Everything You Need to Know About Selling an Inherited House
While inheriting a house is a blessing to some, it’s a curse to others. Maybe not a curse in the horror movie/haunted house sense (at least, we’d hope not), but it can be emotionally draining and a time-consuming hassle to deal with.
No matter your reasons, if you’ve inherited a house and want to sell it, you’ve come to the right place.
Is selling an inherited house the same as selling a regular house?
Simply put, no — there are different things to handle and deal with. Here are some important questions to consider before we dive in:
- Does the house have an existing mortgage?
- Are you the sole inheritor or was it left to multiple people?
- Have you lived in the house?
Does the house have an existing mortgage?
Finding out if there’s a mortgage or reverse mortgage right away. Do not pass go until you do! Whether or not there’s a mortgage determines your timeline, as well as the price you need to get for the house.
Are you the sole inheritor or was it left to multiple people?
Regardless of your answer, you’ll likely want to hire a real estate agent (use Cashifyd for cashback at closing). They’ll have the best understanding of how selling an inherited house works, especially if multiple people are involved. Plus, as of May 2020 we’re in the midst of a really hot market — agents often are able to ask for (and get more) for properties.
Not to mention, an agent takes so much responsibility out of your hands. Especially for those who are grieving the loss of a loved one, trying to sell a house ends up being just another burden. Agents can also navigate the family dynamics that can sometimes boil over when the will gets read.
In addition to an agent, hiring a lawyer might also be a good move. If your family/other inheritors can work out the kinks on your own, you’re probably fine. But lawyers are overall useful for changing over titles, establishing real estate trusts, and other complex legal components of home selling.
Have you lived in the house?
If you have, you’ll likely need to fill out a condition report that states the defects of the home. If you haven’t, you won’t need to fill this form out but you will have to sign some paperwork that says you never lived there.
There is some benefit to living in the house before selling, particularly if you qualify for the Home Sale Tax Exclusion. When you inherit a home, you won’t be eligible for this exclusion unless you live in the property for at least two years. After that, you might qualify and have the first $250k-$500k of a home sale be tax free.
Another thing to note: The value of the house is calculated on the day the original homeowner dies. But if you sell your inherited property at that value, you won’t have to pay taxes. However, if you sell this property above fair market value, you’ll have to pay taxes on the difference (i.e. a $700k home that goes for $710k would mean you’d be taxed on just that extra $10k)
When is selling an inherited house a good idea?
To be clear, if you want to keep the house in the family, we’re not here to push you. We just know that there are some major benefits to selling an inherited home, both financially and sometimes emotionally. It makes sense to sell if:
- The house is a source of grief
- You don’t have the time to deal with the property
- You live far away from the property
- Selling would provide you more immediate financial relief
If you decide to sell, you’ll probably want things to go as fast as possible (while still getting your money’s worth). Use RealtyHive as a resource. Our time-limited events connect motivated sellers with motivated buyers, and you could even get some additional cash back in the process. Learn more about the benefits of selling — we hope that whatever happens with your inherited house ends up being the right move for you.