Property Dilemma: What to Do When You Inherit a House You Don’t Want

Inheriting a house from a relative doesn’t always feel like winning the jackpot. In some cases, it can feel like quite the opposite.

If it’s a decrepit property, or you live in a state with a high inheritance tax, you may not have the energy or the means to deal with it.

Whatever the case may be, here are a few options on what to do when you inherit a house you don’t want.

8 Tips For When You Inherit a House That’s Unwanted

Inheriting a property may be a blessing for some, but for others, it can come with a host of issues. First of all, you may no experience in owning, managing, renovating or selling a home. So where do you even begin?

If the property is supposed to be divided between you and your siblings, how do you tackle this and when is a property dispute lawyer necessary? Here are a few tips to help you tackle the issue of an unwanted inherited home:

1. Respect the Waiting Period

After a loved one passes, it’s important to respect the time period just after this and not rush into any decisions regarding an inherited home.

Some states also apply a mandatory 90-day wait period before selling an inherited property. You’ll need to respect this time and work with an attorney and a realtor to assess the best options for you.

2. Beware of Opportunistic Realtors

It’s also wise to observe this waiting period in order to avoid costly mistakes — and this includes falling into the clutches of hungry real estate investors.

The truth is that realtors love to assume that as a new property owner you know nothing about the value of an inherited home. Even if this is true, they shouldn’t take advantage of you. But if you rush into selling, this could very well be the case.

Take your time, do your research, and work with an experienced attorney and honest realtor who have your best interests at heart.

3. Understand the True Value of the Property

Before you rush into a decision about selling an inherited property, do some thorough research on the exact value of the home. It could be worth more than you think.

Don’t rely on the first appraisal of the property included in the estate. This appraisal may not reflect the true or up-to-date market value. Get in touch with a real estate broker who can give a true reflection of its current and relevant value. Ultimately, this could help you come to a decision about selling it or not.

4. Always Choose to Sell With a Realtor

If you decide that you do not want to keep an inherited home, your best choice is to sell it with the help of an experienced realtor. This is an opportunity to sell an unwanted property for cash, but you need the help of a professional to secure a good deal.

It can also make the process more streamlined for you if you don’t live in the same city as the inherited home. But with all of this professional expertise, don’t forget about the commission and other associated costs. Typically, commission is set at 6% of the property’s sale price.

5. Sell the Property ”As-Is” at Auction

This is probably the best decision if you just want to sell the property quickly and get rid of it. The reality is that you might not get the best price for it when compared to listing it with a realtor.

But if you want to save yourself the hassle of renovation, listing, commission, and other costs, selling ”as-is” at an auction is your best move.

6. Sell the Property ”As-Is” to an Investor

Another alternative to the above-mentioned point is to sell to a real estate investor. This is another quick and effective way of getting rid of an unwanted inherited home, without too much effort.

An investor will buy the home ”as-is” without you having to lift a finger or spend an extra dime on fixing it up or even cleaning it. Basically, you are permitted to go through the home, keep what you want, and then sell the rest.

But this being said, make sure you work with a real estate investor that has experience in buying inherited homes. They should be able to guide you through the probate process so that it’s as streamlined and stress-free as possible.

7. Rent Out the Inherited Property

If the home is still in good condition, you could turn it into a rental property that supplies you with another form of income, without having to do much on your end. It’s a win-win, really.

However, there is a particular process involved in becoming a landlord and managing the property yourself. You will have to be prepared to learn all about this process and commit to managing the property regularly. This can be tricky if you do not live in the same city as the inherited home!

Alternatively, you could hire a property management company to oversee the rental property for you. However, expect to pay approximately 10% of your rental income for this service.

8. Fix It and Flip It

You may inherit a property that’s not in the best condition, but still has plenty of potential. This is an opportunity to fix it and flip it (sell it) for a profit. If you’re the DIY type and have time on your hands, this could be one of the best ways to make real money from an inherited home.

But bear in mind that there could be capital gains tax to pay in this scenario. If you’ve lived in the home for at least two years before selling it, up to $250,000 is tax-free profit if you’re single. You can get $500,000 profit if you’re married and file your taxes jointly.

If neither of these applies to your situation, you could pay up to 20% capital gains tax on the profit you make.

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If you ever find yourself in a situation where you inherit a house that you just cannot manage, we hope you refer back to this blog for some helpful tips. The great news is that you have options — and many of them can be used to your advantage!

For more local news updates, advice columns or information on specialists in your hometown, check out the rest of this website for more.

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