A Guide to Selling an Inherited House
When a loved one passes away, inheriting their home can be bittersweet. While full of memories, an inherited house also comes with practical considerations if you sell it. What steps should you take? What are the tax implications? This guide covers the key things to know when selling an inherited house.
Deciding Whether to Sell an Inherited Property
Before listing the home, think carefully about your goals. Do you need the equity to pay other expenses? Or would you prefer to keep the house for sentimental reasons? Discuss the options with family members, as they may feel strongly one way or the other. You’ll also want to evaluate the house—does it require significant repairs? How’s the local real estate market? Understanding your financial needs and the home’s condition will help inform your decision.
Steps for Selling an Inherited House
If you decide to sell the inherited property, you have two main options:
- Sell with a real estate agent
- Sell to a cash offer company
Selling with an agent involves listing the home on the open market. A cash offer company will buy the home directly from you. Here are the key steps for each:
With a real estate agent:
- Probate – If the deceased did not leave a will or if the will is contested, you’ll need to go through probate court to settle the estate. This can take weeks or months.
- Clear the title – You must verify you have full legal rights to sell the home. Pay off any existing mortgages, liens, or other claims against the property.
- Make repairs – Inspect the home and make any necessary repairs or updates to maximize the sale price. This includes decluttering, painting, landscaping, and fixing broken or outdated elements.
- Price competitively – Research comparable homes recently sold in the neighborhood. Price the home strategically based on market data.
- Hire a realtor – Interview several agents and find one you trust who understands the local market. They will handle marketing, showings, and negotiations.
- Review offers – The realtor will help you objectively evaluate and negotiate offers for the best deal. Be prepared to make compromises.
- Close the sale – Once you accept an offer, the realtor and your real estate attorney will handle all the paperwork and logistics of transferring ownership to the buyer.
The traditional selling process provides the highest potential sale price but requires time and effort to prep, list, and sell the home.
With a cash offer company:
- Probate – If required, you’ll still need to complete probate to settle the estate.
- Clear the title – Verify you have full rights to sell the home before proceeding.
- Get a cash offer – After submitting some basic information about the home, the company will provide a cash purchase offer.
- Accept the offer – If you’re satisfied with the cash price offered, you can simply accept it on the spot without listing the home.
- Close quickly – Once you accept, the company can close within a few weeks. You won’t have to prep, list, or show the home.
- Sell as-is – These companies buy homes in any condition, so you avoid making repairs.
- No commissions – You won’t pay any realtor commissions or closing costs.
The main benefits of a cash offer company are it’s fast, and you don’t have to do repairs or list publicly. The downside is that you may get a lower price than the open market. However, when you factor in the money and time saved on realtor commissions, closing costs, repairs, remodels, seller concessions, and the hassle of prepping and showing the home, the net proceeds from a cash offer company may end up being very similar to listing on the open market. So, for some sellers, the speed and convenience of accepting a cash offer can be worth it to avoid the stress and uncertainty of the traditional selling process.
Tips for Selling An Inherited House Successfully
Selling an inherited home brings unique challenges. Keep these tips in mind:
- Be patient with a realtor. It may take longer to sell than a traditional home. You can’t control market conditions.
- Prepare for taxes either way. Consult a tax professional to understand capital gains taxes when selling.
- Expect emotional moments. This process can be sentimental as you let go of the family’s memory-filled property.
- Hire professionals. Real estate attorneys can help avoid costly mistakes.
- Time it right if using a realtor. List during peak seasons for real estate activity—usually spring and summer.
- Be flexible on terms. You may need to negotiate to get the best deal.
With proper planning, selling an inherited home can go smoothly. While bittersweet, you’ll gain equity to fuel other goals. With the right approach, you can make sound decisions during an emotional time.
Commonly Asked Questions About Selling An Inherited House
In most cases, yes. If the deceased did not leave a will or the will is contested, you’ll need to complete probate before selling the inherited property. This ensures you have full legal rights.
A realtor provides the highest sale price but requires more time and effort. A cash offer company is faster but may pay less than market value. Compare the options.
Focus on curb appeal and any fixes that make the home more livable and marketable, like flooring, appliances, paint, and landscaping. Fix major issues.
Consult a tax advisor, but you may owe capital gains taxes on any profit from the sale price versus the home’s valued basis at the time of inheritance.