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How to sell Inherited House fast That Is in Bad Shape?

Did you inherit a fixer-upper house and feel overwhelmed at the amount of work it needs? Don’t worry; we’ve got you covered! Though inheriting a property in bad shape is far from ideal, there are ways to help the process go much smoother.

According to a survey from Coldwell Banker, 80% of Americans said they prefer to buy move-in-ready homes. But don’t lose hope — you still have options available if you inherit a house that’s in poor condition.

If the home you’ve inherited (or are about to inherit) is in terrible condition, and you’re not sure if you can afford it, know that you still have options. You’re absolutely not obligated to sit on a home you can’t afford to keep. In better conditions, where the inherited home is in relatively good shape, the beneficiary has three options: rent, sell or keep. If keeping the home’s not an option, and you don’t have the time or money to restore the property for rental, you still have the option to either sell or decline the inheritance. Here’s how that works:

What to do when you inherit a house that needs work

So, what happens if you inherit a house in bad shape? First things first, take a deep breath. We know how daunting it must seem, the key is to focus your energy on the next best step, such as:

Finding a real estate agent: Hiring a great listing agent will streamline the process and help determine which repairs are worth doing. It will be beneficial to choose an agent with experience selling properties as-is so they can guide you through the process.

Prioritizing repairs: When you inherit a house that needs work, it might be tempting to gut it and start with a blank slate. However, costs can quickly add up and may not provide the return on investment (ROI) that you expect.

Selling the Home As-Is

Another solution for an inherited home that’s in disrepair is an as-is, or cash offer. A sale like this is quick, can potentially be closed within two weeks, and may be acceptable to your mortgage lender as a short sale, if the home is underwater. While it’s true that you are unlikely to get as much money as your inherited home might be worth when it’s all fixed up — if you don’t have the time or money to make those repairs, a cash sale can solve your problems quickly, and without any headache.

Sell as-is: If the property needs an extensive amount of work done and you don’t have the time, money, or desire to take on a massive renovation project, your best option might be to sell as-is. Selling a house as-is means you likely won’t have to put much (or any) money into it before finding a buyer.

Pros & cons of selling your house as-is

Before deciding to sell your house as-is, it may be helpful to explore the potential advantages and drawbacks.


PROS:

  • Timeline: One of the biggest draws of selling as-is is the ability to put your house on the market and close the deal sooner. If you decided to do renovations, it would be better to hold off on listing to maximize your offers.

  • More money in your pocket: Selling as-is won’t require you to spend as much on repairs as a traditional sale process. When you market your property as-is, you are setting buyer expectations that you will do minimal if any repair work.


CONS:

  • Lower offers: One of the biggest cons to selling as-is is you will likely have to sell your property for less than its actual market value. This will depend on how extensive the repair work is. If buyers know they will have to spend thousands for repair work, they will likely lowball you.

  • May still require some repairs: Even though you’re selling as-is, you may still need to make a few repairs before you get any bites. These will likely be deal-breaking repairs such as structural issues or pest infestations.

What not to fix when selling a house

When you inherit a property that needs extensive repairs, you need to prioritize the work. We mentioned this above, but it’s worth reiterating — speak with a local real estate agent to help determine which repairs will provide the best ROI in the current market.

  • Normal wear and tear: Cosmetic issues are one thing you shouldn’t bother with — as most buyers are ok with doing cosmetic fixes themselves. So if you’re itching to fix the leaky faucet, old paint, or outdated fixtures, think again.

  • Old appliances: If you have outdated appliances such as an old refrigerator or stove, don’t bother replacing them. If you can’t help yourself, check out the used appliance market instead of brand new.

  • Kitchens and bathrooms: Big renovation projects such as kitchens or bathrooms aren’t something you should worry about. They are expensive, and the ROI isn’t as good as you think.

  • Driveway cracks: Curb appeal does tend to provide a higher ROI than other repairs, but repaving driveways is pricey. There are better, more affordable ways to invest in your curb appeal.

And, of course, you have to take into consideration the following problems that might arise when trying to sell inherited house.

5 Problems You Could Face When Trying to Sell an Inherited House

What may seem like a very generous gesture by a deceased loved one could, in fact, end up being a major inconvenience. Inheriting a home and deciding what to do with it can be stressful in itself. You may have to face some tough financial and emotional decisions along the way. If you are aware of what could be facing you, then you can at least prepare for when you inherit a home.

1. Pre-Existing Debt and Unpaid Bills

Unfortunately, this is a common pitfall that faces many people who inherit old homes. If the home itself is not paid off, this means you may inherit the remaining mortgage owed on the home too.

The house could also be in poor condition. This means you’ll need to spend your own money on renovations if you intend to sell it.

Ultimately, there are three main options when inheriting a home. You could choose to sell it, move into it or rent it out.

If you currently renting and the home is in good condition, then moving into may be a great idea. But this could become an issue if the home was left to you and your siblings. You’ll have to decide who gets to live in it, first.

The other two options generate money and are often the most common decisions. You can either sell it and split the money among you and your siblings if that’s how it was inherited. Otherwise, you could rent it out and split the rent.

2. Sibling Conflict

On the topic of sibling inheritance, this could put a strain on your relationship(s) if you cannot come to a mutual agreement. Sibling conflict is common, but when money is involved this can put a real strain on things.

