Your Guide to Selling an Inherited House

When a loved one passes away, it can be a challenging time. There may be many things to take care of, such as deciding what to do with their home. As the person who inherited a home, you typically have two options—you could keep it and move into the home, or you could sell the inherited home. 

Things to Consider if You Keep the Home

There are costs associated with keeping an inherited property. You have to verify the property taxes are current, you will need to refinance the home if there was a mortgage on it, and you will have to obtain homeowner’s insurance. Furthermore, you will have to make any repairs to the property.

Some neighborhoods have HOAs (HomeOwner Associations) that have monthly dues which need to be paid. Before deciding to move into the home, you need to make sure you can afford these costs. Otherwise, it might be more advantageous to sell the property. 

Steps for Selling an Inherited Home

It is common to sell the home and use the proceeds for other purposes after inheritance. While selling the home is not much different from putting your own home on the market, you need to be aware of some key differences and added costs. 

You will be responsible for maintaining the property until it is sold. You may need to make repairs, keep the electricity on, pay property taxes, mow the grass, keep the home heated and cooled, and so on. 

If there is a mortgage, you will have to continue to make mortgage payments until the home sells. However, the mortgage company may work with you to suspend payments and only require you to pay interest pending the home’s sale, but you should never count on this.             

Keeping these things in mind, several steps will need to be taken to sell the home.

Step #1: Establish your right to sell the home. 

There are different legal processes to establish your right to sell the home, including a living trust, a will, a beneficiary deed, or going through the probate process. You may want to hire a wills and estate lawyer for assistance if the deceased did not have one. 

Step #2: Understand any tax implications for selling the home.

There are different tax liabilities you may need to pay when selling an inherited property. These could include:

Property Tax – Property taxes will need to be paid current once the property sells.

Capital Gains Tax – If you sell the property for more than the value when you inherited it, you could have to pay capital gains tax.

Estate Tax – Estate taxes are taxes paid on an estate when the property is transferred to the beneficiary. These are also known as inheritance taxes.

There could be certain tax exclusions for paying taxes, depending on your particular situation. If you have further questions, you should consult with your tax accountant or wills and estate lawyer. 

Step #3: Update the home’s insurance policy.

As the home will be vacant, there can be risks of break-ins and vandalism. You need to make sure the insurance policy is updated accordingly to ensure if there are any damages, they will be covered. Alternatively, you could install a home security system, which could help lower the insurance rates. Not to mention, it could be a selling perk for potential buyers. 

Step #4: Decide how to sell the home.

You have three options when selling an inherited home: You could decide to go the FSBO (For Sale By Owner) route, hire a real estate agent, or sell to a cash investor. 

Step #5: Request your cash offer.

When you use a cash investor, you do not have to waste time doing a detailed cleaning of the home, taking care of repairs or maintenance, staging the home, signing a contract with a realtor, or doing other such tasks. Instead, you submit information about the house in its current “as-is” state to request an offer for the home. 

Step #6: Review the cash offer and accept it if you want.

Once you receive the cash offer from your cash investor, you review it and decide whether to accept it or not. If you choose to accept the offer, the sale proceeds, and the closing is scheduled. 

How Long Does It Take to Sell an Inherited Home?

It depends on the method you decide to use. If you opt for FSBO or use a real estate agent, it can take much longer than using a cash buyer. Other factors to consider are the current housing market conditions. If homes are not selling that fast in your area, it could be on the market for six months or longer. 

What Is the Fastest Way to Sell an Inherited House?

If you want to save time and money and you don’t want to make repairs or do any maintenance, but just want to sell the house quickly, you have two general options. You could consider an as-is sale where you sell the home in the same condition as you received it. Doing so could help you avoid paying capital gains taxes as well. 

The second option is to sell the home as-is to a cash investor like 800CashToday. You do not have to hire a real estate agent, make repairs, worry about closing costs, or do anything else to the property to prepare it for sale. 

Step 1: Provide the information about the home.

Fill out our online form with the home’s address and your contact information.

Step 2: Schedule an in-home or virtual consultation.

During the consultation, we will evaluate the property and the estimated cost of repairs to determine its value.

Step 3: Receive your cash offer.

You will be presented with a cash offer from our cash investor for the sale of the inherited property.

Step 4: Accept or decline the offer.

If you like the offer and accept it, we will proceed with setting up closing procedures. If you do not like the offer, you are free to decline it without any obligations. We will work with you to give you the best possible cash offer sale price for the home. 

Best of all, you don’t need to hire a real estate agent, make repairs, or do anything else to prepare the home for sale. Other benefits sellers receive include free credit repair, free local moving, 7-day escrow, and up to a $10,000 cash advance if desired. 

We can also close quickly and can often be ready to close in about a week’s time. If you still have belongings to move out, you are free to choose your desired move-out and closing date that works best for you. 

For further information about selling an inherited home, please feel free to fill out our online form or contact 800CashToday at 1-800-CashToday.

FAQs

How Do I Avoid Capital Gains on an Inherited Property?

The IRS considers inheriting a home to be a long-term capital gain. To avoid paying capital gains on the property, like when inheriting a parent’s house, you can sell it quickly for the inherited property value or less. Should you sell it for more than the inherited amount, then you would be responsible for capital gains on the property. 

Does Selling an Inherited House Count as Income?

Selling an inherited house does not generally count as income. However, if the value of the home has increased since you inherited it, and you sell it for more than the inherited value, then you would have to claim the difference as income, report the sale to the IRS on your tax return, and pay capital gains taxes on that amount. 

Is It Better to Keep or Sell an Inherited Home?

Deciding whether it is better to keep or sell an inherited home varies from person to person. For example, if you want to keep the home as your primary residence or a rental property, then you may want to keep it. On the other hand, if the home needs a lot of work, you live far away, or you already have a home you want to keep, then selling it makes more sense.