How to Sell an Inherited House (3 Available Options)

Author: Cory Pinter
Date: June 9
Selling Advice
Selling an inherited house

Inheriting a home from a deceased loved one can be an overwhelming process. If you are looking to sell the home, the process can seem even more daunting.

This article will serve as your simple yet comprehensive guide to selling an inherited house.

Where Do I Start from If I Inherited a House and Want to Sell It?

Once you inherit a house and decide to sell it, the next step is to determine the way the property will be sold. Commonly, it will go through a complex procedure called probate.

In this case, the homeowner’s title will change from the deceased person to yours.

Once this process is complete, you can sell it. Another option is to sell the house while in probate.

In some cases, you won’t need to go through probate at all. You can become the legal owner more simply and then sell the house as normal.

Sometimes there may be multiple heirs, which can create further difficulties. Imagine a sibling living in the deceased parents’ house and refusing to sell it or demanding an inheritance buyout.

Generally, the executor can sell a property without all beneficiaries approving. But there are cases where it’s difficult.

We will discuss all of these different possibilities and solutions in the guide.

What Is a Probate?

Probate is a court-held process that you should go through when you inherited a house.

It’s designed to validate the will of a deceased person (if a will is available) and distribute the estate according to the will or state laws.

If a will is left by the deceased, the executor in the will handles the entire probate process.

If no will is present, a court-appointed professional will manage the probate process.

Do You Need a Probate to Sell Your Inherited Home?

A house that is left in a will is known as a testate. A house without a will is known as an intestate.

In both scenarios, a probate is usually required to legally transfer ownership of a property.

When a probate is required, there are two options for selling the deceased person’s estate property:

  1. Sell the house during probate: You will need court approval to sell a house before the probate process is finalized. We discuss this in more detail in our guide on how a house can be sold while in probate.
  2. Sell it after probate: You can sell heir property after probate proceedings to have more freedom in the sales process as the legal owner.

There are also cases where you can sell an inherited property before probate.

When a Probate Is Not Necessary

In some cases, you can sell a house without probate. When probate is not required, you should become the legal owner of the property and then sell it.

Property Is in a Trust

One scenario where the probate process is bypassed entirely is when a property is held in a trust.

The elected trustee will be able to manage and distribute the property according to the information outlined by the trust.

To transfer property ownership, the trustee will need to provide documentation.

This will ensure that the property is either transferred directly to the new owners or sold as outlined in the trust.

Jointly Owned Property

In some scenarios, selling a house when one owner is deceased will not require probate. Here are some of the cases where this would apply.

  1. The property is held in joint tenancy with the right of survivorship.
  2. As tenants by the entirety, the surviving owner(s) automatically inherit the share that the deceased owned.

For example, most of the time, a wife can sell a property after her husband’s death without a probate.

To transfer an ownership title, the surviving owner will need to complete forms with the local property office while also providing a copy of the death certificate.

Small Estate Affidavit

If an estate’s value is below a certain amount, some states may allow you to use a small estate affidavit to get the property transferred to your name without a probate.

This is applicable in the below scenarios:

  1. There is no will left behind by the deceased and you are a close relative.
  2. You are the claimed executor of the will.

For example, let’s say you inherited your mother’s house. If the property qualifies as a small estate, you could file a small estate affidavit with the probate court.

If you get approved, this process allows you to transfer ownership while bypassing the probate process.

You will need to check with your local state requirements, but likely you will need to gather the death certificate and other important property documents.

If none of these apply to you, you can’t avoid the probate procedure, which can be long. It helps to know how long it takes to sell a house through probate.

3 Available Methods to Sell Your Inherited House (After You Became Property’s Legal Owner)

Now that you have become the legal owner, it’s time to sell the house! In this section, we will outline three options for selling your deceased parents’ house, once you become a legal owner.

This will take place after the probate process or whatever other procedures you went through to transfer ownership.

#1 Sell to a Cash Home Buyer

If you have a property that is not in the best condition (such as an inherited hoarder house), or you just want to sell it quickly, selling your home to a real estate investor is a good option.

