Inheriting a house is often a bittersweet experience. On one hand, it's a generous gift from a loved one; on the other, it comes with the loss of said loved one, along with a host of responsibilities and potential headaches. Whether you're dealing with this alone or with siblings, I'm here to walk you through the process of selling an inherited house.
Understanding Your Inheritance
First things first, you need to know exactly what you've inherited. Are you the sole heir, or are there others involved? Dig out that will or trust document and give it a thorough read.
If it's all foreign to you, don't hesitate to chat with an estate attorney. They’ll break down the legalese and make sure you understand your rights and responsibilities. This is especially valuable if the property is in probate due to the lack of a will entirely.
Take a good look at the property - if you don’t know the condition of the house, now’s the time to find out. Is the roof leaking? How's the foundation? These details matter when it comes to selling.
Financial Considerations
Next, you’ll need to figure out the financials surrounding the property. Here's where things can get a bit tricky since most of this will be in the name of whoever gave you the house.
Is there still a mortgage on the house? Any liens? You'll need to factor these into your plans. Don't forget about property taxes and insurance - unfortunately, these bills don't stop because the owner passed away. Whatever you do, certainly don’t let it get foreclosed on!
Luckily, when it comes to capital gains tax, real estate has a stepped-up basis when you inherit it. In simple terms, on most assets like stocks, owners pay tax on the difference between what they buy and sell it.
However, when you inherit a home, the price you “bought” it at becomes the value of the property at the time of inheritance, not what the previous owner paid for it. Pretty neat!
Deciding Whether to Keep or Sell
Now that you know the background of the property, including its condition and financials, it’s time to hold onto it or sell it. There’s no one-size-fits-all for this one.
Maybe the house has been in your family for generations and you can't bear to part with it. Or, maybe you're strapped for cash and the sale could help you out. There’s also the possibility of renting it out for some time making you a landlord. Regardless, if you decide to keep it, make sure you’re prepared for the responsibilities of being a homeowner or landlord?
Preparing the House for Sale
If you've decided to sell, it's time to roll up your sleeves. Start by clearing out personal belongings. This can be an emotional process, so take your time and be kind to yourself.
Next, tackle any necessary repairs. A fresh coat of paint can work wonders, but don't go overboard with major renovations. Older houses with decades-old finishes can be expensive to renovate.
As far as methods of selling go, you have options. You could work with a real estate agent who knows the local market inside and out. Or, if you're feeling brave, you could try selling the property yourself. There's also the option of selling to a cash buyer or investor, which can be quicker but might net you less money. Regardless of which option you choose, I have multiple articles and guides on how to approach each method. If you're in the Austin or Central Texas area, we offer fast, cash offers for any property as-is! If this interests you, I encourage you to reach out.
Marketing the Inherited Property
Once you've cleared the hurdles and the house is ready to sell, it's time to get the word out. Set a competitive price based on market research and comparative analysis. I highly recommend you hire a professional stager and photographer - these two together have perhaps the highest ROI of any spending when it comes to selling a home.
Create a listing that really sells the home's best features. Don't just say "three bedrooms and two baths." Paint a picture! "Cozy family room perfect for movie nights," or "Sunny kitchen ideal for Sunday brunches." Use online platforms and social media to spread the word far and wide.
Offers, Negotiations, and Closing
When offers start rolling in, it's time to put on your negotiator hat. Compare offers carefully - the highest price isn't always the best deal if it comes with a lot of contingencies. Don't be afraid to counter-offer.
Once you get an offer you’re happy with, it’s a good idea to have a real estate attorney review any contracts before you sign. The peace of mind at the end of it all is worth it!
After everything is signed, you’re in the home stretch. Address any title issues that crop up and make sure you complete all required disclosures - you don't want to get sued down the line for hiding known problems. Work with your title companies to ensure a smooth closing process through escrow.
Once the sale closes, it's time to distribute the proceeds. First, pay off any remaining debts or liens on the property. Then, if you're not the sole heir, divide the proceeds as specified in the will or trust.
Emotional Aspects of Selling an Inherited House
Last but certainly not least, let’s talk about the emotional side of this process. Selling an inherited house isn't just a financial transaction - it's often saying goodbye to a place filled with memories you may have grown up in.
It's okay to feel sad, conflicted, or overwhelmed. If you're dealing with difficult family dynamics, it can add another layer of stress. Don't be afraid to seek support, whether that's from friends, family, or a professional counselor.
What Happens if One Person Wants to Sell an Inherited House and the Other Doesn't?
If you've inherited the house with siblings or other relatives, you might not all see eye to eye on what to do with it. First, know your rights as co-heirs. Then, try to have an open, honest conversation about everyone's wishes and needs.
The best path forward is if one of you can buy out the other’s share. If you can't reach an agreement, you might have to consider a partition lawsuit as a last resort. But remember, legal battles can be costly and damage relationships, so try to avoid this if possible.
What if a Family Member is Living Rent-Free in an Inherited House?
This is a tough situation that requires tact and patience. First, understand the legal status of the person living there. Even if they're not paying rent or don't have a lease, they still likely have certain tenant rights.
Have a clear discussion about your intentions to sell. Maybe you can work out a temporary rental agreement, or perhaps you can offer some relocation assistance. The key is to be firm but compassionate.
If they aren't a co-inheritor, you can follow standard state protocols to terminate the lease or evict (see the next section). If they are, then take a look at the previous section - this is unfortunately a messy scenario that usually gets messier!
How to Evict Someone from an Inherited House
If push comes to shove and you need to evict someone, brush up on your local landlord-tenant laws - they vary by state and even by city. I know I’ve advocated for attorneys a lot in this article and that’s because they’re usually worth it, including with eviction; if you screw up a DIY legal process, the consequences can be magnitudes more expensive.
Serve a proper eviction notice, following all legal requirements to the letter. If the person still won't leave, you’ll have to proceed with an eviction. Don’t be surprised if this gets ugly, but keep your cool as judges get very upset when landlords (even landlords through inheritance) repay unkindness with more unkindness.
Concluding Thoughts
In conclusion, selling a house is already a complex process without the added layer of inheritance. Take it one step at a time, communicate clearly with any co-heirs, and don't hesitate to seek professional help when you need it.
If you decide to sell, it's not just about getting the best price - it's about honoring your loved one's memory and doing what's best for you and your family in the long run. As I said earlier, we offer as-is cash offers in the Austin and Central Texas area - reach out today to see how we can help!
