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How to Sell an Inherited House in California without Hassle

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So, you inherited a house after the passing of a relative or loved one. If you’re not prepared to manage it, inheriting a house can lead to serious responsibilities that could cost you money and time.

Some people understand and are ok with their new obligations like determining tax liabilities, going through probate, preparing the listing, updating and staging the home, and negotiating on price.

For others, owning two properties is too much hassle, especially if you have or are considering downsizing your house to save money or simply don’t have the time.

If you’re asking yourself, “How do I sell my inherited home fast?” this comprehensive, step-by-step guidewill help you with everything you need to know about selling an inherited house in Southern California for the best possible price with the least amount of hassle.

Thinking about Selling Your Inherited Home?

Don't stress out. Get a copy of our FREE checklist for easy-to-follow tips & guidelines. Just drop in your email and get selling!

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Can you Sell an Inherited House?

Yes, you can! However, there are certain taxes on selling inherited houses in California, costs, and other conditions to meet.  

You’ll learn about these below. Or use the Table of contents above to Skip Around as you need. 

Otherwise, let's start with where you need to begin first with your Inherited Home:

1. Evaluate the Property's Costs

Before selling, you need to know if the property has any debts. You also want to know if the property needs repairs or expenses that could decrease its value.

The things you need to consider are:

Home Loans

Does the house have a mortgage or a home equity loan? (This will affect how much you make from the sale.)

Tax Liens

If the former owner owes property taxes or has other tax obligations, you’ll need to cover these costs as part of the sale – or pay out of pocket.

Property Damage

Significant property damage can make it hard to sell the house directly to another family. But you might be able to sell it as-is through a real estate agent or investor.

You can still sell your inherited house if the late owner owes money on it. You’ll just need to consider that in the asking price of the property.

2. Are You the "Legal Sale Executor"?

In the best-case scenario, your late relative appointed you as the executor in their Will. This means you’ll manage the estate until you meet all financial obligations and satisfy all taxes.

The Executor doesn’t have to be an heir of the deceased either. California gives you a lot of freedom when choosing an executor, which can be anyone who is:

If your relative doesn’t have a Will, the state will appoint an executor

Smaller cases – such as estates worth less than $150,000 – don’t have to go through the probate process (you can find out more about this process below). 

These use an informal representative rather than a court-appointed one. The state usually selects the surviving partner or any of their children as informal executors.

3.Going Through Probate

The probate process is a technical term for the legal process a property goes through when the owner passes away. California’s probate process manages key aspects of your late relative’s estate, like:

The Executor, manages the probate process with the court’s supervision. You’ll have to be patient though! This process can take anywhere from nine months to one and a half years.

Selling Your Inherited Home?

Don't stress out. Get a copy of our FREE checklist for easy-to-follow tips & guidelines. Just drop in your email and get selling!

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Should You Sell Your Inherited House or Rent it Out?

Inheriting a property expands your investment portfolio by giving you something of value to sell. However, maintaining that house can be a full-time job for some people. If that's not something you want to deal with, the choice is obvious.

If you don’t want to keep a house you’ve inherited, you have two options: sell or rent. Both have advantages and disadvantages.

1. Selling Your Inherited House

Selling an inherited house, especially if you’re selling the house “as is,” can be a quick transaction – you can receive an offer, close and be on with your life in as little as a week. Renting, on the other hand, is a long-term commitment.

Realistically, you may not see a profit for months.

2. Renting it out

Renting out your inherited property means two things:

If you choose to sell your house, however, you'll receive a lump sum at once.

IMPORTANT: Location, Location, Location!

Another thing to consider when choosing to sell or rent out your inherited house is your location. If you live close to the property, you might be able to manage it if you rent it out. 

However, if you live in another state or country, renting out can be frustrating because you’d have little oversight over the house – so, it might be best to sell. 

For example, we buy houses in Orange County frequently from out-of-state owners that are simply tired of owning out of state property.

What are the Taxes on Selling an Inherited House in California?

Luckily, the state of California doesn’t have estate taxes or inheritance taxes! This means you don’t have to pay taxes because you inherited a property. 

