Inherited a House You Don't Want? Here's What to Do

Inheriting a house should feel like receiving valuable assets from a loved one. But for many heirs, inherited property becomes a burden rather than a gift.

Maybe the house is in another state. Maybe it needs extensive repairs you can't afford. Maybe it's filled with decades of belongings you don't know what to do with. Maybe you simply don't want to be a homeowner or deal with real estate.

This comprehensive guide explains exactly what to do when you inherit a house you don't want, your legal options, tax implications, and the fastest ways to convert unwanted property into cash without stress.

Understanding Inherited Property Basics

When someone dies and leaves you real estate, several things happen:

Probate Process

In most cases, inherited property must go through probate before you can sell it. Probate is the legal process where the court validates the will, pays debts, and distributes assets to heirs.

Probate timelines vary by state but typically take 6-18 months. In some states, the executor can sell property during probate with court approval. In others, property must transfer to heirs first before they can sell.

Title Transfer

The property doesn't automatically become yours when your relative dies. It must transfer through probate (if required) or through other legal processes depending on how the property was owned.

Mortgage Responsibility

If the deceased still owed money on the property, that debt doesn't disappear. The mortgage must continue being paid or the lender will foreclose. Heirs are not personally liable for the mortgage unless they specifically assume it, but failure to pay means losing the inherited property.

Property Tax Obligations

Property taxes continue accruing whether someone lives in the house or not. If these go unpaid, the county can eventually sell the property at a tax sale, wiping out your inheritance.

Ongoing Expenses

Insurance, utilities, maintenance, and other costs continue. Someone must pay these to maintain the property.

Your Options When You Inherit a House

You have several choices when you inherit property:

Option 1: Keep It and Live In It

If you like the property, location, and want to live there, you can move in after the title transfers.

Advantages

• You have a place to live
• No rent or new mortgage payment (if property is paid off)
• Property value may appreciate over time

Disadvantages

• You're responsible for all maintenance, repairs, taxes, insurance
• May require relocating to a different city or state
• Property might not suit your needs (too large, too small, wrong location)
• Might need extensive repairs or updates before it's livable

Option 2: Keep It as a Rental Property

Convert the inherited house into a rental property for income.

Advantages

• Generates monthly rental income
• Property may appreciate over time
• Tax benefits of rental property ownership

• Requires being a landlord (tenant management, repairs, emergencies)
• Upfront costs to make it rent-ready
• Vacancy periods with no income but ongoing expenses
• Particularly difficult if property is in another state
• Major repairs (roof, HVAC, foundation) can cost tens of thousands
• Problem tenants can be financially and emotionally exhausting
• Must pay property taxes, insurance, maintenance regardless of rental income

Option 3: Sell the Property

Most heirs who don't want inherited property choose to sell and convert it to cash.

This is where it gets complicated depending on your specific situation.

The Challenge: Property Condition and Location

Inherited houses often present challenges:

Properties in Poor Condition

Elderly relatives often defer maintenance. By the time you inherit, the house might need:

• Roof replacement ($10,000-$30,000)
• HVAC system ($5,000-$15,000)
• Foundation repairs ($5,000-$50,000+)
• Plumbing or electrical updates ($5,000-$20,000)
• General updating and repairs ($10,000-$50,000+)

Total repair costs can easily reach $50,000-$100,000+. Most heirs don't have this money or desire to invest it in inherited property.

Properties Filled With Belongings

Decades of accumulated possessions fill the house:

• Furniture throughout every room
• Clothing and personal items
• Papers and documents (important vs. junk)
• Collections and potentially valuable items
• General household items
• Garage/attic/basement filled with stored items

Sorting through everything, arranging estate sales, donating usable items, and disposing of junk takes weeks or months of exhausting work during an already emotional time.

Out-of-State Properties

If you inherited property in a different state:

• You can't easily visit to oversee work
• Finding trustworthy contractors from afar is difficult
• Managing estate settlement remotely is complicated
• Frequent travel is expensive and time-consuming
• Time zone differences complicate communication

Properties With Existing Mortgages

If the deceased still owed on the mortgage:

• Payments must continue or the property faces foreclosure
• You must decide to pay it off, assume payments, or sell quickly
• Outstanding balance might exceed current property value

Properties With Tax Liens

Sometimes you inherit years of unpaid property taxes:

• Interest and penalties compound the debt
• Tax liens take priority over almost all other debts
• County can sell the property if taxes remain unpaid
• Resolving tax liens requires paying off everything in full

Traditional Sale Challenges for Inherited Property

Selling inherited property through a real estate agent creates problems:

Must Clean Out the House First

Agents won't list a house filled with belongings. You must sort through everything, remove it all, clean the house, and often stage it with different furniture.

This takes weeks or months of work (or thousands paid to estate sale companies and junk removal services).

Must Make Repairs

To get decent offers, you typically need to address major issues. Buyers' home inspections will reveal problems, leading to either repair demands or reduced offers.

Investing $30,000-$50,000 in repairs on inherited property feels wrong when you just want to sell and move on.

Probate Delays

In many states, you can't even list the property until probate completes (6-18 months). Your inheritance sits empty, costing money in taxes and insurance while you wait for legal processes.

