Selling an inherited house can be emotionally difficult, as it is a valuable asset for the family. But maintaining the property comes with a lot of financial challenges. In such a situation, you can either sell it, move into it, or rent it. The easiest option among all is to sell it, especially if you are facing financial issues. Selling the house for cash is the fastest option, and it also saves you from the traditional real estate processes.
Reasons to Sell Your Inherited House
Inheritances can have a lot of emotional as well as financial consequences. The stress that comes with it is sometimes hard to handle. The best option is to sell the house because of multiple reasons discussed below:
1. Empty Houses Can Be Expensive
A house that is left unused and vacant adds to certain fixed costs like mounting costs, property taxes, homeowners' insurance, utilities, and maintenance. These costs can be financially draining, especially when the property is not used. Also, if the house is empty with nobody living there, it will deteriorate over time, and its value will drop substantially.
2. Renting Can Be Exhaustive
It gets difficult if there is more than one heir of the same house, as both cannot live together. In such cases, you either have to sell the house or rent it. Renting the house can be costly as well as time-consuming for co-owners. There are certain downsides to owning a rental property, and therefore, you should assess whether you can bear the hassle of renting the property or should consider selling it.
3. Inherited Houses Are Generally in Poor Condition
Mostly, inherited properties are in bad condition because the homeowners are elderly or incapable of maintaining them. The beneficiary will be required to get the necessary repairs done, which can be costly.
4. Probate is Expensive
After the death of a loved one, their inheritance is put into a court process called probate. It is a legal proceeding to settle the transfer of ownership. This process can be complicated, time-consuming, and expensive, especially at a time when the family is already grieving the loss of their loved one.
5. Profit on Tax Breaks
You won't have to pay capital gains tax if you instantly sell the house after inheriting it, even when there is a significant increase in the value since the previous owner purchased it. For tax purposes, the house's value at the time of the death of the previous owner is based on its current value and not on its original purchase price. When you sell the house, the tax is levied on the increased value for the period when the property was in your hands. Therefore, you'll save a lot on tax by selling the house fast.
How to Sell My Inherited House Fast?
Here are the steps to sell your inherited house fast:
1. Know About the Mortgage
It is important to understand the mortgage as a new owner of the house. Check for any unpaid debts, reverse mortgage, or a home equity line of credit. This will ensure that you need to work on any issue related to the property title. Since you are the new owner now, you have to pay all the pending mortgage payments. It is important to take action and solve these issues fast.
2. Understand Your Ownership Timeline
The timeline before you legally inherit the house depends on how you inherited it - probate inheritance, transfer on death deed, or living trust. It is important to understand this, as you cannot sell the house before it is legally in your name. You will get the house fastest when inherited through a living trust or life estate deed, as court approval is not required to sell the property. On the other hand, probate takes the usual time due to the judicial process.
3. Coordinate With All Heirs
Coordinate with all the heirs of the house and identify the named executor. In case the previous owner has not mentioned any name, the heirs must choose an executor among themselves. The executor will make the final decisions and take care of the house.
4. Open a Bank Account
The executor should open a bank account in the name of the deceased person's estate to settle all the financial obligations, including probate-related expenses.
5. Consider Selling for Cash
If your priority is to sell the house fast, selling it to cash buyers is the best option, as it is less stressful. It will also save you from the hassle of the sale proceeds, unlike selling it on the market. You might get less value out of the sale, but the process will be much faster and easier.
6. Find a Professional for Probate
If you prefer selling in the market, it's a good idea to find a real estate agent with probate home sale experience. This way, you can get maximum sale proceeds.
7. Take the Help of a Mediator
If it is difficult for all the heirs to reach an agreement, it's better to hire a mediator. This will reduce the time that will be wasted on disputes. The mediator can help resolve issues outside the formal court setting.
8. Upgrade but Don't Renovate
Before selling the house, you might need some minor repairs and upgrades done in the house. But don't go for full renovations as it is a time-consuming process. Take advice from your real estate agent and get only those upgrades that will increase the value of the house.
Factors to Consider Before Selling an Inherited House
There are a few factors you should consider before selling an inherited house. This is because the selling process of an inherited house differs from selling a vacant or old home.
Property Value
Research the market value of your house with the help of an agent. This can be done by comparing it to other properties in the same location or by estimating the value with the help of online tools. There are other factors that affect the market value of your house directly, such as the local housing market and the condition of the house.
Debts
Apart from the mortgage, also check for debts. Check if there are any unsettled bills, unpaid property taxes, or liens. If you find any debts, you can postpone the sale, as most of the money from it would go towards paying the debts.
Tax Implications
There are many taxes that you need to pay for selling your inherited house, like capital gains tax, tax on the sale, federal estate tax, and property estate tax. You may have to pay the inheritance tax after you have inherited the house as the owner. The laws and the tax implications vary from one state to another.
The Fastest Way to Sell Your Inherited House
Selling your inherited house for cash is the quickest and efficient way to do so. This removes the need for costly repairs, reduces the wait time for inspections and appraisals. All the profit from the sale remains with you without any commission. You can also sell your house without the necessary repairs. The sale proceeds may be lower than selling after renovations, but time is saved.
Conclusion
It might be an overwhelming process to sell an inherited house, considering the number of processes one needs to go through before the actual sale. But, you can ease out the process by knowing about the laws and right considerations to make before you sell the house.
