Selling a House You Inherit: Everything You Need to Know
Selling a house you inherit can become a complicated, and emotional experience filled with legal challenges. Understanding the legal and financial landscape can guide your decisions and help you navigate the process efficiently. Here’s a detailed look into selling an inherited house, the challenges you’ll face, and your various options to ensure a positive home sale.
Understand the Legal and Financial Implications
Inheriting a house brings several legal considerations. Approximately 0.6% of all U.S. adults inherit property each year, including houses. Of these, around 55% choose to sell the property due to various reasons such as maintenance costs and tax implications.
Ensure you consult a real estate attorney or estate planning attorney to navigate these waters, especially if there are multiple heirs or outstanding debts. Failure to move fast and deliberately will cost you in property taxes, and local taxes.
Get the Property Valued
An essential step in the sales process is to accurately value the property. Real estate market conditions can fluctuate, affecting property values. For instance, the Federal Housing Finance Agency reported that house prices have increased by approximately 4.6% over the past year. A professional appraisal will help set a competitive and fair market price.
NOTE: You can also get an unofficial valuation from a local real estate agent or real estate investment company that buys homes. These options are free compared to an appraiser.
Clearing the Title
Ensure the property title is clear, as title issues affect 11% of real estate transactions, delaying about one in three closings. Addressing any liens or disputes early can prevent sale delays. This is where a probate or estate planning attorney can help.
NOTE: The process of selling a home in California varies heavily depending on whether you’re selling a property in a trust or not.
Prepare the House for Sale
The presentation of your inherited property can significantly impact buyer interest. Statistics show that staged homes sell 88% faster and for 20% more than non-staged homes. Investing in minor repairs and cosmetic improvements can increase the home’s market value by an average of 3.5%.
With that said, many people who are selling a home they inherit do not have the time or money to make the often-extensive repairs needed to sell the home. That is why it is a popular option for beneficiaries to sell their inherited home fast for cash with a local homebuyer.
Choose the Right Selling Strategy
Choosing the right strategy for selling is crucial. While 89% of sellers use a real estate agent, many will opt to sell their house “For Sale By Owner” (FSBO) and save on commissions and fees. That said, make sure you are working with a reputable homebuyer if choosing to go this route.
Marketing Your Property
Effective marketing strategies are essential. Over 93% of homebuyers use online resources in their home search, and homes with high-quality photography sell 32% faster. These platforms will help you get exposure but they also cost money.
If your house is in need to repairs or requires a fast and easy sale, you are better off contacting local investor groups in your area first before spending more money on marketing.
Understanding Tax Implications
The tax implications of selling a house you inherit can be significant. If you sell a property that has grown in value, you might owe capital gains tax on the difference between the sale price and the original value. Luckily, only about 0.7% of people owe federal estate taxes, thanks to the high federal exemption levels.
Closing the Sale
Finally, during the closing process, ensure all paperwork is in order. Legal and financial mishandlings can derail the final stages of the sale Thankfully this only happens in approximately 2% of real estate sales. That said, it pays to work with a reputable buyer.
Conclusion
Navigating the sale of an inherited house requires a clear understanding of legal obligations, tax implications, and market conditions. In most cases, you will want to work with a group of professionals who specialize in buying and selling inherited homes in probate or trusts.
Do some research, ask around for referrals, and make sure you are making the right decision for you and your family.
If you’re selling a house you inherited that needs repairs, our team of cash offer specialists can get you a no-obligation cash offer for your home in as little as 2 days.