They will often buy from homeowners selling an inherited house as is, which means you won’t need to upgrade or repair anything before selling the house of a deceased person.

This is ideal for many individuals who inherit properties they want to get off their hands immediately.

Many real estate investors will pay in cash which can make for a quick, efficient exchange.

Pros of Selling to a Cash Home Buyers

You Sell As Is

One of the most popular reasons people sell their inherited property to investors is because these individuals buy real estate “as is.”

If you inherited a house that needs work, you don’t have to worry about repairs, remodeling, paying outstanding debts, or tying up any loose ends with the property.

When you are inheriting a property, this can be appealing. There isn’t much responsibility on your end, saving you sufficient time and money.

You Sell Fast

Real estate investors are known for closing on deals quickly. They don’t want to waste any time, which means the entire process can be completed in a matter of weeks.

When you inherit a property, oftentimes unexpectedly, it’s common to want to sell it right away. If so, going the investor route is a great option.

You’re Paid in Cash

When you are looking for financial certainty on a short timeline, a real estate investor is likely to offer a cash payment.

Cash payments are great, especially in the real estate world. This saves time and ensures you don’t have to worry about mortgage approvals or a sale falling through.

If you inherited a house with a mortgage, the payments are delinquent, and the bank is about to foreclose on the house in probate, a cash offer is a good way to convince the lender to allow you to sell the house to avoid foreclosure.

Minimum Paperwork

Since investors handle the majority of the legal paperwork and processing, the experience is fairly seamless for the seller.

You won’t have to worry about all of the paperwork that is typically involved with traditional real estate transactions.

Cons of Selling to a Cash Home Buyer

Lower Price

Due to all the amazing benefits that come with selling to a real estate investor, you may receive a lower price for your property as a result.

At the end of the day, investors want to make a profit. Their offers will likely be below the market value of the property.

For some, this is still a better option due to the convenience and speed of the sale. Overall, you’ll need to decide what is best for you.

Many Companies Are Scammers

It’s no secret that the real estate industry is full of scammers. Some companies may offer you something that sounds too good to be true, in which case it’s important to be wary.

Always vet an investor or real estate company before proceeding with a sale or sharing any confidential information.

Look for popular businesses that have been around for years and have a positive track record.

How to Find the Right Cash Home Buyer

When you’re ready to sell your inherited property, you don’t want to give it to just anyone.

It’s important to compare different cash offers and ensure that the company has a good reputation.

Look at business reviews and ask for references from previous clients.

The more information you find, the more confident you can be that the home investor is trustworthy and reliable.

You want to ensure that you steer clear of scammers at all costs. Make sure to find an investor that has a clear history, and is transparent about their process.

I invite you to visit our national directory of top rated companies that buy inherited houses for cash where we listed reputable and vetted real estate investors.

This resource will save you a lot of time on sifting through hundreds of investors in your local area without worrying of being scammed.

#2 Sell with a Realtor

Most homeowners will choose to sell their home with a real estate agent. Realtors have the network and expertise to help you get the best price for the property.

What happens when you sell a house you inherited with the help of a real estate agent is that they will handle all of the marketing and logistics for you, ensuring a smooth process every step of the way.

This can take longer, however, especially if you are trying to quickly sell an inherited property.

Pros of Selling with a Realtor

Professional Marketing and Management

Real estate agents can supply photo and video content that can make your property more appealing to buyers.

They handle a lot of the logistics, paperwork, marketing and overall management, which can take the pressure off your shoulders.

Market Expertise and a Wide Network

Most real estate agents know how to sell in the local area where your property is.

They have a wide network which allows them to attract the right buyer to your property.

They can capitalize on the unique selling points of the area to secure a great deal.

Cons of Selling with a Realtor

Time

It can take a substantially longer time to sell a property with a real estate agent over a real estate investor.

The home has to be cleaned, fixed up, listed, shown, and the agent has to have multiple open houses. Depending on the real estate climate, it can take months to sell the property.

Fees

Realtors will charge a commission for selling your property, usually around 5-6% of the final sale.

Once this fee is removed, it can significantly reduce the amount you are pocketing from the transaction. It’s important to keep these commission fees in mind.