However, there are other taxes like:

    Capital Gains Tax

    This is a federal tax, and it’s not easy to get out of it. If you sell the house, you’d be responsible for any taxes on the “profit” – also called capital gains – you receive based on the value of the house when you inherited it.

    Property Taxes

    Your property tax is set at the county level, though there are guidelines from the California State Board of Equalization. You’re not responsible for any property taxes after selling, but you should expect the buyer to factor it in their buying decision.

    Tax Exclusions

    The government has a special tax rule for people who sell their houses. This rule allows you to sell a primary residence that you’ve lived in for the past two years to avoid paying the capital gains tax. While you won’t get this exclusion, you’ll benefit from the “stepped-up basis” (continue reading for more on this).

    Any taxes you don’t pay might result in a tax lien against the property, which can limit your options for selling an inherited house. However, the right real estate agent or investor can help you with that.

    Proposition 19 - What You NEED to Know

    Californians recently passed Proposition 19, limiting tax benefits for certain transfers of propertylike an inherited home or farm, between family members. It eliminates the exemption from property tax reassessment. 

    Instead, heirs who inherit their parents’ or grandparents’ properties who intend to sell them instead of using them as principal residences would pay taxes based on the market value when transferred. 

    If you don’t live in your inherited home or rent it outyou may lose out on a big tax break. So, instead of paying the taxes from when your parents bought in 1978, you’ll pay the taxes during the year it’s assessed for sale.  

    Proposition 19 also lets homeowners who are over 55, severely disabled, or whose homes were destroyed by a wildfire or natural disaster transfer their primary residence’s property tax base value to a replacement residence of any value, anywhere in the state.  

    You can read more about Proposition 19 here or again, talk to your real estate agent about any implications.

    Capital Gains Tax & Losses

    When you sell inherited property, you’ll either make a “capital gain” or a “capital loss.” If you receive a capital gain, you’ll owe taxes on this amount. If you take a capital loss, you might be able to write it off come tax time. 

    The formula for capital gains and losses is:

    Sale price – inherited property value = capital gain or capital loss

    For instance, if your relative bought the house for $125,000 in 1960, and the house is now worth $300,000 when they left it in their Will, you sell the house a year after you inherited it for $310,000, then you’ll only pay capital gains tax on the $10,000 you made between when you inherited the house and when you sold it. 

    If you sell the inherited house at a loss, you might be able to claim a capital loss. This might lower the tax implications of selling an inherited house. However, it’s better to talk to a tax advisor to make the most of your taxes.

    Can You Avoid Paying Capital Gains Tax?

    There are two types of capital gains taxesshort-term and long-term capital gains. Long-term gains have lower tax rates. While you can’t escape taxes, you can reduce what you might owe with these tips:

    Of course, if you plan to live in the house you inherited, you can avoid the capital gains tax by making the house your primary residence.

    Then you can sell it within five years and avoid the capital gains tax. Voila!

    'Stepped-Up' Basis & What it Means for You

    When the IRS needs to know how much tax to charge on an investment’s profits, they need a starting point for the cost.

    That’s the “basis,” or what you paid for the investment.

    You calculate capital gains on property on a “stepped up” basis, which means the starting point for your inherited house is when you inherited it rather than when your relatives purchased it.

    Remember the example earlier about your relative’s house?

    The “basis” is the $125,000 they originally paid for the house, but the “stepped-up basis” is the $300,000 property value when you inherited it.

    Instead of paying capital gains on $185,000 profit, you’ll pay it on the $10,000 profit.

    Hopefully this makes sense!

    Selling Your Inherited Home?

    Don't stress out. Get a copy of our FREE checklist for easy-to-follow tips & guidelines. Just drop in your email and get selling!

    What You Need to Do to Sell Your Inherited Home in California eBook

    You’ve Decided to Sell – Now What?

    Selling any property is a big decision. Especially a family heirloom, like your parents home or the one you grew up in. If you weren’t prepared for this, it can seem daunting and will be emotional. Fortunately, the process is easier than it sounds, especially if you work with the right real estate agents or investors.

    Preparing to List & Sell the House

    How you prepare your house to sell depends on your approach.

