A difficult topic I routinely have to discuss is about selling a home inherited from a parent or other relative after they have passed away—an overwhelming experience, filled with emotions and many questions.
While talking about this situation is difficult, it is smart to be prepared. This includes having conversations as a family to determine who will be included in the will to inherit the home, where the deed to the home is kept, and where other paperwork is located.
After the estate has been settled, and the home is received as an inheritance, deciding to sell, rent or keep the home is the first step, which will help determine what to do next. For those who decide to sell the home, it is a good idea to work with a team of professionals, including a lawyer and a real estate professional who can offer advice and guidance throughout the process.
Although each situation is unique, I have put together the following four tips to help you prepare to sell an inherited home:
1. Assemble a strong team of professionals. Working with a real estate agent, lawyer and, potentially, a tax specialist, can help make the process of selling an inherited home go more smoothly. A team of professionals can give the guidance necessary to prepare the home for sale, and get all of the affairs in order. A real estate professional can offer crucial, local market information, which is especially helpful if the heir does not live nearby. Lawyers and tax specialists can help put all of the processes in order to ensure selling the home is as easy as possible on you and your family.
2. Do a walk through, and get organized. Going from room to room, and looking at everything, from the condition of the floors, to how fresh the paint looks, can help determine what may need to be done to the home to help it sell more quickly. If the inherited home is older, an inspection is important before making any decisions, as there may be certain systems in need of renovations. Equally important is to gather all of the necessary paperwork, such as the deed to the home, as well as researching whether there are any mortgages on the inherited home, which need to be paid. Even if the original mortgage was paid off, a reverse mortgage may have been negotiated to help cover expenses. Looking into local property taxes and when they were last paid also is important. Don’t forget to check with the local utility providers to ensure the home continues to receive power and water.
3. Have the home valued, and price it correctly. Property received as an inheritance is not considered to be income by the beneficiary. The adjusted basis of a home is its fair market value at the time it was inherited. So, it is important to get an accurate appraisal of the home. A real estate agent also can provide counsel on an appropriate listing price to match market value. Out-of-town beneficiaries also can find it difficult to select competent appraisers, inspectors and other professionals to assist in the home selling process, all with which a real estate professional can assist.
4. Consider staging or other cosmetic improvements. Although not necessary in all markets or price ranges, staging can be the difference in getting a home sold in a price-competitive market. An inherited home may not be furnished in the style of other local homes on the market selling at a similar price. A plan also needs to be put into place for what to do with the furnishings in the home after it has sold. Many local charities would love the opportunity to put these items to good use. A real estate professional can help determine whether or not staging is a good fit for a specific situation. They also may suggest making aesthetic improvements to the home, such as repainting rooms and/or landscaping the yard or other parts of the property. Make sure the lawn and landscaping look good, and the exterior of the house is in good condition. Low curb appeal can keep potential buyers from researching a home they may otherwise love. Perhaps most importantly, having an experienced real estate professional to answer questions quickly and accurately frees up time to devote to other activities and events.
John Karadsheh is a licensed REALTOR® with Coldwell Banker Trails And Paths Premier Properties. He also is an Associate Broker, an Accredited Buyers Representative, a Certified Residential Specialist and was ranked the No. 2 Residential Real Estate Agent in Arizona by Ranking Arizona Magazine. You can contact John with any of your real estate questions. Call him at (602) 615-0843, or go to his Web site at www.BuyAndSellAZ.com.