially as it relates to your annual filing of income taxes.
There is also good and bad news when it comes to taxes on a home that is inherited. The bad news is that the exclusions regarding sales tax on homes usually don’t apply to inherited homes. Since most people that are selling an inherited property are looking to sell quickly, they won’t be living in the home long enough to take advantage of any tax breaks.
The good news, however, is that you can benefit from taxes because the fair market value of the home at the time of the sale is what determines how much tax you’ll pay. This means that if the home has appreciated in value since the last time it was sold, you won’t have to pay taxes on the difference because the law only considers the current value of the home.
Understand the Costs & Responsibilities of Holding A Property
In addition to figuring out how to sell an inherited house, you should also be making a plan for how to maintain the home until the home sells. The typical home sale can take anywhere from 30 days to a year, so it’s important to keep in mind that you’ll be responsible for taxes, upkeep, HOA fees, electricity, and any other costs that go along with owning a home.
In certain cases, you may qualify for a “vacant home” insurance policy. These policies protect you from certain liabilities including lawn care, paying the utility bill each month, and even general liability on the home.
The policies are inexpensive and will give you added protection against unforeseen costs. By law, a minimum of care is required on empty homes starting at the very moment the owner dies. Depending on how long it takes for you to sell the house, the care you give it could be either short term or long term.
In many cases though, the person who has inherited the home is just not willing to take on the financial burdens and does not have time to handle all of the paperwork and responsibility of homeownership. In these cases, selling your inherited home to a cash buyer can be the best option.
Instead of waiting for months for the home to sell, you can close on the sale of the home in about a week when you sell to a cash buyer. Companies like SFL Partners greatly simplify every step of the process for you.
In many situations, the new homeowner may just not have the time or funds to deal with fixing up a home. In this case, a home investor is ideal because you can sell a house as-is to them. So, not only will you not have to deal with fixing and cleaning the property, but you also won’t have to deal with showings, property taxes, maintenance fees, and all of the other headaches that go along with selling a home.
Sell An Inherited Home To SFL Partners
If you’ve recently inherited a property in South Florida and just want to sell it as quickly as possible, we can help. As a local home investor and real estate company, we can make you a fair, no-obligation cash offer in about 24 hours or we can help you list your home on the MLS.
We understand that the last thing anyone wants to deal with after the loss of a friend, family member or other loved one is paperwork, so we aim to make the process as fast and easy as possible for our clients.
If you’d like to get a better idea of what your home is worth, you can get started by filling out this form with your name and the home’s location. It will take us about a day to crunch some numbers on the property and get back to you with a cash offer for your inherited property.