    If you plan to sell it directly to a home buyer rather than an investor, you’ll want the property in top condition. This can be expensive for some homes that require complete rehabs though.

    If you’re wondering, “Can I sell a home in need of repair?” the answer is yes, you can, so you’ll first need to check its structural integrity and internal living conditions, like:

    You'll also need to focus on its aesthetic appeal and functional convenience, and:

    You’ll also need to check appliances and deep clean each room. It’s a long and exhaustive list that can grow tedious fairly quickly.

    Should You Sell the House "As-Is"?

    Preparing to sell a house usually comes with at least a dozen chores, but you might be able to skirt them by selling it “as is.” That means you won’t have to invest time and energy in boosting the curb appeal, cleaning the property, or forking out thousands in major repairs! 

    If you don’t live close to the house you’ve inherited – or you just don’t want to deal with a lengthy sales process – you might find selling “as is” a convenient option. 

    “As is” conditions mean you can receive an offer without putting in the extra work to prepare for routine showings.

    In some cases, you can have an offer and close within a week. 

    This can also be a cost-saving option if the property has extensive damage which is fairly typical with inherited houses.

    Should You Renovate?

    House renovation projects have spawned an entire television network, and for good reason – these improvements can enhance the value of your property significantly. However, if you’re trying to sell an inherited house, you might want to think twice about doing major renovations.

    The Average Cost of a Remodel

    The average cost to renovate or remodel in Los Angeles, for instance, is between $100 and $400 per square foot.

    A modest 1,800 square foot home could cost at least $180,000. 

    If you inherited a house with no mortgage and have access to cash for these improvements, you can see a return on investment of almost 100% on some renovations. 

    However, if you don’t have the money to renovate the house – or you don’t have time to deal with renovating a house – it might be a good call to sell it as is. 

    Some might consider home improvement loans, but they just pile on your expenses.

    Clearing Out Personal Belongings

    Cleaning out a late loved one’s home can be challenging, especially if you were close.

    However, this experience gives you the chance to keep things with sentimental value. You’ll also be able to figure out what you need to sell or get rid of. 

    This can be a difficult experience for some people. Approach it delicately to avoid family conflicts.

    Maintaining the House

    Whether you’re trying to sell the property through a real estate agent or you want to sell it as is to an investor, you’ll still need to maintain the property until it’s sold. These are some of the important things you need to do during this period:

    If you’re showing the house, you might need to keep the utilities connected and play with some home staging ideas until you receive an offer. This is another aspect of maintenance – and an added cost – you need to consider.

    Pricing and Negotiation

    Unless you’re a realtor or real estate investor, you likely don’t know how to “price” your house. It can be even trickier when you’ve inherited property that you don’t spend a lot of time in. So what should you do?

    Determining a Reasonable Price

    The first thing you need to do is to get an estimate of your inherited house’s market value. You can get these estimates through several credible sources. These sources use information from public records and the current real estate market conditions. 

    The next thing you should do is review the asking price or similar houses in your area. Location is key here – the same houses in San Bernardino and Riverside will have different asking prices. 

    The last thing you can do is talk with a real estate agent or investor. The right partner can help with an asking price for the most offers.

    Negotiate Like a Pro

    There’s a reason most salespeople seem to have similar personalities – selling requires a delicate balance of giving just enough to encourage a buyer to buy from you and standing firm to avoid losing money. 

    While you might need to consider low offers, you should open with an asking price that gives you room to negotiate. 

    Price your inherited house based on the most recent market value estimates so you can confidently reject lowball offers. 

    Consider getting your inherited house professionally appraised if you want an accurate value of where to start.

    Selling your Inherited House in California

    Whether you market your home to an individual or a real estate investor, you’ll need to do certain things before you can formally sell your inherited house:

    Preparing for an Inspection

    While it varies from county to county, in Southern California your buyer has around two weeks to complete the property inspection once they enter into escrow. The buyer will pay for the inspection, but you’ll need to make sure the property is ready for inspection. 

    If you’re selling the house as is, the property inspection might be mild because you’re not doing any repairs. However, if you want the best offers and don’t want to sell it as is, you can schedule a property inspection to uncover damages that could reduce your house’s value and lower your offers.

