HOW TO PRICE YOUR INHERITED HOME FOR SALE
Inheriting a home can sometimes place you in unusual circumstances. Once you’ve gone through the initial grieving process, you’re frequently left with any number of questions. Do you inherit any mortgage debt which might come with the property? Are there any outstanding liens or warrants? What about property taxes? And perhaps most importantly—should you keep your inherited home or sell it?
There’s many reasons why you might choose to put your inherited home up for sale. You may already have your hands full with your current home. It may be more trouble than it’s worth. You may have too many emotions attached to it. Or it may be so dilapidated that it’s beyond repair. But before you wind up selling for less than fair share, here are a few things you may want to consider first.
How Much Is My Inherited Home Worth?
Generally speaking, the value of an inherited home is based on the fair market value of any home; meaning it’s entirely subject to an appraisal. In many cases, this is done during the legal disbursement of property at the request of the executor of a will or living trust. If there was no executor but you’re the sole beneficiary named, you’d need to find a licensed appraiser in your state to determine the value. The cost of an appraiser will vary from state to state, but the national average is typically around $336.
But that’s entirely contingent on an initial appraisal. Any repairs or improvements you choose to make would obviously increase the value, assuming the mean value of properties in your neighborhood remain stable. And that’s not always going to be the case. It may go up and it may go down depending on any given number of factors.
What If There’s Mortgage Debt Attached to an Inherited Home?
Legally, creditors are given top priority to any property with debt attached to it which hasn’t been entered into probate, even if you’re named the sole beneficiary. During the disbursement of a will or trust, assets are distributed to heirs and beneficiaries only after collection by creditors.
You can be forced into the sale of a home to meet creditor demands. However, creditors have up to 90 days after disbursement to submit a claim on any estate. Any claim made after that time can be subsequently barred in most cases.
How Much Do Renovations Cost on an Inherited Property?
Renovations on an inherited property are contingent on any number of factors, including:
- The age of the home.
- The condition of the home upon the death of the individual.
- The size of the home.
- The need for renovation.
- Previous renovations made.
- The potential share of increasing fair market value.
There’s no such thing as a median cost on an inherited home—or any home, for that matter—without taking these factors into consideration.
How Long Does It Take to Sell an Inherited Home?
The length of time it takes to sell an inherited home is just the same as it would be to sell your own. Typically, many people who find themselves with unwanted property choose to either convert it into a rental property or sell immediately. And there’s benefits to both.
Assuming that your inherited home is not in drastic need of repair, converting it into rental property can sometimes bring a long term gain, But it’s not a gain you’re going to see immediately. For one, you’re typically going to have to pay a capital gains net tax on secondary property; which can be as high as 15 percent. For another, you may not want to take on the responsibilities of acting as a landlord. Credit checks, repair work, maintenance and unreliable tenants are just some of the problems you may wind up facing as a result.
Selling an inherited property isn’t always assured. Again, it’s dependent on the actual condition of a home. This is one reason why many owners of unwanted property turn to property investors such as Enlight Homebuyers. We'll pay near market value, no matter what condition a home is in. There’s no need to go through a lengthy listing and waiting period or relying on unresponsive realtors. We'll purchase your home as is—sometimes within a matter of less than a full business week.
There’s always going to be an upside to selling any home, inherited or your own. But there’s downsides too. It’s how you weigh them against one another and choose wisely that ultimately matters.
If selling your inherited home to an investor is something you're interested in, give us a call at 1-800-655-8322! We'll answer any questions you may have and help you figure out the best way to move forward.