Inheriting a house can be something you expect to happen but usually, it ends up being something that you might not have expected at the moment. While it might end up being a welcome addition to your real estate holdings, or even a new place to live, it’s likely that an inherited house can quickly become a financial burden or unwanted property just as quickly. Your specific situation will determine that.
You have options when it comes to deciding what to do after you inherit a house in Memphis. You can choose to live there. You can rent it out to make extra income. And you can decide to sell the inherited house. If you decide to sell the house, you’ve got an important choice to make. Will you sell it on the open market or you can sell it as-is to a cash home buyer like Fair Cash Deal?
Going the second route can be a great way to offload the burden of the inherited house quickly and put cash in your pocket. But if you want to try to sell the house on the open market, there are some very important things you need to know. Let’s take a closer look at what to do after you inherit a house in Memphis.
5 Steps: What To Do With An Inherited House In Memphis
Get to Know This House You Inherited
If you decide to sell the house you’ve inherited in Memphis, the first thing you need to understand is what it is worth. The quickest way to find out is to look at similar properties in the area that have sold recently, specifically noting the difference between the listing price and final sale price. Of course, you’ll have to account for differences based on condition and features, but it at least gives you a strong starting point.
Next, you need to understand the financial situation that the inherited house brings with it. Is there any outstanding mortgage debt and how much? Are there any liens or foreclosure issues attached to the house? Have property taxes been paid up to date or have they been piling up or unpaid since the previous owner passed away? Once you can answer these questions, you’ll have a good idea of the home’s actual value in the eyes of buyers.
Before you list this house, you must make sure you are clear on the legal ownership of the property. Are you the sole inheritor or did multiple people inherit it? If it was more than one person, is everyone in agreement that the house should be sold? If not, you may need to buy out or come to an agreement with one or some of the other inheritors in order to proceed. This could make for a very sticky situation and can even lead to arguments or bad blood, so be sure about what you’re getting into. Whatever the decision, make sure everything is documented and legally binding.
How Will This Inherited House Sale Impact You?
When you sell an inherited house in Memphis, there are financial implications you want to consider. The most important thing to know is that you may owe taxes on the proceeds of any inherited property sale. Every state has its own rules about inheritance tax and you need to know Tennessee’s. Regardless of the specific state rules, you’ll have to pay federal taxes on the sale, which will be determined by the value of the house. The higher the value, the higher your tax rate will be.
It’s important to know that inherited properties only qualify for tax exemptions if you live in it for two years. The good news is that you won’t pay capital gains tax on anything before the previous owner’s death. You are only responsible for as long as you’ve been the legal owner of the property.
When you do sell the house, it is vital that you report it to the IRS because, to them, an inherited home sale is taxable income. The exact tax number is based on the fair market value as well as any improvements that have been made to the house. And even if you don’t owe taxes, you’ll still want to report it to the IRS just to cover your bases.
Prep the Inherited House For Sale
Once the finances are sorted out you’ll need to prepare the house for sale. The first thing you’ll want to do is to get rid of any personal belongings left behind. If the previous owner was a hoarder, you’ll want to bring in a cleaning crew that understands exactly how to deal with that kind of specific situation. If that’s not the case, you’ll still need to do some decluttering. That means depersonalizing rooms, hiring a home stager, and bringing in a photographer to make the house look as good as it can. These will all cost money but that’s part of the process when selling on the open market and expecting a quick sale.
Personal items can make for difficult decisions. You should collect any mementos or valuable items immediately so that they’re safe and accounted for. Check with any relatives or friends to see what they might want and then decide what you’d like to do. After that, you’ll need to figure out what will be given away, what will be thrown away, and what will be sold. Consider holding a yard sale or estate sale to find motivated buyers for furniture and home items. The bonus of that is that proceeds can go towards taxes or other fees.
Price Your Inherited House Wisely
Pricing an inherited house in Memphis can be a tricky process. Price too high and you’ll scare off most buyers. Price too low and you’ll make people wonder what’s wrong. No matter what you list, you’re unlikely to get your asking price. Market conditions will dictate a lot but buyers are going to direct the final price based on the house’s condition, financial issues, and overall perception.
It’s up to you to know how much the house is worth so you know what your minimum acceptable offer is. Buyers will just keep trying to go lower so you need to know where you draw the line. Don’t let emotions or memories cloud your negotiations. Just because it’s an inherited house or you’re eager to sell, that doesn’t mean you don’t have leverage. And don’t undercut yourself just because the house has sentimental value.
While you’re trying to sell the inherited house, make sure you’re keeping up on the mortgage payments and utility payments. You don’t want to mess up the sale with some last-minute revelations.
Sell the Inherited House As-Is
As we’ve discussed, there are many financial issues that come with an inherited house in Memphis, not to mention all of the headaches and steps you need to deal with when selling on the open market. An alternative that will allow you to sell the house without dealing with all the hassles involved is to sell it as-is to a cash buyer like Fair Cash Deal.
All you need to do is contact us with details about your inherited house. We’ll assess the property and perhaps even take a tour. Then we’ll make you a fair offer and pay you in cash if you decide to take it. If you approve, you set the conditions of closing, often within a few days. You won’t need to make any repairs or clean up. You can walk away from the inherited house with cash in your hand. Then, you can move forward with your life and leave the rest to us.