    Settling Conflicts with Family

    When a family member passes, emotions in the family often run high. This can drive a wedge between families if the deceased didn’t will anything to a certain relative or if there is a lengthy battle overselling an inherited house. 

    Fortunately, these simple tips can help prevent conflicts:

    While there’s always room for conflict, you can reduce the emotional stress on your relatives by working with them to find the best solution for everyone.

    Hiring a Credible Agent or Investor

    Your real estate agent or investor is your partner in this process – that’s why you want one you can trust. Read reviews from people who’ve sold their homes through them so you can know their concerns (if any). 

    Then spend some time talking with each agent to see if you connect. You want to find out how well they understand the real estate market in your property’s location. You also want to get a feel of how they will interact with you.

    Selling Your Inherited Home?

    Don't stress out. Get a copy of our FREE checklist for easy-to-follow tips & guidelines. Just drop in your email and get selling!

    What You Need to Do to Sell Your Inherited Home in California eBook

    What to Expect After Selling

    Selling an inherited house is a lengthy process. It doesn’t end when you receive the cash either. That said, there are a couple of things you’ll need to do to wrap up the sale after accepting an offer.

    Settle Remaining Expenses

    The sale of your inherited house should cover any outstanding mortgages or home equity loans. 

    It’ll also take care of any outstanding tax liabilities on the house. Besides these, there might still be expenses you’ll have to pay for, like opening utility accounts or commissions to the real estate agent if you go that route. 

    You’ll need to settle these as soon as possible to prevent issues for the new owners or the real estate investor.

    Report Your Profits to the IRS

    The last thing you need to do to “close out” the sale process is to report your profits. This is where you’ll report the capital gains or capital losses we spoke of earlier from the sale of your inherited house. After filing this information on your taxes, you’ve officially sold your inherited house!

    Final tips for Selling an Inherited House

    It can be overwhelming to sell an inherited house. This is either because it takes time to sell it or the emotional weight of losing a relative – or both. You can make the process less difficult with these key tips:

    With the right real estate team, you’ll have the needed tools and resources to get the best offer for your inherited house. 

    Do you need to sell an inherited house quickly in Southern California? SoCal Home Buyers can put cash in your hands in as little as seven days! 

    If the property you inherited is in need of a lot of work, or is out of state give us a call and let's talk! We'd love to see if we can help out your situation.

    Or, watch the short video below to learn more about us.

    We buy houses from homeowners that need to sell inherited property in Los AngelesRiversideSan BernardinoSan Diego, and Orange County. You can either fill out our online form below or give us a call at: 951-331-3844 to find out how we can help you with selling your inherited house today!

