Inherited a Home? 5 Steps Before You Sell or Keep

Inheriting a home can be both a lucrative financial opportunity and a challenge. Before deciding whether to keep or sell inherited property, there are a few legal, financial, and emotional factors to consider. To help you reach your real estate goals and make informed decisions, we have three key steps to take before making any decisions about the house you've just inherited.

Step 1: Understand the Legal and Financial Implications

Probate and Inherited Property Title Transfers

If the home was left to you in a loved one's will, it may need to go through probate before the title can be transferred to you. If the home was in a trust, the process may be more straightforward and faster. It's best to consult with an experienced real estate or probate attorney to get guidance on your specific situation and what's required to take legal ownership of the inherited property.

Debt Considerations

Does the home have unpaid property taxes or an existing mortgage? If the house comes with significant debt, selling it may be the best option for your financial future.

Inherited Property Tax Implications

If you are considering selling, it's important to understand any capital gains taxes you'll be on the hook for. Typically, you'll pay capital gains taxes based on the house's value from the time you inherited it to when you sell it. That means if you were to immediately sell the home after inheriting it, you likely wouldn't pay capital gains tax.

Step 2: Consider Your Lifestyle and Goals

Once you've reviewed the financial and legal considerations that come with the property, consider your lifestyle and what you want for your financial future. Here are three areas to evaluate:

• Location: If you're considering keeping the property as an investment, what's the market value? How's the area? Has it been appreciating in value over the last few years? If you're considering living in the home, do you like the location? Could you see yourself happily living there for the foreseeable future?
• Rental Opportunities: Selling the home and living in it aren't your only two options. You could also generate passive income by renting it out. However, that comes with its own set of challenges, such as tenant screening.
• Emotional considerations: If you've inherited a property, it can come with emotional or sentimental value. Before making any major life decisions, give yourself the space and time needed to work through any emotional considerations, ensuring you're making the best decision for your needs and future.

Step 3: Do Your Prep Work

If you decide selling is the right move for you, you'll want to get it ready for the market. Research nearby properties and what they've sold for, and consider some enhancements that can increase the property's value and appeal. Fresh paint, a manicured front lawn, and even new lighting could make a significant difference without breaking the bank.

Before making any large-scale renovations, carefully consider your return on investment. Big projects may come with hefty price tags and don't add significantly to the home's value. If the house requires major renovations that don't add value, it may be best to try selling the property as-is.

Not Sure What To Do? Start With a Free Home Evaluation

Inheriting a home is a unique situation, one that requires careful consideration before making any moves. If you're wondering what to do with an inherited house, start by connecting with us. We can provide an accurate home valuation to help you make an informed, confident decision.