Losing someone you love is never easy, and navigating the emotions that follow can feel overwhelming. Amid your grief, you’ve been left with a significant and life-changing gift: the inheritance of a home.
Inheriting a property can bring a mix of emotions—gratitude for the generosity, nostalgia from cherished memories, and uncertainty about what to do next. Deciding its future can be even more complicated if the home holds sentimental value, especially if other heirs are involved.
While selling an inherited house may not be the easiest emotional choice, it is often the most practical. If you’re considering this route, acting sooner rather than later can help avoid unnecessary complications or expenses. Below are the key reasons why selling an inherited property quickly might make the most sense for your situation.
1. Sidestepping Capital Gain Taxes
Like many financial situations, your decision to sell quickly may come down to taxes. When you inherit a home, you acquire a significant financial asset, and the government wants to take its share of your investment gains.
In the eyes of the government, you now hold an investment property. Unless you decide to live in the home, it will now be subject to capital gains taxes, which can add up to a sizable amount.
When you inherit a home, you will only pay capital gains taxes on the increase in value from when you take possession to when you sell. The IRS will step up the basis (the starting value) to the day you take ownership. The longer the house is left to increase, the more the IRS charges.
The Benefit
If you sell immediately, you can avoid capital gains altogether.
2. Increasing Liquidity
You inherited a home, and it increased your net worth. Even homes that are in disrepair still have significant value. But that boost to your bottom line is tied up in the house until you sell it. The fastest way to do something with the wealth is to make it liquid—turn it into cash.
The Benefits
Cash is king and can be used to pay off debt, fund an education, start a new investment opportunity, or spend. There is no wrong way to use your inheritance, but you can only use the money once you sell the house.
Liquidity also becomes essential as you settle an estate. As you split an estate between more than one person, assets must often be liquidated to disperse funds evenly. The faster you sell the home, the quicker you settle the estate.
3. Avoiding the Property’s Carrying Costs
Carrying costs refer to any ongoing expenses from owning the property. Remember, owning and maintaining a home isn’t cheap, even if you don’t have a mortgage, insurance, utility bills, maintenance and upkeep costs, repairs or updates, and more. You may struggle to find the cash to properly care for your inherited home. And if you don’t live close by, it can be more complicated.
It’s common for heirs to find that holding onto a property is too expensive. After months or years of trying to hold on to a home because of an emotional attachment, they sell it anyway. Rather than paying months on end of maintenance costs, it often makes sense to put it on the market instead of continuing to sink money into it.
How to Sell Your Inherited Property Quickly
Regardless of the reason you decide to sell the home you inherited, time is of the essence. Working with a real estate investor to sell the property is the best decision in this situation.
Real estate investors exist for situations like this. It’s not uncommon for an inherited home to be in some level of disrepair and need quite a bit of work before it can be ready to list for sale. When you work with an investor, you can sell your house as is. They do all the hard work for you, making this difficult time around the loss of a loved one just a little bit easier.
When you sell to a reliable company that buys houses, you are partnering with someone who can lift part of your burden. They often handle unfortunate situations like yours, so they know precisely how to help you.
You can close on the house in as little as a week, freeing up the cash needed to settle the estate and eliminate the burden of preparing the house to sell. They will breeze through the deal and take care of all the work after closing, allowing you to move on. If you are ready to sell, search for direct homebuyers who can walk you through the process today.
Infographic
Selling an inherited house can be emotionally challenging, but it often makes practical sense. Acting quickly helps avoid complications and extra costs. Discover key reasons to sell your inherited property promptly in this infographic.
