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

Before deciding whether to keep an inherited property, review property taxes, insurance, maintenance, and any mortgage. Contact the mortgage servicer to discuss the loan and the documents needed to establish your interest in the home. Ask about available options rather than assuming a refinance is required. The CFPB explains mortgage considerations for inherited homes.

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 the property has a mortgage, contact the servicer about the payment status, your responsibilities, and the proposed sale. Ask for any agreed arrangements in writing; do not assume payments have been suspended.

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 the tax implications.

Before accepting an offer, ask a tax professional to review the property’s basis, the proposed sale, and any reporting requirements. The IRS explains how inherited-property sales are taxed: a sale for more than your basis can result in a taxable gain. Selling the house as-is does not by itself eliminate tax.

Also ask about property-tax balances and any estate or inheritance questions relevant to the property. These are separate matters that should be reviewed for your circumstances.

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 explore selling without completing repairs first, compare an as-is listing with a direct cash offer. Our guide to selling your house as-is explains questions to ask about inspections, conditions, and timing.

A direct cash buyer such as 800CashToday can evaluate the inherited property in its current condition. Review the proposed price, costs, conditions, and closing date before deciding whether the offer fits your plans.

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. 

Ask our team which seller benefits apply to the property and what terms apply. We can explain our home-selling process and discuss your preferred timing.

The closing timeline depends on the property, ownership documents, and the steps needed to complete the transaction. Discuss both the closing date and the move-out date with our buyer.

For more information, contact 800CashToday about your inherited property or call 1-800-227-4863.

FAQs

Could I owe capital gains tax when selling an inherited house?

Tax treatment depends on your basis and the details of the sale. The IRS explains that selling inherited property for more than your basis results in a taxable gain. Ask a tax professional to review your situation before assuming that selling quickly or selling as-is avoids tax.

Does Selling an Inherited House Count as Income?

The sale may create reporting requirements and a taxable gain. Your sale proceeds and taxable gain are different figures. Review the IRS guidance on inherited-property sales and ask your tax professional how it applies to you.

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.