Selling an Inherited Property?
Inheriting a home can be overwhelming, especially when you're grieving. This guide walks you through every step, from understanding probate to closing the sale.
Understanding Your Inherited Property
When you inherit a home, you become the new owner, but the process isn't always straightforward. The property may need to go through probate (a legal process that validates the will and transfers ownership), or it may transfer automatically if held in a living trust. Either way, you'll need to understand your rights and responsibilities as the new owner before making any decisions.
Key things to know: You're typically responsible for property taxes, insurance, and maintenance from the moment of inheritance. If the home has a mortgage, you'll need to address that too, though federal law (the Garn-St. Germain Act) generally prevents lenders from calling the loan due just because of an ownership transfer through inheritance.
Probate vs. Trust: What's the Difference?
If the deceased had a living trust that included the property, you may be able to avoid probate entirely. The successor trustee can transfer the property directly to you, often within weeks.
If there's no trust, the property will likely need to go through probate court. In California, this can take 6-18 months. In other states, timelines vary. Some states offer simplified probate for smaller estates (in California, estates under $184,500 may qualify for a simplified process).
During probate, the court oversees the distribution of assets. If you want to sell during probate, you may need court approval, though California's Independent Administration of Estates Act can simplify this significantly.
Tax Implications You Need to Know
One of the biggest advantages of inheriting property is the "stepped-up basis." This means the property's tax basis is reset to its fair market value at the date of death, not what the original owner paid for it.
Example: If your parent bought a home for $100,000 and it's worth $500,000 at the time of their passing, your basis is $500,000. If you sell for $510,000, you only pay capital gains tax on $10,000, not $410,000.
In California, Proposition 19 (effective February 2021) changed the rules for property tax reassessment on inherited properties. You may face a reassessment unless you use the home as your primary residence. Consult a tax professional for your specific situation.
Always consult with a CPA or tax attorney, inheritance tax rules vary by state and your specific circumstances.
Dealing with an Inherited Property in Poor Condition
Many inherited homes haven't been updated in decades. They may have deferred maintenance, outdated systems, or even hoarding situations. The good news? You don't need to fix anything before selling.
Options for selling as-is:
• Cash sale: Companies like Acquily buy inherited properties in any condition. No repairs, no cleaning, no staging.
• As-is listing: Our agents specialize in marketing inherited properties as-is on the open market, attracting investors and buyers who see potential.
Don't spend money on repairs you may never recoup, especially if the property is in a different city or state from where you live.
Multiple Heirs? How to Handle Disagreements
If you inherited the property with siblings or other family members, all parties need to agree on what to do. This can be one of the most stressful parts of the process.
Options when heirs disagree:
• Buyout: One heir buys out the others at fair market value
• Sell and split: Sell the property and divide proceeds according to the will or intestate succession laws
• Partition action: As a last resort, any heir can file a court petition to force a sale
We recommend getting an independent appraisal that all parties trust, then having an open conversation about everyone's goals and timelines.
Your Next Steps
1. Determine if probate is required (check if there's a trust)
2. Secure the property, change locks, maintain insurance, pay property taxes
3. Get the property appraised to understand its current value
4. Consult a tax professional about your stepped-up basis and any state-specific implications
5. Decide whether to sell, rent, or keep the property
6. If selling, explore your options, cash offer for speed, or listing for maximum value
You don't have to navigate this alone. Acquily specializes in helping people sell inherited properties quickly and fairly, in any condition.
Frequently Asked Questions
Do I have to go through probate to sell an inherited house?
Not always. If the property was held in a living trust, you can avoid probate entirely. If probate is required, in many states you can still sell during the process with court approval.
How long does it take to sell an inherited property?
With a cash offer, as few as 21 days after legal ownership is established. Listing on the market typically takes 30-90 days. Probate timeline is separate and varies by state.
Do I need to pay the mortgage on an inherited house?
Yes, if there's an existing mortgage, you're responsible for payments. However, the lender cannot call the loan due solely because of inheritance (Garn-St. Germain Act). You can sell the property to pay off the mortgage.
Can I sell an inherited house that needs major repairs?
Absolutely. We buy inherited properties 100% as-is. No cleaning, no repairs, no updates needed.
Get a free, no-obligation offer on your inherited property