A Full Guide To Selling An Inherited House In Detroit

Sometimes you end up inheriting a house that you expected to but it’s also possible that you might one day inherit a house you didn’t. While it might be a welcome addition to your real estate portfolio, it could also be a financial albatross hanging over you, depending on your situation. 

You do have a few options when it comes to deciding what to do. First, you can choose to live in an inherited house. Second, you can rent it out and earn extra income as a landlord. Third, you can choose to sell an inherited house. 

If selling an inherited house is your preferred way to go, you’ve got a couple of options as well. You can sell it on the open market or you can sell it as-is to a cash home buyer like 810 Home Buyers. The latter version is often very quick and can put cash in your hands fast. But if you decide you want to try the open market, here is a handy guide to show you all of the many steps and potential pitfalls ahead of you. 

How to Sell Your Inherited House In Detroit, MI

A Will for an Inherited House for Sale

Know What Kind of Inherited House You Have

If you decide to sell the house you’ve inherited, the first thing you need to understand is it’s worth. The quickest way to find out is to look at similar properties in the area that have sold recently. Take a look at the difference between the listing price and the final sale price. That will give you a good sense of how the market sees it. There will be differences based on condition and features such as rooms or landscaping, but it gives you a number to start working with.

Now you need to know the financial situation tied up in the inherited house as this will have an impact. Is there anything outstanding on the mortgage and if so, how much? Are there liens or foreclosure issues attached to the house? Have property taxes been paid up to date or have they been piling up or unpaid? Answering these questions you’ll give you a good idea of the true value of the house as potential buyers will see it. 

Before you list the inherited house, you absolutely must be clear on the legal ownership of the property. Are you the sole inheritor or did multiple people inherit the house? If it was more than one person, everyone has to be in agreement that the house should be sold. If they aren’t, you may need to “buy out” one or some of the other inheritors in order to proceed. That could be an upfront payment or it could be contingent on the sale. Whatever it is, be sure that everything is documented and authorized legally. Otherwise, you could find yourself in trouble. 

How Will This Inherited House Sale Impact You?

When you sell an inherited house, there are financial implications you must consider. You can’t claim ignorance after the fact and expect the IRS to take it easy on you. That’s because you may owe taxes on the proceeds of any inherited property sale. Every state has its own rules about inheritance tax. Regardless, you’ll have to pay federal taxes on the sale, which will be determined by the value of the house. The higher the value, the higher the tax rate.

There are exclusions but inherited properties only qualify for tax exemptions if you live in it for two years. The good news is that you won’t pay capital gains tax on anything before the previous owner’s death. You are only responsible for as long as you’ve been the legal owner of the property.

When you do make a sale, you’ll have to report it to the IRS because, to them, an inherited home sale is taxable income. The exact tax number is based on the fair market value as well as any improvements you might have made to the house. Even if no taxes are owed, you still want to report it to the IRS. Otherwise, you could run into issues eventually.

Supplies to Clean an Inherited House for Sale

Prep the Inherited House For Sale

Once your financial considerations are sorted, you’ll need to prepare the house for sale. The first thing to do is to get rid of any personal belongings left behind. If the previous owner was a hoarder, you’ll want to bring in a cleaning crew that can handle this kind of situation. You’ll also need to do some decluttering in general. Depersonalizing rooms, hiring a stager, and hiring a photographer are all common strategies for improving the look of an inherited house before selling.

As for those personal items, it can be a difficult decision. It’s very important to think about where everything should or needs to go. You should collect any mementos or valuable items immediately and keep them sage. Check with relatives or friends to see what they might want as well. As for what’s left after that, you need to decide if it will be given away, thrown away, or sold. You can also hold a yard sale or estate sale in order to find motivated buyers for furniture and home items. The proceeds can be put towards covering taxes or other fees.

Price Your Inherited House Wisely

Pricing an inherited house can be tough. The truth is that no matter what you list, you’re unlikely to get your asking price. Market conditions will dictate a lot of price fluctuation but buyers are likely to try to bring the price down based on condition, financial issues, and the perception that you’re trying to offload the house. 

It’s up to you to know how much the house is worth so you know what your minimum acceptable offer is. Buyers will just keep trying to go lower so you need to know where you draw the line. Don’t let emotions or memories cloud your negotiations. Just because it’s an inherited house or you’re eager to sell, that doesn’t mean you don’t have leverage. But it just may take some time to get there. 

In the meantime, it’s important to keep on the mortgage payments and utility payments while selling the house. You don’t want to mess up the sale with some last-minute revelations that will make the buyer give pause.

Sell the Inherited House As-Is In Detroit, MI

As we’ve discussed, there are many financial implications that come with an inherited house, not to mention all of the headaches and steps you need to deal with when selling on the open market. An alternative that will allow you to sell the house without dealing with all the hassles involved is to sell it as-is to a cash buyer like 810 Home Buyers.

All you need to do is contact them with details about your inherited house. They’ll assess the property and perhaps even take a tour. Then they’ll make you a fair offer and pay you in cash if you decide to take it. If you approve, you set the conditions of closing, often within a few days. You won’t need to make any repairs or clean up. You can walk away from the inherited house with cash in your hand and then it’s not something you have to worry about anymore.

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