Should You Sell an Inherited House?
- Scott Westfall
- 2 days ago
- 8 min read
Should you sell a house after you inherit it? To determine if selling inherited real estate is the best option for you, you’ll want a full picture of your asset.
This post will break down all the considerations you should be pondering if you’re thinking of selling inherited property. We also have a thorough, viral guide to inherited real estate if you want to dig in further.
What to Do First If You Inherit a House
When you inherit a house, the first thing to do is call your lawyer or estate planner. They’ll be able to give you a full scope of the particulars of your inheritance situation.
You’ll also want to make sure the property is secure and all the bills are up-to-date. Check out our guide to inherited houses for a list of first steps to cover your bases.
Should I Sell or Keep an Inherited House?
When you inherit a house, weigh the pros and cons of selling or keeping the property. Consider:
The financial impact: Inheriting a home comes with tax implications, a mortgage (in some cases), and the costs of homeownership. Keep reading to learn more about some of these.
The emotional impact: If you inherited a family home, it could be emotionally challenging to let it go. Additionally, if there are multiple heirs, their emotional attachment or potential disputes could come into play.
The work: The state of the inherited property could affect if you ultimately want to sell it. If it needs repairs or extensive cleaning, consider if you want to devote the time and money to that or if you’d rather sell fast for cash.
Inheriting a house is rarely very straightforward. For example, one Virginia Beach resident inherited a home with a reverse mortgage, multiple heirs, and liens on the property. However, rather than simply forfeit the house to the bank, she was able to find a better solution that turned a profit. She says:
“My parents’ home was in a reverse mortgage, and I didn’t have any idea how to sell it. By working with CGP Real Estate, we overcame a number of hurdles thanks to Scott’s knowledge and expertise and accomplished the goal to everyone’s benefit!”
If you’re looking for the easiest and quickest way to sell an inherited house in Virginia Beach or nearby, check this out.
Questions to Ask Before Selling Your Inherited House
To determine if you should sell an inherited house or hang on to it, here are the questions to ask and factors to consider:
Can I sell my inherited house right away?
Even if you want to, you may not be able to sell a house you inherit right away. It may be tied up in a legal process. Get answers to these questions to see if you can start the inherited house selling process:
Will the house go through probate?
How long is the title transfer going to take?
Are there any other heirs to consider in the process?
Is it worth paying a Hazardous Risk Premium?
How will selling a house I inherited affect my taxes?
The tax implications of selling an inherited house may affect your decision to get rid of it. You may be responsible for several different kinds of taxes on your inherited property:
Property tax: You’ll owe these, which are set by the home’s local municipality. You’ll want to check to be sure there aren’t any back taxes owed, too. You can likely deduct property taxes from your itemized income taxes.
State inheritance tax: Some states charge a tax on the estate as soon as it’s inherited. (Inheriting a house in Virginia – and some other states – doesn’t hit you with this one.)
Federal estate tax: Depending on the current IRS threshold and the value of the inherited property, you might owe an additional estate tax.
Capital gains tax: You’ll owe these if the property increases in value between the time you inherited the house and the time you sell it. (There are also a few legal ways to avoid paying capital gains if you’re intentional about it.)
Virginia Beach Tax Implications for Inherited Real Estate
The tax impacts of selling an inherited house in Virginia Beach potentially include a grantor’s tax and a hazardous risk premium.
Sellers of inherited property pay the Virginia grantor’s tax when the property is transferred to the new owner. The Virginia tax rate is $1.00 per $1,000 of the sales price and is split between the state and local municipality.
Sellers also pay $2.00 per $1,000 of their inherited home sales price as a hazardous risk premium if they sell it and claim the profits within the first year after inheriting. It’s charged to insure against potential unresolved debts of the estate.
We did a more thorough breakdown of the potential costs and tax implications of selling an inherited house in our guide.
How do I figure out the value of my inherited home?
Determining the worth of the house you inherited is critical to your choice to sell or keep it. It will also help you price it correctly if you do sell, speeding up the inherited house selling process.
To figure out how much your inherited house is worth, you can get:
A comparative market analysis: To figure out how much your inherited house is worth, you can get a comparative market analysis. CGP owner Scott Westfall and his team provide specialized CMAs for inherited homes, ensuring the stepped-up basis is properly considered.
An appraisal: A licensed appraiser can give you an idea of what the inherited house will be worth based on its location, condition, and features.
A value tracker: Tools like Homebot can be used to track the value of your property over time, empowering you to build wealth through real estate faster.
Is there a mortgage or reverse mortgage on the house?
If there’s a mortgage on the house you inherited, you will be responsible for paying it off. This could affect your decision to sell or keep inherited property.
If you inherit a house with a reverse mortgage, it can complicate your options for selling and paying off the home. Check out our easy guide to reverse mortgages for a full breakdown.
