Inherited houses come to people for various reasons, the most common one being as part of a gift after death. While it may seem excellent that your aunt, grandparent or friend thought of you when leaving their property, there are some things to consider when you think about selling. There are tax consequences that you will face and you will also need to get the home ready for the real estate market.
If the home is particularly old, you may need to bring certain things like electrical and plumbing up to code before you can sell, and older homes may have structural issues that require handling. You will also need to dispose of the former owners’ possessions and all of this can be time consuming and heart wrenching if you inherited from a loved one who has passed. The following solutions may be what you need to sell your house fast with minimum stress.
Have an Inspector Check Out the Home
A licensed real estate inspector can be a true asset when you inherit a house. Hiring an inspector to walk through the home can give you information about the structure, roof, electrical and plumbing systems and any items that may need repair before you will be able to sell the house. The cost of contracting an inspector can save you a lot of time and money as you consider the best way to sell your inherited house.
Consider an Estate Sale or Auction
As for possessions like furniture, dishes, clothing, and other household items you may have inherited with the house, you may consider hiring an estate sale company or auctioneer to help out. Going through all those memories is something you probably want to do with family and friends, but once you have what you want to keep, then it’s time to clear out the rest so you can sell your house fast. An experienced estate sale representative or auction house can price your items to sell but also recognize the value of antiques and items you may not be familiar with. You can always have a garage sale yourself, but often times having a professional take care of things smooths this transitional phase as you prep for selling the inherited house.
Tax Consequences Exist When You Sell
When you inherit real estate, there are tax consequences. When you receive a house as a gift, even as part of an inheritance, you are recognized as owning the property for as long as the donor owned it when you sell. Prior to the point of selling you would not have to pay taxes on the gift. However, at the point of the sale, ownership is deemed to have existed back to the point the house was purchased. This means that when you sell, if the property has appreciated over the years you may end up paying capital gains taxes. However, the beneficiary can get favorable treatment with long-term capital gains so the percentage of tax can cap out which can be helpful.
It may be wise to consult with a real estate attorney who is familiar with capital gains taxation so that they can help you navigate any tax consequences you may face. Your individual tax bracket will factor in as well as other circumstances. Obviously, if you are selling your inherited house you want to keep as much money in profit as you can and not pay it out in taxation. Many people who inherit houses choose to go with a cash sale so that they can offload the inherited property quickly and not worry about repairs, high taxation issues from market value sales, or getting an older building up to code.