If you’ve inherited a house after a loved one’s death, you may be wondering what your options are. Many people will choose to sell the property, but selling inherited property isn’t always straightforward, and there are many moving parts to keep in mind. We’ll go over some of the main aspects of inherited properties that you should consider if you are trying to sell yours.
Selling a home can be stressful enough on its own — adding in the potential complexities of inheritance can muddy the waters. We hope that this blog will help take some of the guesswork and stress out of your situation.
The Rightful Heir
Ideally, there will be a will that states a clear heir or heirs to the property. However, life can sometimes be far from ideal, and it is quite common for someone to pass on without a will in place that clearly states the heir of the property. There may be multiple people who have a claim on the property if a will was not in place. Before any property can be sold, the issue of whose property it is must first be addressed and resolved. If you have a claim on a property, be sure to get a lawyer to help you sort out your rights.
If the previous owner did leave a will, the house might be left to one person, or it might be left to a trust. If it was left to a trust, the trustee has the final authority to sell the property. Another common scenario is that multiple siblings have inherited the property together, but often one sibling will be the one to execute any potential sale.
How Do Taxes Work When Selling an Inherited House?
If you are selling an inherited house, you’re going to have to pay taxes on the sale. However, you can avoid paying these taxes if you take up residency in the home for a minimum of two years. This is called the “home sale tax exclusion.” Most people don’t do this, and they look to sell their inherited property as quickly as possible.
There is a bit of good news regarding the taxes you’ll have to pay on selling an inherited home. Typically, home sellers must pay taxes on the original purchase price plus the added value to the home of any improvements made. This can be a considerable chunk of change. With the sale of inherited homes, however, you will only have to pay tax on the value of the home in question at the time of the owner’s death. This difference can save you quite a bit of money!
What If There’s Money Owed or a Mortgage on the House?
If the house has not been paid off yet, selling the home that you’ve inherited can become more complicated. While the house is in your possession, you will need to continue to make mortgage payments, as the debt is now considered your responsibility. If you sell the property, you will need to use the money from that sale to pay off the mortgage. Sometimes, the loan cost is higher than the selling price of the house, leaving you to pay the difference. Life insurance can sometimes help cover the additional cost, but if that is not enough, you may need a representative to work with your creditors to negotiate a lower price through a Short Sale.
What Should I Do with the Previous Owner’s Belongings?
When you inherit a house after someone’s death, you also may inherit all of the belongings that they had in their home, including their furniture, clothing, collectibles, and everything in between. If you’re trying to empty the home so that you can sell it, you can sell their old belongings at a garage sale, estate sale, or even an online marketplace like eBay or Craigslist.
Keeping Up With the Property
If you inherit a home, you need to keep up with it to ensure that you can sell it smoothly. Prospective buyers will want to see a clean and well-kept house; this will also help you get the highest value for your property. There are also other aspects of owning the home that you will need to keep up with until you can sell it:
Lawn and garden: The property should be kept trimmed to a reasonable level and cleared of fallen foliage in the autumn. The garden should be tended to as well by trimming any bushes and removing weeds.
Inside the home: Once you’ve removed excess items or even staged the home with the furniture for selling, the entire residence should be cleaned and free of dust, mold, and mildew.
Utilities: If the home will be used, you will need to continue to pay utilities. If no one will be there, you’ll have to contact the utility companies to have them shut off so that you’re not paying for a service you don’t need.
Insurance: Most regular home insurance policies are only valid for 30 days while the property is vacant before it becomes invalid. It is recommended to purchase a vacant home insurance policy to protect the home you just inherited in the event of any unforeseen circumstances.
If you make sure to keep up with the home and take care of it, you will have no issues selling your inherited home when the time comes. We know that this is a lot to keep in mind, especially during what is probably a hard time dealing with the loss of a loved one. It is crucial, though, to ensure that the property is taken care of so you don’t lose money on your inherited home.
Can I Sell My Home As-Is?
Is the mere thought of attempting to clean and repair the home you’ve inherited to get it in a condition that is sellable enough to make your head spin? Rather than coordinating with contractors to renovate rooms and spending thousands of dollars to replace carpeting and paint areas that were long overdue for a makeover, you should know that there are options to sell your home as-is in Philadelphia.
Need Help Selling Your Inherited House?
There are so many things to consider when selling your inherited house, and truthfully, many people don’t have the time to deal with all of the steps required for a traditional home sale. Find out how selling an inherited house with us is different than working with a realtor and can save you time and hassle.