    Reviews from Happy Sellers
    Trying to sell a house is a daunting task, ask anyone who's done it. The cleaning, the repairs, the showings, etc. It's especially difficult when the property you have doesn't reside in the same state you live in. After some extensive research I went with SoCal Home Byers. Not only did they provide a fair price but they made the process very easy. All I had to do was sign a few documents, get them notarized and send them back in. Closing was done before I knew it and funds were wired to my account. When you consider the money you'd have to spend to get your house sellable and factor in realtor fees and closing costs, you'd be surprised how close your net profit is when compared to a higher sale price through a realtor. This is the way to go!
    Steve Velazquez
    Steve Velazquez
    23:28 18 Sep 21
    Angel,Doug,Cindy were absolutely fantasist. Made averthing so easy.Now low ball.Simply the best. Easily the best company to work with,so accommodating..As a Canadian was beside myself with their help.You will be so happy to deal with them.Forget anyone else.THE BEST.you will be thrilled with their actual caring..
    Roger Allard
    Roger Allard
    21:21 28 Aug 21
    What I love about SoCal home buyers is how prompt they came out and gave me a price on my father's house when he passed away. They did what they said and they said what they did. All the way through the process I knew what was going on and it went smoothly!
    Chris Alvarez
    Chris Alvarez
    23:52 25 Aug 21
    Had a great experience with SoCal home buyers. Was a fast and painless process and the offer was pretty good. Definitely worth selling to them over listing with an agent. Highly recommend👍🏻
    Grant Seitrich
    Grant Seitrich
    00:57 21 Aug 21
    Highly recommend SoCal Home Buyers if you need to quickly sell your home. We were in a difficult situation with a tenant in a rental who would not move so we could renovate and sell the home, due to eviction moratorium we could not evict. SoCal Home Buyers were amazing to work with, we got an acceptable price and quickly closed the deal with no issues. No brokers or other fees, give them a call if you need a non-traditional way to sell a home.
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    Denise Gibson
    18:30 28 May 21
    Honest company, doing business with them it was like a melody ! Everything went smooth. done by Text and email. I honestly never spoke to them by phone .but that's just me being a Guru and always trying to make the most of time. Thanks guys!!
    Paco's Drywall
    Paco's Drywall
    21:34 05 Feb 21
    I had the pleasure of working with SoCall Buyers, selling a rental home in the Los Angeles area, while living out of state. Appointments were always kept, I was always informed and kept up to date of any activity. I would definitely use this company again .
    linda shreve
    linda shreve
    21:42 02 Feb 21
    Terrific experience working with SoCal Home Buyers. From the first conversation, they were very responsive, easy to get a hold of on the phone or email, and very quick to answer any and all questions and taking the time to ensure we were comfortable the home sale. SoCal was transparent about the entire process and helped guide us step by step, which made the entire transaction very easy and comfortable. Would certainly recommend and use again in the future!
    Andrew Everson
    Andrew Everson
    21:27 20 Dec 20
    The team at SoCal Home Buyers is professional and caring. From my first interaction with Angel, and then Gavino, Cyndi, and finally, Doug, everyone answered questions and responded to emails and calls in a timely fashion. They made the selling process straight forward and effortless. I was concerned about selling to a "home buyer," but every promise was fulfilled from a 30-day escrow, an "as is sale" with no clean-up or haul-away, and finally, an agreed upon price. I will not hesitate to recommend them to family and friends.
    Terri Gutierrez
    Terri Gutierrez
    19:59 19 Dec 20
    Everyone was very knowledgeable and straightforward! No games and no stress!!!!
    Christy Jean
    Christy Jean
    13:01 15 Aug 20
    Dealing with everyone who worked with SoCal Home Buyers was such a pleasure. They walked me through the process from start to finish and were so personable and professional. I would highly recommend them to anyone who wants to sell their home fast and at a fair price. They are also willing to work with you on any concerns or problems that might arise. Great experience!
    Lisa Engelhorn
    Lisa Engelhorn
    04:09 15 Aug 20
    Working with SoCal Home Buyers was seamless and stress free. I was able to sell my home in 30 days while living out of state. All monies were received as promised and the house was sold as is including furniture. The furniture wasn't needed and was causing a lot of unnecessary stress for me being that I lived out of state. SoCal Home Buyers has a great team and I would highly recommend.
    Steve Transue
    Steve Transue
    16:28 14 Aug 20
    I had excellent experience with this company. Was selling a condo during this Covid time. They were very responsive, timely, and I closed in less than 30 days. I would highly recommend them.
    Terry Knott
    Terry Knott
    16:43 22 May 20
