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8 min read Mar 16, 2024

Selling an Inherited Property in Illinois (2024 Updates)

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Jason Joshi

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Editor
Edited By

Jason Joshi

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Jason is a passionate content editor working at Houzeo. He has an eye for detail and keeps himself updated with the recent trends in the real estate market. He also likes to travel and explore places.

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Home sellers in Illinois spent an average of 10 to 15 months selling their inherited property.

Analyzing the current Illinois real estate market, the average time to sell a house in Illinois is 80 days. Factors like house location, home size, condition, etc. can increase your home’s days on the market.

For an inherited house, the probate process is necessary to legally transfer the property. It typically takes up to 11 months but can be delayed by multiple heirs and disagreements.

To Sell My Inherited House

  • How Long Does It Take to Sell? It takes an average time of 10 to 15 months to sell an inherited property, depending on the probate process.
  • Taxes to Sell an Inherited Property: You need to pay transfer tax, property tax, and capital gains tax to sell an inherited property.
  • Fastest Way to Sell: Selling to a cash buyer is the fastest way to sell your inherited property as is.

Can I Sell an Inherited House in Illinois?

Yes, you can sell your inherited house in Illinois. Your property must undergo a probate process before you sell it.

What Is a Probate Process?

A probate is a legal validation of a deceased person’s will. Probate helps to distribute the property amongst its heirs and beneficiaries.

You need to submit the owner’s death certificate and proof of ownership during the probate process. After the completion of probate, you have to pay for several expenses, such as outstanding mortgages, taxes on the property, and other bills.

An ‘Alienation Clause’ triggers when the ownership of a mortgaged property is transferred to an inheritor. So the inheritor has to pay off the full mortgage.

Almost every inherited property in Illinois must undergo a probate process. This can take up to 11 months. This period varies state-wise and depends on the number of inheritors and state laws.

Properties Exempted from Undergoing Probate Process

Your property will exempt a probate under the following conditions:

  • Illinois Transfer-on-Death Deeds: The owner can prepare a property deed to automatically transfer the property’s ownership. This deed prevents the property from going into probate.
  • Receive a House in Trust in Illinois: As a legal heir, you can inherit a house directly without probate if the owner has placed the home in trust.

How to Sell an Inherited House in Illinois?

Selling an inherited house is similar to selling any other property. The best option to sell your house for the most profit is either sell it through a real estate agent or sell it yourself.

1. Hire a Local Real Estate Agent

Real estate agents are well-versed in the market conditions. They market your property to buyers via MLS or other real estate networks to get you the most possible money for your property.

Moreover, agents can also advise you after you start receiving offers. But, agents do charge hefty commissions from 5% to 6%.

Top Real Estate Agents in Illinois

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2. Sell For Sale By Owner (FSBO)

You can save on hefty commissions by listing your house for sale by owner. But when selling FSBO, you need to handle the paperwork and closing yourself.

You have full control over your transaction to engage with the buyer and buyer’s agent. Moreover, IL For Sale By Owner sites help you get listed faster, typically within 24 to 48 hours.

Flat Fee MLS companies like Houzeo offer advanced technology to streamline your listing process. Houzeo’s mobile app helps you manage offers and showings at your fingertips.

Alternate Ways to Sell Your Inherited House in Illinois

You have other alternatives to sell your inherited home:

  1. List with a Discount Real Estate Broker: Illinois discount real estate brokers offer all the services that traditional Realtors do but at discounted rates. You can also opt for a flat rate Realtor to list your home.
  2. Sell Your Home to an iBuyer: An iBuyer can instantly make a cash offer and help you sell your house quickly. They make offers close to fair market value. However, iBuyers have strict purchase criteria.
  3. Sell Your House to Cash Buyers: Illinois cash companies can help you sell faster if you have a distressed property. However, cash home buyers typically offer 50% to 70% of the property’s fair market value.
  4. Sell Your House to a Flipper: You can sell your inherited property to professional house flippers in Illinois. They offer up to 70% of the fair market value.

Taxes on an Inherited Property in Illinois

The state of Illinois does not impose an inheritance tax. However, you must pay an estate tax of 0.8% – 16% if your property’s worth is more than $4 million.

Taxes on Selling an Inherited Property in Illinois

You have to pay the following taxes while selling an inherited property in Illinois.

  • Transfer Tax: Transfer tax is a one-time fee (generally less than 1%) that the inheritor pays at the time of transferring ownership. This tax is paid to the local government.
  • Property Tax: The average property tax in Illinois is 2.08% of the total sale price of the property.
  • Capital Gains Tax: The IRS (Internal Revenue Service) authority levies the capital gains tax on a stepped-up basis. So, this tax would only apply to the property’s appreciation after it was inherited.

» Capital Gains Exemptions: Know how you can exempt capital gains tax.

Selling a House in Illinois With Multiple Inheritors

Multiple inheritors can be close family members like siblings, cousins, or anyone the deceased person chooses. So, selling a house in Illinois with multiple inheritors is a real curve ball.

In such cases, the first step is to come to an agreement on selling or buying the property with the other inheritors. You can appoint a neutral party (non-beneficiary) as the head person for the sale.

The neutral party will ensure a transparent home sale process. Consequently, there will be a fair distribution of proceeds amongst the inheritors.

What if All Inheritors Don’t Agree to Sell?

If all inheritors do not agree then the property cannot be sold. Chill! If majority of the inheritors are willing to sell the property they need to go through a probate court.

The inheritors can file a ‘partition action’ lawsuit in probate court. In such cases, the court enforces the sale. As a result, the inheritors have to divide the proceeds among themselves as per the will.

Let’s Sell Your Inherited House

Selling your inherited house in Illinois is a complex and time-consuming process. Your inherited home might remain in probate for up to 11 months. You also have to pay several taxes while selling your inherited home.

To get the best price for your property, we recommend you list your home on Illinois MLS. This provides exposure to your property to buyers and real estate agents.

With an IL Flat Fee MLS company like Houzeo, you can list your property on the MLS right after the probate. An MLS listing via Houzeo will give your house maximum exposure, and you may even attract cash offers.

Lake CountySelling Inherited Property in Lake County, IL
ChicagoSelling Inherited Property in Chicago, IL
NapervilleSelling Inherited Property in Naperville, IL
SchaumburgSelling Inherited Property in Schaumburg, IL

» Selling an Inherited Property with a Mortgage: Learn what to consider and what not when selling an inherited property with a mortgage.

Eager to Know More About Houzeo?

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» Need More Clarity? Watch exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.

Frequently Asked Questions

Does Illinois have an inheritance tax?

No. The state of Illinois does not impose an inheritance tax when inheriting assets.

How do I avoid paying capital gains tax on inherited property in Illinois?

To avoid capital gains tax on real estate in Illinois, you have to reside in an inherited house for more than two years in the last five years.

Is there a time limit on selling inherited property in Illinois?

No, there is no time limit to sell an inherited property in Illinois. Once the probate process is completed and the legal inheritor is declared, you can sell your inherited property anytime.

Can you sell a house while in probate in Illinois?

Yes, only if there is a power of sale clause along with the will. Then you can sell the property without attaining an order from the probate court.

How to pay-off the mortgage on inherited property in Illinois?

You can pay the mortgage on an inherited asset in multiple ways:
1. You can sell the property and pay off the debt.
2. Transfer the mortgage along with the ownership of the house in your name.
3. An Illinois mortgage lender can foreclose the property if no inheritor pays the debt.

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