Selling an Inherited House
“I inherited a house. Now what?”
Here at 4 Brothers Buy Houses, we hear this question a lot.
Inheriting a house can be a financial boon, a complicated and emotionally taxing burden, or anything in between. For many people the individual who they inherited the house from is someone they were close to, and dealing with the house can be stressful and emotionally trying. For others, the individual may be a distant relative the inheritor had no real relationship with and it’s simply a welcome windfall.
Whatever the case may be, 4 Brothers Buy Houses can assist those individuals who have inherited a house and want to sell it as quickly and easily as possible without having to make any repairs. However, not everyone wants or needs to sell a house to investors such as ourselves, so along with presenting the option of selling your inherited house to 4 Brothers Buy Houses, we will also talk about the other options available to you when attempting to sell or otherwise manage an inherited house.
If you’re reading this article, you have most likely decided that the option of personally living in the inherited house yourself is not for you. However, for some people, including those who may have inherited the house they grew up in and may have positive emotions associated with the property, that may be desirable.
For those uninterested in living in their inherited property, the other option that still allows the heir/heirs to retain ownership of the property is to put a tenant in the house and manage it as a rental property. In the DC area, with high house prices relative to rent, this is usually most feasible if the house you have inherited is free and clear. Renting can provide consistent, moderately passive cash flow, while allowing you to retain ownership of an asset that should increase somewhat in value over the long term. Although the income and possibility for appreciation is appealing, many people are not interested in dealing with the hassles that come with managing rental property. When the plumbing leaks at 2am or the toilet is backed up, you’ll be the one the tenants call to address the issue. If a tenant doesn’t pay rent and must be evicted, that will of course be your responsibility as well. The key to being an effective landlord is educating yourself- especially on how to properly screen tenants- which is about 80% of success or failure in land lording.
There are many great guides when it comes to renting- check out this great beginners guide on rentals and land lording.
If you’ve decided not to live in the house, and not to hold onto it as a rental property, your other option will be to sell the property. While selling a property in a normal scenario is usually fairly straight forward- as it will typically be owned by one or two people who are typically on the same page in terms of desired closing date, sale price, and so forth- selling a property in an inherited situation can be quite complex. In many cases the house will be inherited not by just one person but by a number of people, such as siblings, cousins, aunts/uncles, etc. With an often diverse group of interested parties with vastly different needs, interests, and financial motivations, it’s common for disagreements to come up on how to handle the sale of the inherited house.
If one party has the financial means, it is possible for that party to buy out the interest of the other heirs. To do this, people typically have 2 independent appraiser assess the value of the property, and buy out the ownership stakes based on that determined value. If there isn’t one heir with the interest or ability to buy the others out, the other option is to sell the house, providing cash for the property, and splitting the proceeds with the heirs based on the will or probate court ruling.
When selling the inherited house it is important to first understand whether or not the deceased party had a will that clearly specified what was to happen to the property upon their death. If the deceased had not willed the home to a specific person/people, or died without a will at all (intestate), the house will typically have to go through the probate process. This is actually quite common as approximately 55 percent of American adults do not have a will or other estate plan in place, according to LexisNexis; a figure that has remained consistent over the last 2 decades.
Probate is the legal process by which the assets of a deceased person’s estate are passed on to their legal heirs. This process will involve legal and financial professionals and typically cost 2-5% of the total value of the assets being dealt with. Probate can take anywhere from a few weeks to over two years, according to the American Bar Association. Probate takes time because most states have minimum periods of time that creditors are allowed to respond, during which the probate estate cannot be distributed. For more information on the Probate process, and the role the executor plays, find more information here: http://homeguides.sfgate.com/sell-real-estate-during-probate-3122.html
The probate process can be time consuming and confusing, so seeking the help of a competent professional, such as a probate attorney, is advisable. It is also often helpful to deal with a buyer of the property who understands the probate process and is able to wait the multiple months it may take to sell the property. Fortunately, we’ve bought many inherted properties and are well versed in buying homes in this situation.
The other options when selling an inherited property are selling For Sale By Owner (FSBO) or through a Realtor, the advantages and disadvantages of which we discuss in other areas of the website.
If you want to sell your inherited house fast for cash, and without having to make any repairs, your best bet is to sell to an investor like 4 Brothers Buy Houses. Depending on how much work the property needs, you may even make as much as you would by selling with a Realtor, but not have to go through the work and hassle that selling with a Realtor entails. Hassles like fixing the property up, waiting for the right buyer to come along, paying commissions and closing costs, having friends and neighbors walking through the house while it’s on the market, etc. Cick the following link for a great breakdown on the unexpected costs of selling a home.
Even if you aren’t considering selling to an investor, we highly recommend you call one of these companies just to see what they can offer. It’s free and extremely fast.
Curious about what your house is worth? Get an offer in 10 minutes by calling 703-596-5311 today.