There’s only one thing more traumatic than selling the family house you’ve lived in for years: Selling the house of a recently deceased loved one.
All things being perfect, the former owner should have a will that states how the house should be disposed of. Beyond that, though, you and your siblings, other family members or friends are going to have to wing it. But either way, the sale will be fraught with emotion, if only because it’s like saying another goodbye.
Agent Maria Sapio of Berkshire Hathaway Homesale Realty in Carlisle, Pennsylvania, has a lot of empathy for people entrusted with selling a loved one’s house. She walked the same path in 2016 when her mother passed away. She’s also helping several clients go through the process right now.
Sapio’s best advice: Before putting the place on the market, hold a gathering at the house so extended family and close friends have the opportunity to join you as you sift through furniture, clothing and other household goods. “This,” she posted on the ActiveRain real estate chat room the other day, “helps to transform a challenging task into a celebratory event of reminiscing and sharing about special times and memories.”
Several years ago, Kathy Streib of Room Service Home Staging in Delray Beach, Florida, held such a get-together when a dear friend passed away. “It became a celebration of his life,” she says.
Once the gathering is over and your emotions subside, you’ll probably want to have an estate sale. And after that, it’s probably a good idea to clear the house of what’s left -- consider giving the remaining contents to charity -- so it can be cleaned thoroughly and possibly even painted so it shows fresh when you eventually put it on the market.
While you’re at it, take care of whatever repairs might be needed. Fix the dripping faucet, have the HVAC serviced and mend anything else that might turn off a prospective buyer. Also consider hiring a home inspector to go over the house so you’ll know if there is anything major that needs to be addressed. Your eventual buyer almost certainly will hire his or her own inspector, so it pays to know what to expect.
It helps if the deceased has named a favored agent in his or her will to sell the house. Jeffrey DiMuria of Waves Realty in Melbourne, Floria, says he’s been named “several times” in wills to handle a sale after someone has passed.
Absent that, you’ll have to find an agent on your own, and doing that takes some legwork. You’ll want someone who specializes in the hyper-local market, as well as one who is well-known in the area and is a sales leader.
But also consider agents who have experience dealing with situations such as yours. Pat Starnes of Front Gate Realty in Brandon, Mississippi, has assisted in several sales of a loved one’s home. “One of our privileges is to help” survivors and executors, says Starnes.
In looking at the house as something that must be liquidated, consider hiring an appraiser to come up with a fair market value. If there is a dispute among siblings, everyone should agree to hire his or her own appraiser and set the price somewhere in the middle of the various valuations.
Don’t set the asking price too far above the appraised value -- over-priced places don’t sell unless it’s a seller’s market -- and don’t haggle too hard with someone who makes you a reasonable offer. “Making an irrational counter-offer and not being willing to give an inch is what over-emotional sellers do,” Sidney Kutchuk of Realty Works in Temecula, California, warns. “This only drives well-intentioned and capable buyers away.”
Unless you intend to move into an inherited house, it pays to sell it as quickly as possible, if only because of the federal tax implications. Inherited properties don’t qualify for the sales tax exclusion, but you do gain ownership at a stepped-up tax basis -- the fair market value of the property -- at the time of the loved one’s passing.
That means you take over the house without having to pay any taxes to Uncle Sam. But for every day you own it after that, you’ll have to pay a tax on any increase in value until the house is sold.