If you've inherited a house you'd rather not live in, here are some things to consider—before you accept it. Before we get to the selling or renting part, calculate the cost of:
Yes, you may decline your inheritance if it's too burdensome to accept, as long as you're not already named on the deed, and as long as you meet applicable deadlines for submitting a notarized disclaimer of interest form.
Now let's look at selling or renting.
1. Selling an Inherited Home Can Produce High Tax Savings.
The federal tax treatment of an inherited home, when sold, can be highly supportive of a deceased homeowner's loved one or family.
Under IRS stepped-up cost basis rules, you may sell without paying tax on the gains that accrued since the deceased homeowner first bought the house. You'll pay capital gains tax only on any increase in the property's value between the time you inherited and the time you sold. These savings alone can be a great gift to you.
Inheritance taxes are not a major factor for most homes, and that factor is easily checked.
2. Working Out a Shared Inheritance Commonly Means Selling.
Are you one of several beneficiaries? Does everyone agree on what to do? One sibling may wish to sell. Another might want the house. These factors typically mean someone will sell their inherited interest.
Selling after a loved one has passed away is quite often the best decision for all concerned. It relieves family or other loved ones of the costs of repairs and upkeep, utilities, taxes and insurance. It also ensures that everyone receives an equal share of the gift.
3. You Could Have a Choice of Which House to Sell or Rent.
If you inherit a free and clear title, you can move into your inherited home, and enjoy it without debt, while selling your current home. Be sure to use the time when the home is in probate to speak with your real estate agent about preparing the home for sale.
Renting out the house for investment income is another option. Your real estate agent can check for any zoning restrictions and offer you further pointers.
Tip: If you rent out the home it won't be a primary residence, so it won't get the capital gains tax benefit when you ultimately sell the home. Yet certain rental property spending is tax-deductible, and rent-related income has a low tax rate.
Need Advice to Fit Your Situation and Today's Market? We're Here to Help.
Inheriting real estate can put a lot on your plate. Your real estate agent can advise you step by step, offering indispensable knowledge when you need it most.
221 Walnut St, Holyoke, MA 01040
221 Walnut St, Holyoke, MA 01040
When you’ve gone through the lengthy and tiring process of seeking out, bidding on, and buying a new home and then sell your home, the last thing you want to worry about is cleaning your old house before you leave.
However, there’s multiple reasons you’ll want to ensure your old house is clean before you leave. First, as a common courtesy, you’ll want the new owners of your home to have a good first experience and to maintain your rapport with them after closing day. However, there are also legal and financial issues at play.
If your contract states that your home needs to have been “broom-swept” or some other form of cleaning before you leave, then your new owners could technically postpone closing. Furthermore, some states have laws requiring that homes are cleaned by their previous owners before they move out.
Although it can be difficult to define just how clean a home needs to be, legally speaking, your best option is to do your part to leave the home relatively clean, whether that means cleaning it yourself or hiring a cleaning company.
Legal reasons for cleaning your old house
As mentioned earlier, some states state cleaning requirements in the purchase contract when you sell your home. Their definitions of clean can often be vague, but usually include sweeping floors, wiping down surfaces, stripping nails and hangers from walls, and carrying out all furniture and garbage.
These rules are mostly designed to protect people who purchase a home from getting stuck with bulk items and other surprise issues that they’ll have to pay for.
An exception to this is when your home is sold “as is” or when you have some form of written agreement between you and the new owner that some part f your home will be left as is.
Cleaning your house
The ideal time to clean your house is once you’ve moved everything out. However, if you’re moving over a long distance, you might not be able to return to the house once it’s empty to give it a final cleaning.
In this case, your best option is to have your furniture and boxes packed away neatly in the garage, or in the corner of one room. Doing so will allow you to sweep, clean surfaces, wipe down cabinets, and so on, while your belongings are still in the house.
Just be sure to keep a broom handy once you’ve put everything on the moving truck so you can give one last sweep of the floor before you say goodbye to your old home.
It can be difficult to keep track of everything you’ll want to clean before you move out, so here’s a list to go by:
Sweep all floors
Vacuum all carpets
Wipe down cabinets, shelves
Try to sweep under appliances, oven, etc.
Spray sinks and tubs, leave air freshener in bathroom
Wipe inside of refrigerator, if applicable
Remove all nails from walls
Do a final walkthrough and remove any trash you’ve missed