Selling Your Inherited Family Home

Inheriting your parents’ house may not come as a surprise, but that doesn’t mean keeping it is the right decision for you. However, there are a few things to take care of before you list it for sale, especially if you own the property with your siblings.

Selling your inherited family home can have similar steps to selling a regular property once you’re past the legal matters. This article breaks down what you can do, what challenges to prepare for and how to ensure a successful sale.

Steps to Sell Your Inherited Family Home

Most property sales involve the following steps:

1. Assess the property: An appraisal determines the value of the property at the time of the previous owner’s passing. You’ll need this value for tax purposes, but it can also help list the property for sale at an appropriate price.
2. Pay off remaining debts: If you inherit a home with a mortgage, you must pay the remaining debt, including taxes, before you can sell the property. One option may be to refinance a loan to make the payments. The buyer may also be able to take on a loan assumption that lets them take over the existing mortgage loan. 
3. Choose sale condition: Depending on the state of the property, you can choose to sell it as is or repair and renovate it. Improving its appearance may help increase its value.
4. Research market price: You may already have a price for your property based on the assessment. Identifying how much other properties in the area cost lets you gauge if your price is competitive. Overpricing can make it hard for you to find a buyer. Consider the lot’s size, condition and nearby amenities when pricing the property.
5. Consider how to sell the property: There are multiple ways to sell your property. You can list it yourself, hire a real estate agent or sell to a cash company. Hiring a real estate agent can help you with the market analysis, but prepare to pay a commission. A cash company can be a great option if you’re looking to sell quickly. You can even sell the property as-is without making repairs.
6. Remove property items: Prepare the property for sale by cleaning and removing any belongings inside the home. Identify if there are items you want to keep, sell or throw away. 

Documents Required for Selling Inherited Property

The required documents to sell your inherited house may depend on where your property is located. 

Generally, you should prepare the following:

• Proof of inheritance: This shows that you have the authority to sell the inherited property. The proof could be a copy of the will or a letter of testamentary.
• Property title: Title documents prove that you are the owner of the property. They also show that the title is free from disputes and may include records of past transfers.
• Tax records: Tax records can include your payment receipts, tax bills and tax assessment information. You may also need to prepare the estate tax return and estate planning documents.
• Improvement and inspection documents: If you’ve made repairs or improvements in the property, your buyer may require proof, especially if the improvements impact the property’s price. These documents can include receipts and maintenance records.
• Home loan documents: These documents can include first and second mortgage documents, loan payoff statements and mortgage lien release if the mortgage has been paid off.
• Seller disclosure: In some states, such as Pennsylvania, you’re required to inform your buyers of the house’s condition. You can fill out a seller disclosure statement to do so.

Is There a Time Limit on Selling Inherited Property?

There’s generally no time limit for selling your inherited property. However, some factors may influence your timetable. For instance, for the purposes of an estate tax, a time-of-death appraisal should be done within six months of the previous owner’s passing. If the previous owner was behind on mortgage, you also need to make these payments and settle the account as soon as possible. With reverse mortgage loans, you generally have 30 days to sell or turn over the property to the lender, though extension may be possible.

The length of time it takes to sell your property varies. Selling to a cash company may take only a few weeks, while listing the property yourself or through a real estate agent can take between several months to over a year. 

Common Disputes When Selling an Inherited Property

Selling an inherited property can be challenging due to potential conflicts. There are three main obstacles to be aware of:

Selling Inherited Property With Multiple Owners

You may not be the only one who has inherited the property. If you share ownership with your siblings or other family members, you may experience disputes on whether you should sell or keep the property. Some family members may prefer to keep the property due to emotional attachments, while you know that maintaining it is not within your means.

If you own the property with other people, ensure you communicate effectively to keep everybody on the same page. You can brainstorm the pros and cons of selling the property and identify what’s better for the family in the long term. If you’re the only one willing to sell, consider asking the other owners to purchase your share of the property. You can also sell your half of the house to a third party, although it may be more difficult to find a buyer. 

Consider having a third-party mediator involved in case conflicts get out of control. You might also need to pursue legal action if the issue can’t be resolved on your own.