23 Feb What Will You do With That Inherited Home?
Selling an inherited home can be messy.
To start with, there are financial costs accrued when making any necessary updates to attract buyers; and the emotions involved in sorting personal belongings and handing the keys over can be very affecting.
What about the tax consequences of selling an inherited home? Sometimes heirs have to deal with the costly liens or other tax implications, and connecting with an adviser is not only smart, it’s necessary. The sale of an inherited home is treated as a capital gain for income tax purposes. When you inherit, the property is usually worth more than it was when the original owner purchased it, and if you choose to live in the home for a few years then sell, there could be huge capital gains taxes – another reason to consider professional assistance.
Selling an inherited home at a loss is never the plan, but selling for a desired price will depend on the home’s condition. Ask yourself – will quick cosmetic touch-ups, like updating the landscape, or painting or patching the interior walls be enough to entice buyers? if not, you may need to consider more costly updates, like new flooring, replacing windows, or kitchen and bath remodels.
If your inherited home is in very poor shape, you may want to start researching home investors.
Most home investors are cash buyers that can buy your inherited home ‘as-is’, saving you the time and energy of an extensive rehab.
What about hidden problems? What if there are unexpected environmental concerns? In situations like this, or when the home is worth less than the amount the borrower still owes, choosing not to accept the home at all may seem the simpler path.
Whichever direction you choose, the process of selling an inherited home could prove very emotional. Be sure to surround yourself with professionals who will be empathetic and helpful.