In the long run, inheriting a house is a good thing, but the first few months after inheriting one can feel like a second job. You have paperwork no one explains to you, bills for a house with no one living in it, and grieving relatives with a million and one opinions. The first 90 days are especially tough, and here’s how to think about that time.
Secure the Property
Before anyone talks about selling, make the property secure. Empty houses get broken into, and other problems can go unnoticed if a property sits unoccupied for too long. Keep the utilities on so the plumbing and electricity keep working. Tell the insurance company the house is vacant, as some policies change or lapse after a set period. Change the locks and tell the neighbors who is in charge now.
Find Out Who Can Act Legally
This is where most families get stuck. If a living trust was created, the named successor trustee can usually manage and sell the house without a court proceeding. If the house was in the deceased person’s name only, the estate may need to go through probate before anyone can legally sell it. If there is joint ownership with right of survivorship, the house generally passes to the surviving joint owner.
The details are state specific, so an early meeting with a probate or estate attorney is a good investment. Probate in California can take a year or more for a straightforward estate, so knowing the general time frame helps when planning the sale of a relative’s house. This guide on selling an inherited house in California explains how probate, trusts and court approval can affect the sale.
Keep Paying the Carrying Costs
A house can quickly become a financial drain. While the legal process is sorted out, the costs of carrying the property keep adding up: insurance, utilities, property taxes and any mortgage still owed, plus basic repairs and upkeep. Falling behind on these can lead to bigger problems. Decide early who is paying, and keep receipts, since these costs are usually reimbursed or settled among the heirs from the sale proceeds.
Get Everyone on the Same Page
When several heirs inherit a property, agreeing on next steps can be hard. One heir may want to keep the house, another may want to sell, renting it out is another option, and sometimes one heir wants to buy out the others. Make a clear case for each option, including the monthly carrying costs, the repairs the house needs and what it would rent for. Numbers tend to settle arguments faster than feelings do.
Understand the Tax Picture
Heirs often assume that selling an inherited house will bring a large tax bill. Usually that is not the case. Inherited property generally receives a “stepped-up” cost basis equal to its fair market value on the date of death, so if you sell soon after inheriting, the taxable gain may be small. A tax professional can confirm how this applies to you, especially if the house was held in a trust or the estate is large.
Decide How to Sell
Once someone has the authority to sell, there are a few options. Listing the house on the market usually brings the highest sale price, but an older house that has sat empty may need a lot of repairs and cleaning first. Selling as-is takes repairs off the table but usually means a lower price. Some heirs sell to a family member at a fair price. The best option is the one that leaves you the most after all costs are considered, including repairs, commissions, carrying costs and time.
Keep the Paperwork Organized
Create a folder for the important documents: the death certificate, the will or trust, letters from the court, insurance policies, utility bills and receipts for money spent on the house. Title companies and courts will ask for these, and having them organized can help the process move along more quickly.
Take Some Time
Most people who inherit a home are also grieving. Clearing out a family member’s house takes time, and having a plan for the property makes the process simpler. Taking time to grieve before making big decisions is a good idea; just make sure the house is secure and the bills are paid.
About the author: Victoria Sharma is the manager of Cash Home Buyers CA, a Woodland Hills company that works with families selling inherited homes across California.
