Inheriting any type of asset comes with a handful of accountabilities. Especially, when you inherit a house you need to keep a lot of patience till your deal is finalized.
Every state and county has its own Inheritance law to be followed. Similarly, Selling an inherited property in Chicago has its own set of procedures. Find out the detailed points to consider while selling your Chicago inherited house.
Things to Consider While Selling an Inherited Property in Chicago
After the demise of the property owner, you need to decide whether you want to transfer the ownership to yourself and continue staying there or you want to sell off the inherited property in Chicago.
An inherited property in Chicago can be transferred to a new owner in 3-4 months. As against selling, which usually takes about 15-24 months. Also, you would save 6% on real estate commission. So, transferring ownership is not only relatively faster but also cost-effective.
However, if you still wish to sell your inherited Chicago home, here are the things you must do:
1. Know the Probate Process in Chicago
The probate process includes evaluating and pricing the assets left behind. Apart it also includes paying off the taxes & bills until the rights are not transferred to you. Probate court takes about 10-15 months to validate the owner’s will or even more depending on the number of inheritors and the state laws.
As the inheritor of the property, file the petition at the probate court with the death certificate of the owner. And if there is no legal will made by the deceased owner, you can request the court to appoint an administrator to supervise the property.
2. Understand Mortgage Debts on Inheriting Assets
If the owner has prepared a legal will then, generally it contains the name of the inheritor. In case the owner does not have a will, all the assets may be passed on to the co-owner of the house or the nearest blood relative.
As an inheritor, you can transfer the mortgage ownership to yourself as per the Chicago real estate transfer laws. Or you can also sell the assets to pay off the outstanding dues.
If the owner does not have a will, then the executor dissolves all their assets to pay the owner’s debt. Or ask the mortgage lender to foreclose the property to recover their dues.
3. Learn About the Capital Gain Taxes in Chicago
You pay Capital Gain Taxes while selling property only and not while inheriting it. Capital Gains Taxes are levied on a stepped-up basis by the IRS (Internal Revenue Service) authority. The stepped-up basis means calculating the difference between the property market value and the sale price.
🧩 Case 1: Say suppose, the owner originally purchased a house in Chicago at $250,000. At the time of the owner’s death, the market value of that house increased to $300,000. In this case, if you sell the property at the same market value then you pay $0 against the capital gain tax.
🧩 Case 2: The owner originally purchased a house at $250,000. At the time of the owner’s death, the market value of that house increased to $300,000. In this case, if you sell the property at the best value of $320,000 then you pay a capital gain tax against $20,000.
As per Chicago real estate laws, there is no estate tax or inheritance tax applicable. And you are not liable for any capital gain taxes on an inherited property.
4. Make Minor Repairs, if You Can
Whether or not to renovate the inherited house is a big question for the heirs. It is recommended to make minor repairs like fixing the roof, rewiring electrical systems, etc. before selling the house.
Fixing minor issues in the house will help you attract more competitive offers from home buyers. Your inherited property might even qualify for iBuyers, who usually have strict purchase criteria and offer up to 100% of the market value in cash.
Chicago Inheritance Laws
Chicago is one of the cities in Illinois that does not impose inheritance but does levy estate taxes. The inheritance law in Chicago is more or less the same as the Illinois inheritance law. As per the inheritance law in Illinois, if the owner:
I. Has Made a Will: If the owner has made a will mentioning the name of the heirs then the process is simple. The court just has to verify the genuineness of the existing will, evaluate the value of the assets, and later declare the legal heir of the property. The entire succession process takes 12-15 months to complete.
II. Has Not Made a Will: In this case, the court would take about 20-24 months to declare the legal inheritor of the property. Here, the immediate representative needs to file a petition in the probate court to evaluate the assets and then distribute it among the heir(s).
Steps to Sell an Inherited Property in Chicago
Here are the key steps involved in selling an inherited property in Chicago.
Step 1: Know Where the Mortgage Stands
It is primarily important to understand the details of the mortgage on the inherited property like missed payments, unpaid tax, or any. As neglecting the details of the mortgage debt might disturb your credit score.
Understanding the terms will help you take further decisions on whether to sell the property to iBuyer or against cash in order to pay off the dues.
Step 2: Hire a Mediator
If the owner has a will then it comes easier to take any decision related to the inherited property. Whereas if there is no will and there are multiple heirs then it is quite possible to end up the discussion with an argument regarding the inherited assets.