    I contacted SoCal Home Buyers, when my tenant gave me unexpected 30 day notice. We were planning to sell our home but not that quick. We knew that our home needed a lot of work and at this time we didn’t have the money nor the time to repair it for new buyer to take it off our hands and on time. We didn’t want to be stuck with another mortgage. I did my research on an investor and found SoCal Home Buyers which were highly rated. As soon as I contact them, they were friendly and quick. Lisa answered all my questions and stuck with us until the end. They offered to close escrow in 7 days but I needed 30days to at least let my tenant move out. They worked with me and made this process easy. We live in Arizona, so it was nicer that they accommodated us in every aspect to not drive to California to during this process. We appreciate everything they did. I would highly recommend them any day! Thank you!
    Dollish Beauty
    Dollish Beauty
    14:44 13 May 20
    I had the responsibility to sell my sister's home when she moved into a care facility. The home was a real mess as my sister never had any cleaning or yard work done in the past 10-15 years along with having a lot of junk she had collected. I called SoCal Home Buyers, on December 12, to talk about the sale process and to get an offer from them to buy the property as my sister needed it sold quickly. I spoke with Lisa who gave me the information I needed and set up an appointment for December 14. The employee, Gabino, met me at the home, asked some questions and did a walk through of the home. When he finished he told me that he could give me a written offer in 10 minutes and went to his car to process it. The offer was fair and I asked for a month to finalize the sale, I think it could have been done in 2 weeks. Cyndi, the transaction coordinator, contacted me a few days later and explained the sale and closing process. She was frequently in contact with me regarding the paperwork and closing. The sale closed on time. I am very satisfied with SoCal Home Buyers. They were a pleasure to work with and I would recommend their services to anyone. Karl Gerlach
    Karl Gerlach
    Karl Gerlach
    01:54 28 Jan 20
    The transaction was smooth especially considering it was complicated by more than usual paperwork from the county. I was kept appraised of the progress. The SoCal team was responsive and understood my timeframe.
    Corrlyn McGiverm
    Corrlyn McGiverm
    22:46 13 Jan 20
    I just want to thank SoCal Home Buyers for being so pleasant, efficient, and kind. From the first email and conversation with Angel, to the meeting with Gavino, the texts and emails from Cyndi, the patience and amazingly fast response time from Jenny in escrow until the final meeting with Doug went so smoothly and everyone was so nice and professional and trust worthy. Everyone was patient and kind during a very stressful time for me. Every step of the way was seem less. I had very little time to sell my Mom’s home after she passed away and the whole crew made the experience pleasant when I was a ball of nerves. Thank you so much and I would definitely recommend your company and services to my family and friends.
    Elisa Congiardo
    Elisa Congiardo
    02:21 03 Jan 20
    Doug and his team at SoCal Home Buyers were beyond fantastic. We were selling from out of state, and they made everything extremely easy. They were always there with ready answers and solutions for any issues that arose. It was the smoothest selling process we've ever had, and they really helped us with what could've been a difficult transaction. We highly recommend them.
    Brian Dalessi
    Brian Dalessi
    18:03 02 Dec 19
    Great people very fast payment would use again.
    Ali Zahedi
    Ali Zahedi
    10:44 08 Oct 19
    The team at SoCal Home buyers are ethical, kind and professional people. I was going through a difficult situation while trying to sell my parents house. The team treated me with dignity, and respect and communicated with me at least once per week. The escrow company walked me through the process and answered all questions. Working with SoCal and the escrow company was very easy, during a difficult situation. Thank you SoCal Home Buyers!
    Bridget Thurman
    Bridget Thurman
    22:42 26 Sep 19
    This organization is run by a wonderful group of people who are easy to work with and have excellent communication skills. Looking forward to working with you again in the near future!
    Steve Doan
    Steve Doan
    16:51 16 Aug 19
    The team members at So Cal Home Buyers were friendly, courteous, and very professional. I was very hesitant to sell my home, but felt very comfortable with this company’s honesty and business ethics. The team members made the process of selling my home comfortable to fit my needs and timeline. I would strongly encourage anyone looking to sell their home to contact So Cal Home Buyers first before signing a contract with any other agency.
    Barbara Jones
    Barbara Jones
    20:49 09 Jul 19
    At one of the most stressful moments in my life, I was quite fortunate to have SoCal Home Buyers by my side. The family owned business was understanding, ethical, and professional in handling the sale of my parent’s home. Doug and his lovely wife offered support in all aspects including providing an excellent escrow company which always answered my quite numerous questions. I feel very blessed to have had SoCal by my side!
    Michele Goddard
    Michele Goddard
    03:28 06 Jun 19
    Doug & his team provide a great service. Highly recommended!!
    Andrew M
    Andrew M
    16:56 07 Apr 19
    SoCal Homebuyers are great! They were professional and friendly to work with on a complicated property. The staff is excellent. Especially Danielle Lane, shes knowledgeable and patiently explained every detail in the process. Thank you SoCal Homebuyers, from the beginning to the end you were excellent.
    mike estus
    mike estus
    19:03 28 Nov 18
    I will definitely refer my clients to them!
    Rasheena mccord
    Rasheena mccord
    17:40 19 Jan 16
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