Do I need to do repairs on the house I inherited before selling it?
Short answer: no, you can always try to sell a house “as-is.” In fact, you may be able to find a family-focused cash offer company that can get you money for the house in any condition quickly. (p.s. we do that in Virginia Beach and nearby cities.)
However, there are pros and cons of selling your house as-is or doing renovations.
Reasons to sell fast:
To avoid a lengthy selling process
Too much work needs to be done
To get cash quickly
To avoid added stress when settling an estate
Reasons to do the repairs:
To maximize your sales profit
To allow you to live in it first
To use it as a rental property
To bring in a higher return by using the property as a long-term investment
Whether you sell fast for cash or work with a top real estate agent to go through the traditional sales process is a very personal and individual decision. If you’re conflicted, consider connecting with a real estate consultant.
Are there other siblings or heirs included in the inheritance?
If more than one person has inherited the property, the proceeds from selling the house may need to be divided among them.
If the real estate is going through probate, understand the probate process and make sure you’ve spoken with your legal representative before starting the inherited house selling process.
Here’s a breakdown of the probate process in Virginia.
Should I rent out the inherited house?
If you’re asking if you should sell an inherited house, maybe you should also consider using it as an investment property. Renting out a house either as a yearly or short-term rental can be a great way to generate some passive income.
Renting out your inherited property could be a good choice if:
The house is located in a great area for real estate investing
You’re not ready to say goodbye to a family home
There’s potential to generate a solid rental property cash flow
The property is in rent-ready condition, or you’re willing to get it there
You’re interested in being a landlord or hiring a property manager
It aligns with your long-term goals
If you live in a top city to own a rental property like Virginia Beach, renting an inherited house could be a prime opportunity to generate some passive income. Consider if your area has high demand for rentals and opportunities for multiple investment strategies.
Who can help me navigate the inherited house-selling process and decisions?
Real estate is a hyper-local and fast-moving industry, so it’s crucial to get insights from a real estate professional you can trust when dealing with a huge asset like an inherited house.
A trustworthy local real estate agent is a great place to start. You can also trust a professional appraiser to help you determine your property’s worth – a big piece of the answer to “Should I sell my inherited house?”
With CGP, you get a top real estate sales agent in Virginia Beach that specializes in helping heirs determine what to do with inherited real estate. We also have a 48-hour cash offer program if you need to sell your house fast!
Step-by-Step Guide: How to Sell Inherited Property in Virginia Beach (and Beyond)
If you think you should sell your inherited real estate, let’s walk through the inherited house selling process step-by-step:
Get Legal Confirmation of the Details Consult your legal representative to confirm you can sell the property, find out if it is in probate, and determine if any other heirs have a say in selling the inherited house.
Determine the Inherited Property’s Stepped-Up Basis Hire a real estate appraiser to get a “date-of-death” appraisal to figure out the property’s value at the time of inheritance. It will help determine capital gains later on.
Settle the Property’s Finances Pay off any outstanding debts or liens on the property, such as property taxes, utility bills, or mortgage payments. Consider opening a bank account for the estate to manage shared assets and expenses.
Clean Out the House Remove personal belongings from the house. This might involve holding an estate sale, donating items, or hiring a junk removal service.
Decide to Sell Your Inherited House for Cash or to Make Repairs Selling an inherited house fast for cash could be the quickest way to sell the home. If you want to maximize your profits, you may opt for the lengthier traditional Virginia Beach home sales route.
Get a Pre-Listing Inspection Getting a home inspection is optional for sellers, but can help identify any issues with the inherited property that might affect the sale.
Make Upgrades This is totally optional if you’re getting a cash offer on your inherited home. But to increase marketability, even minor cosmetic improvements like fresh paint or landscaping can go a long way.
Price the Inherited Property Using a comparative market analysis or appraisal, set a realistic asking price for the property.
List the House Choose an experienced Virginia Beach real estate agent who knows how to manage inherited or probate properties.
Sell the Inherited House Review and negotiate offers on your inherited property as needed. If applicable, keep in mind the wishes of all heirs. Then, review and sign all the ownership transfer documents.
Address Tax Implications of Your Inherited House Calculate and pay any potential capital gains tax based on the stepped-up basis and final sales price. Consult a tax professional or financial advisor to see if you have any other tax obligations or potential exemptions.
The Bottom Line
Determining if you should sell an inherited house or keep it will look different to each heir. However, walking through each of these potential impacts of selling the home and getting a full view of the costs of inherited real estate will help you make the right choice for you.
Whether you choose to sell your inherited property for cash or sell with a top listing agent, going step-by-step through the inherited house selling process will help keep your responsibilities manageable and help you determine what’s best to do with your inheritance.