Hence, you would need a mediator who would act as an unbiased party while dealing with the asset assessment and distribution. You can approach the legal court and request a legal mediator.
Step 3: Conduct a Pre-listing Inspection
To ensure you do not get slapped by the state seller disclosure laws, get a home inspection done before listing. Hire a professional home inspector to determine the unknown defects present in your house. Put the identified defects in the seller disclosures.
Step 4: Make Repairs
No one would pay higher for a distressed property. If the house is too old and has loose untamed wires or some ripped carpet then the chances of selling the inherited house decrease. On the other hand, if you renovate the complete house over budget still won’t get you a good deal as you may land up making higher expenses and still sell it at the market value only.
Hence, only the necessary work should be done in order to get a top-dollar deal.
What Not to Fix When Selling a House?
Here are the following things home sellers need not do when selling their houses:
- Don’t do a Major Renovation: Most big home upgrades do not offer much return on investment. For instance, only 59% of the value could be recovered from a complete kitchen renovation worth $68,000.
- Do Not Make Partial Upgrades: Unfinished upgrades make it difficult for potential buyers to visualize their future in the house. It is best to not start an upgrade project if you won’t be able to finish it.
Step 5: Get Your Home Ready to Sell
Preparing your house for showings is the best way to increase the chances of selling it fast. Some standard preparation pointers can be taken care of while selling your home. These are:
- Declutter & Depersonalize: Tidy up your place and remove the element of personalization. This means removing personalized items such as photos. It will allow potential buyers to visualize their future in the house.
- Make Repairs: If there’s anything glaringly wrong, take care of it early. For instance, a squeaky doorknob will not be overlooked by potential buyers. It is best to get such defects fixed.
- Repaint Neutral: Paint your house in neutral colors, as it appeals to a larger pool of people. This will help in attracting more buyers.
- Improve Curb Appeal: Go for clear landscapes, fresh flowers, or exquisite paintings because the first impression is everything!
- Implement Staging: The best way to sell a property is by hiring a staging professional. They would be able to utilize the spaces and furniture cleanly and attractively.
There can also be state-specific scenarios (HVAC systems, smoking detectors, fire hazard control, etc.) that you need to into consideration while preparing your house for sale.
Step 6: Decide How to Sell Your Inherited House in Chicago
You have several options to sell your house. You can choose to sell with a traditional real estate agent, or you may sell it FSBO.
If your house is in an extremely torn-down condition we recommend you selling as is. Offer your home to cash buyers who offer 50%-70% of the fair market value.
Step 7: Negotiate Offers
Though you are selling an inherited home, the basics of what to do when you get offers remain the same. This includes – accepting, declining, or ignoring the offers (not recommended).
We suggest reviewing all offers on all their merits, and never ignoring one. Even if it’s a lowball offer, you should counter with what you would accept. Where you are sure you don’t want to counter or accept, just politely decline.
Countering an offer, or calling for the highest & best offer are 2 advanced tactics in every real estate agent’s arsenal. If you are selling your inherited home without an agent, learn these 2 tactics.
Most companies will give you complex forms to counter an offer, or to request the highest & best. Houzeo has digitized these features. So, you can counter or ask for the highest & best offers with just a few clicks! That’s selling a house made easy.
Step 8: Close on Your Inherited Property
Closing or the settlement process in every state is handled by a settlement agent – an attorney, an escrow, or a title company.
Even though you will have your closing agents, you have to take care of a few things while selling your inherited home. This includes:
A clear title and a meticulous transfer are key to a real estate transaction. Title insurance protects you if there is any problem related to the prior ownership of the property. It makes you whole in case of a legal dispute related to the title.
An inspector inspects the property before the home-buying process is completed.
They check for any defects/repairs in the property and raise concerns accordingly. This ensures that the buyers don’t have to shell out money in case there are defects in the property which the seller did not highlight.
The average cost of a home inspection in the US is $340.
An appraisal officer does market research and evaluates the price of a specific property. The appraisal manager ensures that a correct price is offered by the seller and as per the market value.
The average home appraisal cost in the US ranges from $375 – $450.
» How to Prepare for Home Appraisal: A Comprehensive Guide To Manage Home Appraisal
Step 9: Paperwork For Selling an Inherited House
Documents needed to sell your home can be categorized into three:
- Seller Disclosures: They are a standard checklist for disclosing a property’s condition. Every state has its respective real estate laws and prescribed disclosures. Check out our state-related seller’s disclosure blogs to know about your disclosure requirements.
