Selling a home you inherited may require home renovations such as painting, small repairs, and a deep clean. Having a home inspection conducted will identify potential issues.
Transferring real estate can be complicated and subject to many specific regulations, which vary from state to state. Consider these tips before you get started.
Get an appraisal
An appraisal can determine the value of the property and ensure the home and land are valued fairly.
Hire a real estate agent
Real estate agents can help set a realistic listing price based on their experience and comparable homes in the area. They may also help refer you to other local professionals—photographers, attorneys, and inspectors.
Hire a real estate attorney
When selling inherited property, an attorney may be helpful if complications arise, for example, liens against the home you didn’t know about or other errors. In some states, an attorney is required at closing.
Prepare for closing costs
Home sellers, as opposed to buyers, usually pay the commission of the real estate agents. It’s usually 6% of the sales price, split between the seller’s and buyer’s agent. As a negotiating point, consider offering to pay some or all closing costs. Closing costs can include a title search and title insurance, home inspections, and fees associated with a mortgage.2
Keep in mind, you can often use some of the proceeds from selling your home to cover your closing costs, so you won’t necessarily have to pay for them out-of-pocket.
Consider capital gains tax implications
When you inherit property, you get a step-up in cost basis, and the IRS will assess the value of the house at the time you inherited it. If you then sell the house for an amount that’s greater than the value the IRS assigned to it, you’ll owe capital gains taxes on the difference.