Inheriting a house is an emotional experience. You’ve just lost someone you love and now you have this house to worry about. You may want to sell it at once to get it over and done with as quickly as possible. But how do you sell an inherited house fast? Keep reading to find out.
What do you do with an inherited house?
You’re probably already reeling from the loss of your loved one. Dealing with paperwork for the house you inherited may be the last thing you want to deal with.
Further, the house may not be in a location where you want to live or you’ve inherited it with other people and you want to liquidate it quickly so everyone gets their share.
How do you sell an inherited house fast? Check out these tips here.
1. Consider the Mortgage
Inheriting a home might seem like a huge blessing — until you look closer. How much of the house did you actually inherit and how much belongs to the bank? The state of the mortgage greatly affects how fast you want, or need, to sell the home.
If you’re lucky, the home is paid off and you now own full equity in the property. Congratulations! Now all you need is a fast sale to have money in your hands.
If you’re unlucky, the house is underwater. This means that the value of the house went down and more is due on the loan than the house is worth. In this case, you may be able to negotiate with the lender and do a short sale. This means the lender agrees to sell the home and accept less than the loan amount.
Many inheritances fall somewhere between these two extremes. They may also have special clauses to consider.
For example, a due-on-sale clause. The mortgage may become due as soon as ownership is transferred. You either have to pay off the mortgage or take out your own loan.
Another instance may be a reverse mortgage in which the previous owner was receiving a steady flow of cash against the equity in their home. You will become responsible for paying off that balance.
2. Home Inspection and Repairs
As when you buy a home, it's a good idea to have an inherited home inspected. This will give you a good idea of what may need to be repaired in the home. That way, there won’t be any huge surprises that could make the deal fall through when the buyer does their own inspection.
From the report, you can determine what, if any, repairs you need to make before putting it on the market.
3. The Tax Man Cometh
How do capital gains taxes affect an inherited house? Thankfully the calculations are made on a ‘stepped-up’ basis. This means that you are taxed on any gains the home makes in value from the time you received it till the time you sell it.
For example, if your grandmother bought her home 50 years ago for $30,000 and it was worth $430,000 when she died, you won’t pay capital gains on that $400,000. Instead, you’ll pay on however much the home appreciates from the date of her death to when you sell.
Keep in mind that you can use repairs and remodels to lower your tax bill so keep your receipts if you do any updates.
4. What About a Cash Buyer?
Wouldn’t it be easier to sell to a cash buyer? You get your money fast, you won’t have to make any repairs, and you don’t have to stress about the buying process.
But there’s a big disadvantage. The convenience of cash buyers comes at a price. You will never get full price for a home from a cash buyer. Most of the time it ranges between 50-80% of the home’s value.
If you’re already having to pay off the mortgage there might not be much left for you when it’s all said and done.
5. Get a Good Agent to Sell an Inherited House Fast
The best way to sell your inherited house fast is to hire an experienced real estate agent. They can advise you on the best course of action based on the factors we just mentioned about mortgages, repairs, taxes, etc.
They can also help you to sell that house quickly. A good agent can help you avoid drawn-out real estate deals and get the most money in your hands in a timely manner.
But what about their commission? Work with a Clever Partner Agent and you’ll save a bundle on that too. Agents in our network are experienced professionals who have agreed to offer their top-notch services for a low flat fee of $3,000 or 1% if the home sells over $350,000.
Ready to get started? Find an agent to help you sell your inherited house fast today.