Inheriting a house is a bittersweet occasion that requires delicate handling – especially if you aren’t the only person who the house or property has been left to. If you’re interested in selling an inherited house, there are some things you should know first. To learn more, read our article.
So you recently inherited a house. Now what? You have a few options now that the house is yours. Selling the house may be hard sentimentally, but time and money wise it may be your best option.
Selling an inherited house is different than selling your own house. How?
Keep reading and we’ll tell you. Here are ten things you should know about selling an inherited house.
1. Taxes are Owed
You have to pay taxes on profits from selling your own home. You’re required to pay taxes on profits from an inherited house, too.
How does this work if you didn’t purchase the home originally? The capital gains tax you’ll be required to pay is calculated from the home’s value at the owner’s death.
If you don’t sell the home, you’ll have to pay income tax. So either way, you’ll have to pay taxes on the inherited home.
2. There May be Other Heirs
Selling an inherited house can be tricky, especially if there is more than one heir. Before the house can be sold, you must find out who the heir(s) are.
There may be issues involved when determining who inherited and has rights to the house. If there are, they’ll need to be resolved before the house can be sold.
3. Updates Increase Profit
If you plan on selling an older home, it’s in your best interests to update the home first. If it’s older, it likely needs some fixing up.
Maybe a bathroom isn’t in the best working order, or flooring is worn out. Whatever needs to be fixed, don’t be afraid to fix it.
Why should you update? Because any updates you make can help reduce your tax bill.
4. Vacant Home Insurance Protects the Home
When you inherit a home, you may want to get vacant home insurance to cover it. This will protect the home before you sell it.
Vacant home insurance will protect the home from liabilities, but it will need general upkeep as well. Don’t let the home fall into disrepair, especially if you plan to sell it in the future.
Some things you’ll need to do include getting items out of the house and caring for the lawn regularly.
5. Lots of Emotions are at Stake
Even if there’s not another heir or anyone else who lays claim to the home, the items inside hold sentimental value. Before selling the home, consider those who may be most affected.
Offering items to loved ones will likely be an appreciated gesture. While it may be tempting to sell it all or keep it for yourself, those may not be the best ideas.
Inheritances can carry a lot of family emotion, so be careful when selling is involved. Make sure all will items are honored before selling anything.
6. The Home Should be Inspected
Since you’re inheriting the home you likely won’t be as familiar with it as you would if you lived there. Even if you visited frequently, there may be issues with the home you don’t know about.
Getting the home inspected is a great way to catch any issues, whether previously known or unknown.
If the home needs a water heater replaced or termite damage fixed, you’ll want to know about it.
7. You Should Get the Home Appraised
Just like any other home you sell you’ll need to get the home appraised. Doing so will make sure you get the right price for the home.
Don’t just assume the value of the home. Find out what the value truly is so you can advertise and sell it correctly.
Getting as much profit from the home as possible may allow you to do things you’ve always wanted.
Maybe you’ve always wanted to take an extended ski vacation in Europe. Or have you considered having a second home in Myrtle Beach? Learn more here about living in Myrtle Beach.
8. You Can Sell the Home As-Is
You may not have the time, money, or desire to fix the house up if it needs repair. If that’s the case, you can sell the house as-is.
Even if the house has serious issues, it may get picked up by a house flipper. True, you’ll get less for the house this way, but you’ll sell it faster since you aren’t working on it first.
9. You May Want to Consider Renting
If you’re selling the house for the purpose of making a profit, consider renting the home. Instead of one big lump sum, renting will give you a steady income.
Renting the house will require on-going care and maintenance, though. So if you’re not up for that, selling is a better option.
10. Patience is Required
Dealing with an inheritance can be a lengthy process. Wills need to be taken into account. Paperwork needs to be handled.
And you’ve got to do your research. Make sure there aren’t any unknown wills, other heirs, or other details that could complicate things.
If many people are involved, the process could take even longer. Many opinions and emotions can drag things out.
Make sure everything is done correctly and you’ll make it through okay. But you may have to be patient to get to that point.
The Perks of Selling an Inherited House
Selling an inherited house can be somewhat of a pain, but will likely be worth your while. If you’re overwhelmed by the house you just inherited, selling it is probably a good option.
While homes have sentimental value, an inherited home also provides a great source of money for those it’s left to.
There’s a lot to consider when selling an inherited home, but it’s worth it in the end. Keep these ten things in mind for a smoother experience.
Are you ready to sell? Check out our article on the importance of staging when selling a home.