Long Timeline

Even after listing, traditional sales take 3-6 months. From the day you inherit to the day you receive proceeds could be 12-24 months.

Multiple Heirs Complicate Everything

If you inherited with siblings or cousins, everyone must agree on:

• Which agent to hire
• Listing price
• What repairs to make
• When to accept offers

Family disagreements during grief compound the stress.

Carrying Costs Accumulate

Every month the property sits empty, you pay:

• Property taxes
• Insurance
• Utilities
• Maintenance
• Potentially mortgage payments if one exists

These costs reach $500-$2,000+ monthly, eating into your inheritance.

The Better Option: Sell As-Is to a Direct Buyer

For most heirs who don't want inherited property, selling as-is to a direct buyer is the best solution:

How It Works

Contact a direct buyer who specializes in inherited properties. They evaluate the property in its current condition. They make a written offer to purchase as-is. If you accept, they handle everything and close quickly (typically 7-21 days).

Major Advantages

No Cleaning Required

Leave all the belongings, furniture, and possessions. Take what you want and leave everything else. The buyer handles clearing the house after closing.

This alone saves weeks of exhausting work and thousands in estate sale/junk removal costs.

No Repairs Needed

Sell in current condition regardless of needed repairs. The buyer factors repair costs into their offer and handles all work after closing.

Fast Closing

Close in 2-3 weeks instead of 6-18 months. Get your inheritance money quickly and move on.

Works During or After Probate

Many buyers can structure transactions that work before probate completes (with executor authority) or after (once property transfers to heirs).

Handles Mortgages

If there's an existing mortgage, buyers typically take it over through subject-to arrangements rather than requiring payoff at closing.

Resolves Tax Liens

Buyers pay off delinquent property taxes at closing, resolving liens you inherited.

Minimal Heir Coordination

With multiple heirs, there's one offer to review together and one decision. No months of coordinating on dozens of decisions.

Remote Transaction Possible

Complete everything remotely if the property is out-of-state. You never need to visit.

Fair Offers Based on As-Is Value

Yes, you receive less than if you invested $50,000 in repairs and waited 18 months for traditional sale. But when you factor in saved repair costs, avoided carrying costs, eliminated clean-out expenses, and value of your time and stress, the net difference is often small.

Tax Implications of Selling Inherited Property

Understanding tax consequences matters:

Step-Up in Basis

When you inherit property, you receive a "step-up in basis." The property's tax basis becomes its fair market value on the date of death, not what the deceased originally paid.

Example: Your parent bought the house for $80,000 in 1990. It's worth $250,000 when they die in 2024. Your basis is $250,000, not $80,000.

Capital Gains

When you sell, capital gains tax applies to the difference between sale price and your stepped-up basis.

Using the example above: If you sell for $250,000 and your basis is $250,000, you have $0 capital gain and owe $0 in federal capital gains tax.

Even if you sell for $260,000, you only have $10,000 in capital gains, owing perhaps $1,500-$2,000 in federal tax (depending on your tax bracket).

The Benefit of Quick Sale

Selling inherited property within a year or so of inheriting usually results in minimal or zero capital gains because sale prices are typically close to date-of-death values.

Always Consult a Tax Professional

Tax law is complex and individual situations vary. Consult a CPA or tax attorney about your specific circumstances.

Dealing With Multiple Heirs

When siblings or cousins inherit together, complications multiply:

Everyone Must Agree

All heirs must consent to the sale. One resistant heir can block the entire process.

Family Disagreements

Some want to sell immediately. Others want to keep the property. Some want to make repairs first. Others want to sell as-is.

These disagreements create tension and delay during an already emotional time after losing a loved one.

Financial Contribution Disputes

If repairs are needed, who pays? If property taxes are due, who covers them? Equal contribution sounds fair but some heirs might not have the money.

Geographic Distance

Heirs often live in different states, making coordination difficult.

Solution: Direct Sale Simplifies Everything

One offer. All heirs review it. Vote yes or no. If yes, title company distributes proceeds equally (or according to will specifications). Done.

No months of coordinating repairs, arguing about listing prices, or managing the property together.

Special Situations

Property Is Deeply Underwater

If the mortgage balance exceeds property value significantly, you might want to simply let it go to foreclosure. However, this wastes potential value and damages the deceased's final estate.

Better option: Some buyers will still take over the mortgage even if underwater, resolving the situation cleanly.

Property Has Environmental Issues

Mold, asbestos, lead paint, or other environmental problems make traditional sale nearly impossible. Direct buyers who specialize in problem properties can still help.

Property Is in a Trust

If the deceased placed property in a living trust, it might avoid probate entirely, allowing much faster sale. Consult with the trust attorney about proper procedures.

Estate Is Insolvent

If the deceased owed more than their assets were worth, creditors have claims on estate property. The executor must handle this properly, potentially selling property to satisfy debts.

Don't Let Inherited Property Become a Burden

Many heirs feel guilty about not keeping grandparents' or parents' homes. They feel they "should" keep the family house out of loyalty or sentiment.

But inheriting property doesn't obligate you to keep it, manage it, or sacrifice your own financial wellbeing for it. Your relative left you an asset, not a burden.

October 3, 2025