- Inspection Paperwork: An inspector inspects the property before the completion of the buying process. They check for any defects/repairs in the property and raise concerns. This ensures buyers don’t shell out money for defects sellers did not highlight.
- Appraisal Paperwork: A licensed appraiser appraises a home. Be prepared to contest an appraisal in case of low appraisals. Contesting appraisals is much easier than most sellers think. Find similar properties sold in the past 90 days, and arrive at their per-square-foot price. Based on the data calculate your home’s price.
- Closing Paperwork: You sign these documents during the closing process. They vary from state to state. Closing paperwork generally includes loan payoff, HOA documents, proof of repairs, home warranty, etc.
An important factor that can impact the transaction process is the overall costs of the deal.
The transaction is not only about agent commission and sale price, but also includes other costs. These costs vary across states. They mainly include Realtor commission, transfer tax, real estate attorney fee, title insurance, capital gains tax, etc.
» Closing Cost Calculator: Calculate Closing Costs Accurately with Houzeo
Best Ways for Selling an Inherited Property in Chicago
As discussed earlier that after the owner’s death the property has to go through the probate process that takes somewhere between 15-20 months. Meanwhile, you can decide the way you want to sell the house.
1. Sell with a Flat Fee MLS Company:
The average Realtor commission of 6% makes selling a costly affair for the homeowners. Though this percentage varies state-wise, it still lingers around 5%-6% on average, which is significant. This is where Flat Fee MLS companies are gaining popularity.
👍 Benefits of using a Flat Fee Listing Services:
- Save Thousands in Commission: Instead of paying a 2.5% to 3% listing agent commission, you just pay a $349 listing fee.
- Maximum Exposure: You get full exposure to the MLS, Zillow, Realtor.com, Redfin, and hundreds of other websites.
- Help When You Need It: Services like Houzeo.com offer the “Contract to Close Coaching Package”. So if you need help during the transaction at any time, a licensed broker is there to help you sell!
- Full Control Over Your Sale: You retain full control over when to sell and whom to sell. Houzeo captures all leads and displays them on your dashboard. All offers and showings are summarized online, along with the buyer’s or their agent’s contact info. It doesn’t get easier.
- Fast Listing & Changes: Houzeo is 100% online, and allows you to request changes instantly. Contracts are auto-generated, and turn-around times are fast!
- A-la-carte Options: Need a yard sign, Showing Time, lockbox? You can purchase them easily from your Houzeo dashboard!
👎 Key Downsides of using a Flat Fee Listing Services:
- Additional expense: With MLS you get access to all the processes of the real estate transaction like listing your property, getting your property on board with all paperwork, etc, but the additional services accrue minimum payments like house photography, home inspection, and more.
- Limited traditional approach: The flat fee MLS would ignore the traditional approach in dealing with the Real Estate transaction.
» Flat Fee MLS Companies in Chicago: Find out the details on the companies providing the Lowest Flat fee.
BEST FLAT FEE MLS LISTING SERVICE
Why It’s The Best: Houzeo has thousands of 5-star reviews. It offers the best combination of maximum savings, advanced technology, 5-star customer support, and listing exposure.
Packages: Houzeo offers 4 flat fee MLS listing packages.
- Bronze is $299 and is best for selling a lot.
- Silver is $349, and includes everything competitors like FSBO.com charge $399 for.
- Gold is $399. It is Houzeo’s signature package and includes all the technology Houzeo is known for Houzeo Showings, Houzeo Offers, and Digital Transaction Management.
- Platinum is $449+. It includes the assistance of a licensed broker to help you with negotiations, disclosures, and closing.
👉 Our Take: We recommend the GOLD plan. You’ll have all the access to Houzeo tech, making managing showings and offer negotiations easy!
» Houzeo Reviews: Houzeo is 100% online. You can finish the listing formalities in less than 60 mins.
- Quick listing
- Near nationwide coverage
- Mobile app availability
- Savings on commissions
- 5- star customer support
- 100% online – easy listing, fast changes, online showings, and online offers
- Listings get syndicated to Zillow, Realtor.com, Trulia, Redfin, and 100s of other sites
Houzeo has a 4.9 out of 5 rating on Google & Trustpilot.
Houzeo is available in 47 states and the District of Columbia.
» NEED MORE CLARITY? Watch exclusive Houzeo reviews and learn why the platform is the best in America’s competitive housing market.
Real People, Real Stories
Start Your FREE Listing NOW!
