By Rick Lewis | Illinois Managing Broker, Real Estate Investor & Founder of EZ Cash Homes
Inherited a House in Illinois? 7 Things to Know Before Selling
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Inherited a house in Illinois? Learn 7 important things about probate, liens, repairs, taxes, multiple heirs and selling an inherited property in Lake County.
Inheriting a house can feel like a gift and a responsibility at the same time.
Maybe the property needs repairs. Maybe there is still a mortgage. Maybe you inherited the house with siblings who do not agree about what to do. Maybe you live outside Illinois and have no idea where to start. Or maybe you simply do not want the responsibility of owning another property.
Whatever your situation, one of the most important things you can do is avoid rushing into a decision.
You may have more options than you realize.
As a licensed Illinois Managing Broker, real estate investor and cash home buyer, I look at these situations from more than one perspective. Sometimes listing an inherited house makes the most sense. Sometimes selling it as is makes more sense. Sometimes keeping the property may actually be the better decision.
Before deciding what to do with an inherited house in Illinois, here are seven important things to understand.
1. Confirm Who Actually Has the Authority to Sell the House
Being named in a will does not necessarily mean you can immediately put the property on the market.
The house may pass through a trust or other estate planning arrangement. Probate may be necessary. There may also be multiple heirs or beneficiaries involved.
Before spending money preparing the property for sale, determine who has the legal authority to make decisions regarding the house.
An Illinois probate or estate attorney and a title company can help determine what needs to happen before a sale can move forward.
This is especially important when several family members are involved or ownership of the property is unclear.
2. Check for a Mortgage, Liens or Other Debts
An inherited house is not necessarily a house that is completely paid off.
There could still be a mortgage on the property. There may be unpaid property taxes, judgments, contractor liens or other claims connected to the property.
The good news is that discovering a lien does not automatically mean the house cannot be sold.
Depending on the type of lien and the circumstances, some liens may be resolved as part of the closing process.
The important thing is knowing what is attached to the property and approximately how much is owed before assuming how much money will be left from the sale.
If a lien is part of your situation, read our EZ Cash Homes guide on selling a house with a lien in Illinois.
3. Decide Whether You Actually Want to Sell
Inheriting a house does not automatically mean you should sell it.
You may have several options.
You could potentially move into the property.
You could keep it.
You could rent it.
Or you could sell it.
If the property is in good condition and the numbers make sense, keeping it as a rental property could be worth considering.
But being a landlord also means dealing with tenants, maintenance, property taxes, insurance, repairs and possible vacancies.
If you already own a home, live outside Illinois or simply do not want another property to manage, selling may be the better option.
The right answer depends on your goals, the condition of the property and the financial numbers.
4. Do Not Start Renovating Before You Know the Numbers
This is one of the easiest ways to spend money unnecessarily.
You walk through the inherited house and immediately start making a list.
The kitchen needs updating.
The flooring looks old.
The bathroom needs work.
The walls need paint.
The roof may need replacing.
Before spending $10,000, $20,000 or considerably more, find out what the property may be worth in its current condition.
Then compare that with what the property could realistically sell for after repairs.
Sometimes strategic improvements can produce a good return.
Other times the additional selling price does not justify the cost, time and stress involved.
You should also consider property taxes, insurance, utilities, maintenance and other carrying costs while the work is being completed.
If the house needs substantial repairs, selling it as is may be a practical alternative.
Do the math before doing the work.
5. Talk With the Other Heirs Early
When several people inherit a property together, there can be several different opinions about what should happen next.
One person may want to sell.
Another may want to keep the house.
Someone may want to rent it.
Another family member may have an emotional attachment to a parent’s or grandparent’s home.
Those differences can quickly make an already difficult situation more complicated.
Try to discuss the important questions early.
Who wants to sell?
Who will take responsibility for the property while decisions are being made?
Who will pay the property taxes, utilities, insurance and maintenance?
What will happen to furniture and personal belongings?
How will major decisions be made?
Having these conversations before significant money or time is spent can prevent unnecessary problems later.
