Selling an Inherited Property

Inheriting a property brings both practical and emotional considerations. Whether you're looking to sell quickly or taking time to decide, understanding the process helps you make informed decisions.

First Steps After Inheriting

Confirm Legal Authority to Sell

Before you can sell, you need legal authority:

• Probate: If the property goes through probate, you'll need letters testamentary or letters of administration from the court
• Trust: If held in a trust, the trustee has authority to sell per trust terms
• Joint tenancy with right of survivorship: Surviving owner typically has immediate authority
• TOD (Transfer on Death) deed: Named beneficiary can transfer after recording death certificate

Consult with an estate attorney if you're unsure about your situation.

Secure the Property

Once you have authority:

• Change locks if needed
• Ensure homeowner's insurance is in place
• Maintain utilities as needed
• Remove any valuables
• Keep up basic maintenance

Assess the Condition

Inherited properties often haven't been updated in years. Take stock of:

• Deferred maintenance
• Outdated systems (electrical, plumbing, HVAC)
• Cosmetic condition
• Contents that need to be handled

Understanding Your Tax Situation

Stepped-Up Basis

This is the good news for inherited property. Your cost basis is typically "stepped up" to the fair market value at the date of death, not what the original owner paid.

Example:

• Parent bought home for $80,000 in 1985
• Fair market value at death: $400,000
• Your stepped-up basis: $400,000
• If you sell for $410,000, your gain is only $10,000

This can significantly reduce capital gains taxes compared to what the original owner would have owed.

Consult a Tax Professional

Estate and inheritance taxes vary by state and situation. Get professional tax advice specific to your circumstances.

Selling Options

Sell As-Is

If the property needs work, you might sell as-is:

• Faster process
• No repair costs upfront
• Lower sale price
• Appeals to investors and cash buyers

Make Strategic Updates

Some improvements might yield returns:

• Deep cleaning and decluttering
• Basic landscaping
• Minor repairs
• Fresh paint
• Updated fixtures

Full Renovation

Major updates before selling:

• Highest potential sale price
• Significant upfront investment
• Time commitment
• Risk if market changes

Handling Contents

Estate sales, donations, and disposal of decades of belongings take time. Options include:

• Estate sale companies (they handle everything for a percentage)
• Donation pickup services
• Junk removal services
• Family distribution of meaningful items

Don't underestimate this process—it often takes longer than expected.

Emotional Considerations

Selling a family home is emotional. It's okay to:

• Take your time making decisions
• Keep meaningful items
• Take photos before clearing the home
• Acknowledge the difficulty of the process

But also be practical:

• An empty home costs money to maintain
• Property condition can deteriorate
• Market conditions change
• Holding costs add up

Working With Multiple Heirs

If multiple people inherited the property:

• All owners typically must agree to sell
• Proceeds are divided according to the will/trust
• Disagreements may require mediation or legal intervention
• Communication is essential

Out-of-Area Sellers

If you inherited property far from where you live:

• Local agent familiar with the area is essential
• Technology enables virtual walk-throughs and remote signing
• Property management might be needed short-term
• Factor in travel if you need to handle things in person

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Inherited a property and not sure what to do? Contact Greg Franklin or call (559) 816-7780 to discuss your options.