It’s best to go over your options carefully and be realistic about your expectations. Speak openly when trying to reach an agreement. Otherwise, you may have to leave it up to the court system to decide.

3. Huge Tax Breaks Come at a Price

The great news is that you don’t pay capital gains tax when you sell an inherited home. Why? This is because the home’s property tax basis is stepped to market value at the date of a loved one’s death.

In short, capital gains tax does not apply to the appreciation or increase in the value of the home. You inherit the home at fair market value at the date of death. Once the home is transferred to your name and it increases in value, only then does tax apply to the sale of the home.

Now, this sounds just peachy, but this tax break comes at a price. You may not have to deal with capital gains tax, but you do still have to pay federal estate taxes. This applies when an estate is worth more than $5 million in assets.

However, this threshold can be much lower in other states. This means that the location of the inherited home plays a big role in how much federal estate tax you’ll need to pay.

4. A ”Free” Home is Never Really Free

If an inherited home still has an existing mortgage, it can sometimes be settled by the state. Generally, you’ll receive a home that is ”free” of debt.

However, if you’ve only ever rented, you’ll soon learn that owning a home is a major expense. It may be an expense that you’re just not ready for, too.

Even if you’re not paying a mortgage, owning a home comes with ongoing expenses that can squeeze your budget. Some of these include property taxes, heating, water, and electricity bills, homeowners insurance, and liability insurance.

The reality is that owning a home is an ongoing expense. If you just don’t have the budget for it, it’s probably in your best interest to sell it.

5. Conflict Over Sentimentality

Inherited homes come with a decent amount of emotional baggage, too. You may find that the physical home and its contents bring up emotional conflict between you and other family members.

While sorting through all the physical goods – furniture, electronics, clothing, jewelry, crockery, etc., emotions are high. This is because all of these things are tied to memories and sentimentality.

Conflict could arise if you and a sibling want to keep the same sentimental item. This could be anything – fine china, a piece of jewelry, your father’s favorite painting, an antique clock. Unfortunately, this can cause strife between family members.

Aside from this, letting go and selling certain items within the home could be very difficult too if you intend to sell the house. This is a process that must be done slowly and with consideration- don’t rush it, or you may regret it.

The emotional stress of clearing out and selling an inherited property is very real. However, it’s important to not leave the home untouched for too long. This can be costly and you could also lose major value on the home and its contents.

Tips for selling a house as is

If you decide selling in as-is condition is the best option for your situation, here are some tips to help the process go as smoothly as possible.

Pre-listing inspection: When selling a house as-is, a pre-listing inspection is necessary. This will help you uncover anything wrong with the property to disclose to buyers. Buyers may be more understanding if you are transparent about the issues upfront.

Price it accurately: Pricing a fixer-upper home can be challenging, which is why many people choose to work with an experienced realtor. Try to find a real estate agent who has previously sold properties in as-is condition.

Provide disclosures: Transparency will look good to potential buyers and give you a chance to highlight the positive aspects of the home. Selling your as-is doesn’t mean you get to avoid disclosing the things that need work. Many states have mandatory disclosures you have to make to buyers — and failing to disclose could open you up to a lawsuit.

How to sell a fixer-upper house fast

Selling a house in poor condition is typically more challenging than selling a move-in-ready property. In many markets, traditional buyers aren’t interested in a home that needs extensive repairs, which is why many find that selling to a house flipper is the best (and quickest) option.

Selling a house in poor condition poses many challenges. Still, you can streamline the process by hiring an experienced real estate agent and disclosing any problems to buyers from the get-go.

The main benefit of an as-is sale is that you don’t have to lift a finger in the selling process. You need not fix anything, restore anything, or clean anything up. A buyer comes by, takes a look at the house, makes you a cash offer, and if you accept, they work to close in as little as two weeks.

Those who choose to accept a cash sale often do so for a variety of reasons, some of which include:

  • The inherited home is out of state, or in another city that’s far away, making it difficult to keep it up and check up on the property.

  • There are tax benefits to selling your home

  • You have inherited the home with a number of other parties, and it’s in everyone’s best interest to sell the home so that the inheritance may be divided evenly.

  • The home is “underwater”, or there’s more owed on it than the home is worth. In this case, a cash offer can help secure a short sale. A short sale is when the lender agrees to forgive a loan for less money than is owed.

If you’ve inherited a home that’s simply too far gone for you to save, know that you’ve got options. Easy Outs Homes is a trusted, local real estate investor in the Harford County, Maryland and surrounding area ready to help. We’ll make you a fair, cash offer on the home as-is, so you don’t have to worry about a single repair.

Looking to Sell an Inherited Home?

Easy Outs Homes is your go-to when trying to sell an inherited house you just cannot afford to keep. We understand that an inherited home can seem like a real burden, that’s why we are here to streamline the selling process for you!

If you’ve become the accidental owner of an inherited home, learn more about the services we offer and how we can help.

We’ll pay cash for your house (even if it’s in bad shape)

If you inherit a house in bad shape and don’t have the money or time to complete a massive renovation, consider selling to a reputable cash home buying company. We’ll help you avoid a drawn-out closing process and get money in your pocket faster.

Call us today at 443-616-5486 or apply for your free cash offer online, and we’ll get back to you within 24 hours!

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