How To Sell An Inherited House

Probate Real Estate | What to Do When Somebody DIES

Have you recently inherited a house but you don’t know what to do with it? In this video, I’m going to walk you through all of your options for dealing with an inherited house. While a loss is always a sad and stressful time, this information will give you a really good idea of what steps you should take next.

What To Do With An Inherited House

Depending on the condition of the house, your location, and the circumstances behind getting it, inheriting a house from a loved one may be a blessing or a complete disaster. There are three things that you can do with this house: move into it, rent it, or sell it. But before you figure that out, you need to get the answers to the following questions.

#1: Does the property have a mortgage on it? If so, find out how much is owed, what the balance is on the house, and what the payment is. You then need to let the mortgage company know that the owner has passed, and they will let you know what paperwork they need from you to give you access to the information. And please: make sure that this mortgage is getting paid while you get through all the things that you need to do for this house. This house may be a money pit for you.

#2: Is the house behind on payments or underwater? Do you have any equity in the home? If the house is behind on payments, this may help you decide if you want to sell. If it’s really far behind on payments, you may need to sell quickly. If there’s not enough equity, the mortgage company may allow you to do what’s called a short sale. A short sale is when you sell the property for less than what is owed on the mortgage.

#3: Does the property need repairs? If so, you’re going to have to take a walk through the property. Does it need a lot of cleaning up? Does it need stuff hauled out of it? Is it outdated? Does it need a lot of updates done to the house? Does it need a major facelift? All of these questions can determine what you may or may not do with the property.

Understanding Your Options

If you’re looking to sell the property, you might need to figure out how many repairs it needs for you to put it on the market. How much do you have to pay to get this property to go on the market for you to get the most money out of it? The key here is that you put your money into the parts of the house where you’re going to get the biggest bang for your buck when you sell it.

If you’re looking at just repairing it enough so that you can rent it out, you don’t have to go to the same extent as you would in selling it. You may be able to just paint older cabinets, essentially putting some lipstick on it so someone can live in it while you keep it. That being said, please remember to check how much rent you can get for this property for the condition that you plan on renting it in. If it’s not as much as the mortgage payment, you may consider selling it instead.

Another option is to sell it to an investor, especially if you’re looking to get out quickly. Many companies—just like my company, New Generation Home Buyers—buy quickly and as-is. This means you don’t have to make any repairs, and we pay cash. This is also a great option if the house is behind on payments or if you just don’t want to deal with renting out a house.

It’s All In The Details

When deciding what to do with an inherited house, you also need to look at a few more details. The first thing you should found out is who has rights to the property. This will influence how many decision-makers need to be consulted before you put a property on the market or rent it out.

Depending on how many people have rights to the property, just remember that you’ll be splitting the profits from either a sale or the rents between all of those people. If there’s a difference of opinions with people that have a stake in this property, those that want to keep it can buy out those that don’t.

Lastly, you’ll need to consider is the capital gains that you might pay when you’re selling this inherited property. At the time you inherit the property, you get what’s called a stepped-up basis as of right now. What that means is that at the time you inherit the property, the value of that property—if you were to sell it for that value—will cost you zero in capital gains. However, if you decide to rent it out and keep it for a year, you’re going to have to pay capital gains tax on however much the house.

I’m not an accountant, but you want to make sure that you speak with one so that you know all the ins and outs of the tax ramifications when you’re dealing with this.

What Will You Do With Your Inherited House?

I hope that this gave you some information on how to weigh your options when you inherit a house. If you do have any additional questions, please feel free to give me a call and I can help walk you through each of these steps.

If you just know that you’re interested in receiving a cash offer for your property, please feel free to give New Generation Home Buyers a call. We buy as-is, we can pay cash, and we buy quickly and on your timeline. I have been in this business for over 20 years, so please feel free to reach out to me and I’ll be happy to connect.

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