If family members cannot reach an agreement, consider speaking with an appropriate Illinois attorney before taking further action.
6. Understand the Tax Consequences Before Selling
Taxes are another reason not to rush into selling an inherited house.
Inherited real estate can receive different tax treatment from property you purchased yourself.
For federal income tax purposes, the basis of inherited property is generally related to its fair market value at the date of the previous owner’s death, although individual circumstances can affect how the rules apply.
That can make a significant difference when calculating a potential taxable gain after the property is sold.
There may also be other federal, Illinois or estate related tax considerations depending on the circumstances.
This is an area where speaking with a qualified CPA or tax professional before selling can be extremely valuable.
Do not make a major real estate decision based on assumptions about taxes.
Know the numbers first.
7. Choose the Selling Method That Fits Your Situation
Once you decide to sell an inherited house, there is still another important decision to make.
How should you sell it?
If the property is in good condition and you have time to prepare it for the market, listing the house traditionally may expose it to more buyers and potentially produce a higher selling price.
If the property needs significant repairs, is filled with belongings, has been vacant or you simply want a more convenient transaction, selling directly to a real estate investor or cash home buyer may be worth considering.
Neither option is automatically better.
The right decision depends on the condition of the property, your timeline, estimated net proceeds and what matters most to your family.
Do You Have to Clean Out an Inherited House Before Selling?
Not necessarily.
Many families assume they have to completely empty an inherited house before anyone will buy it.
That is not always the case.
If you plan to list traditionally, cleaning and preparing the property may help it show better to potential buyers.
If you are considering selling directly to an investor, you may be able to sell the house with unwanted furniture and belongings still inside.
Before renting a dumpster, hiring a cleanout company or spending several weekends emptying the property, find out what your selling options are.
You may not need to do as much as you think.
Can You Sell an Inherited House If You Live Outside Illinois?
In many situations, yes.
Living in another state does not necessarily mean you have to repeatedly travel to Illinois to sell an inherited property.
Depending on the transaction and the professionals involved, many documents, signatures and parts of the closing process may be handled remotely.
This can make a major difference when you inherit a house in Lake County but live hundreds or thousands of miles away.
Having knowledgeable local professionals involved can make managing the property and the sale considerably easier.
Should You List an Inherited House or Sell It As Is?
This is one of the biggest decisions inherited property owners face.
If the house is in good condition and you are not under significant time pressure, listing it on the open market may result in a higher selling price.
If the property needs major repairs, contains years of belongings, has been sitting vacant or you simply want to avoid renovations and repeated showings, selling as is may be the better fit.
Do not automatically choose the fastest option.
But do not automatically assume that listing will always leave you with more money either.
Compare the estimated selling price with the actual costs involved.
Consider repairs, commissions, closing costs, property taxes, insurance, utilities, maintenance and the amount of time you may continue carrying the property.
The number that matters most is not simply the selling price.
It is what you actually walk away with and what you have to go through to get there.
Thinking About Selling an Inherited House in Lake County, Illinois?
If you inherited a house in Waukegan, Zion, North Chicago, Beach Park, Gurnee, Winthrop Harbor, Lake Villa, Lindenhurst or another community in Lake County, Illinois, and you are unsure what to do next, you do not have to figure everything out by yourself.
As a licensed Illinois Managing Broker, real estate investor and cash home buyer, I can look at your property from more than one perspective.
Maybe listing the house puts more money in your pocket.
Maybe selling the property as is makes more sense.
Maybe a cash offer gives you the convenience and simplicity you need.
Or maybe keeping the property is actually the better financial decision.
That is one of the differences at EZ Cash Homes.
The goal is not to convince every homeowner to sell directly to us.
The goal is to help you understand the property, the numbers and your available options so you can make an informed decision for yourself and your family.
No pressure. No obligation. Just honest real estate advice.
Visit EZCashHomes.com to learn more or request a no obligation property evaluation.
Real Estate Rick
Licensed Illinois Managing Broker | Private Money Lender | REI Investor
224.214.2903 • EzCashHomes.com
13 N. Genesee St., Waukegan, IL 60085