Repairs

Before you can sell a home with a realtor, you’ll need to address any necessary repairs to the house.

If there is any water damage, mold or urgent repairs, this can add up quickly which can be costly.

No Guarantee of Sale

Selling an inherited property can look different for everyone depending on the quality of the property, the location and the age.

With so many roadblocks that can prevent you from putting your house on the market, it can take months and sometimes years to sell a property.

There is no guarantee of a sale and a lot of responsibility is placed on the seller.

#3 Sell by Owner (FSBO)

For sale by owner is one of the most difficult options you can go with when trying to sell an inherited property.

This would mean that you decide not to use an agent and take on all of the selling responsibility yourself.

This includes setting the price, marketing the property, hosting showings, reviewing legal documents, and handling all administrative work.

Pros of Selling by Owner

Cost Savings

When you aren’t having to give away 5-6% of the final sale price, you can pocket all of the extra money for yourself.

This can be incredibly beneficial if you are selling a house in a region that is highly sought after and you know it’ll go quickly.

However, it is important to note that in most of the cases when selling by owner, your buyer will be represented by a realtor.

This means that while you won’t to pay a listing agent their 3% commission, you’ll still be on the hook for 2 to 3% commission to the buyer’s agent.

Control Over the Process

Selling your home independently ensures that you have control over everything.

You can set showing times, negotiate with buyers, and set a price that works with your goals.

Depending on the property and the market, this could create a more positive outcome.

Cons of Selling by Owner

Time-Consuming

The FSBO can require a lot more work than meets the eye. Since you are doing everything yourself, you have to ensure the home is polished and clean for all photos and events.

Managing inquiries and messages, coming from all the FSBO listing websites on which you posted your home for sale, can also take up a lot of time.

Assuming you have other responsibilities on your plate, it can be challenging to keep up with everything that comes with FSBO.

Lack of Market Knowledge

Since you likely don’t have a real estate background, it can be difficult to price your home and market it effectively.

Agents have access to data, networks and resources that can help with price markups and attracting your target buyers.

Tax Implications When Selling Inherited Real Estate

Is Money from Selling an Inherited House Taxable?

If you inherited a house and sold it, the proceeds from your sale may be subject to capital gains tax.

If a deceased parent’s passing was the reason for the inherited property, then the gain is calculated based on the difference between the sale price and fair market value (at the time of the passing).

This is known as the stepped-up basis. It’s important to stay on top of capital gains on the inherited house to ensure you calculate what you owe, if applicable.

Can you forgo paying this tax obligation altogether? We answer this question in our article on how to avoid capital gains tax on an inherited house.

Home Sale Tax Exclusion

If the inherited house was your primary residence for at least two of the five years before the sale, you may qualify for the home sale tax exclusion.

This allows single filers to exclude up to $250,000 of the gain. Married couples can exclude up to $500,000, potentially reducing overall taxable income.

How to Report the Sale of the Inherited Home

Once you have sold inherited real estate, you’ll need to report all proceeds to the IRS. First, you’ll file an IRS Form 8949 which will detail the sale and capital gains.

All proceeds should be reported on your income tax return. Proper reporting is essential to avoid tax consequences and guarantee compliance with tax laws and an accurate calculation of taxes owed.

How to Sell an Inherited Home Fast

Once you figure out that you are inheriting a house, the property will go through probate or be transferred to your ownership through another procedure.

When you are ready, the quickest way to sell is “as is” to a real estate investor.

Look for a company that buys inherited houses, as it can simplify the process by purchasing the property in its current condition.

This will save you a ton of time and money by eliminating the need for repairs or renovations.

Once you find an cash investor who wants to move forward with the house, they will likely offer a cash payment.

This will allow you to move on efficiently and deal with other obligations that come with the passing of a loved one.

Cory Pinter

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About the Author

Cory Pinter is a seasoned real estate investor with a proven track record of closing hundreds of transactions. Since 2018, he has specialized in inherited properties, providing invaluable guidance and support to individuals managing inherited real estate. Cory's comprehensive knowledge of the real estate market, combined with his empathetic...

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