2. Sell Your Inherited House for Cash:
Being the new inherited owner of the property you can sell the house for cash, if you found the mortgage loan amount to be higher or any pending tax to be paid which you pay off and get burden free. you can also skip the heavy repair cost of the house and the capital gain taxes.
Selling the house for cash can help you close the sale deal within 10-15days with minimum or no repair needed.
👍 Benefits of Selling a House for Cash:
- No need for repairs: The house sold in cash is usually for quick cash where time is a constraint & want to sell the house at the earliest. Here the seller can remove the necessary cost & time investment required for the repairs.
- Quicker sale process: It is a quick process with less paperwork needed.
- Saves on real estate fees: The house to be sold fast does not involve the agent where the real estate fees can be saved.
- Offer more certainty or avoid bad surprises: Buying and selling the house for cash is assumed to happen with minimum house maintenance & fewer paper works. Hence, the scene of being cheated does not exist.
👎 Key Downsides of Selling a House For Cash:
- Possibility of being scammed: Although knowing the house is being sold on urgency but there might be a possibility of being scammed with regards to the property’s geographical location, unpaid taxes, or so on.
- A lower value for the property: Considering the urgency, the seller might have to sell the property at a much lower market rate.
» We Buy Houses For Cash in Illinois: Click the link to know which companies in the whole of Illinois would give you a good cash deal on selling a Chicago inherited house.
3. Selling an Inherited Property in Chicago by FSBO:
If you are ready to invest your time and money in order to get the best competitive market deal then you can surely opt for the FSBO method. For Sale By Owner (FSBO) is a DIY method of selling a property without any third-party help. This means that there is no seller agent involved in the process.
👍 Benefits of Selling a House by Owner:
- Saving on the listing agent: Selling the house by yourself is all about Savings. You save on heavy real estate commissions and agent fees.
- Complete control of the process: You have the control to expedite the selling process at your own pace and need not be dependent on anyone else.
👎 Key Downsides of Selling Your Home By Owner:
- No MLS Exposure: MLS is the most important tool an agent has. Selling For Sale By Owner means limited exposure, so there will be less competition for your property. That will likely reduce the selling price. One study found that homes on the MLS sold for 17% more than homes, not on the MLS.
- No Help If You Need It: If you need help with paperwork, inspections, negotiations, or closing, you’re on your own as a For Sale By Owner.
» How to Sell a House by Owner in Chicago: Check out the details on how to sell a house by owner in Chicago.
4. Sell Your Home With a Traditional Full-Service Agent
From listing to closing, a full-service agent will help you with everything. But you’ll be paying a full 2.5% to 3% listing agent commission. And even if you find an unrepresented buyer, you’re still on the hook for the full commission.
👍 Key Benefits of Selling With a Traditional Full-Service Agent
- Pricing Assistance: Realtors have years of experience and knowledge of the historic sales in the neighborhood and can conduct a Comparative Market Analysis (CMA) for you.
- Help in Negotiations: Real estate agents master negotiation tactics. They can help you secure the best possible price for your home.
- Easy Paperwork: Real estate transactions involve extensive paperwork. A realtor can ensure all the documents and paperwork are submitted on time.
👎 Key Downsides of Selling With a Traditional Full-Service Agent
- Hefty Commissions: Real estate agent commissions in the US are 5.5% to 6%. That’s thousands of dollars of fees in commissions.
- Limited Control Over Your Sale: Everything will go through an agent. That reduces the risk that you will do something wrong, but will also limit the control you have over your transaction.
- Slow & Manual Process: Agents do things manually. A simple price change is several steps – the agent has to talk to you over the phone, create a price amendment, get you to sign it, then sign it, and only then can they update the price on the MLS.
Property inherited from your loved ones can be sold against some quick cash to clear the unpaid dues like mortgage, taxes, etc. Before selling the property it has to get clear the probate process in order to put up the property for listing.
Here Houzeo, one of the best Flat Fee MLS listing companies will help you attract a top-dollar deal.
» Houzeo: Click to Register and get full support to sell your Inherited Property in Chicago.
Frequently Asked Questions:
Can you sell inherited property in Chicago?
Yes, you can sell the inherited property in Chicago. Houzeo can help you to list your inherited house and make the selling process easy & quick.
How can i sell an Inherited Property in Chicago?
You can sell your Chicago inherited property in various ways like selling through iBuyer, selling the house by the owner, or through a Flat Fee MLS company. Houzeo is one of the best Flat Fee MLS companies that would give you a hassle-free experience.
Is there a time limit on selling inherited property?
No, there is no time limit to sell an inherited property. Once the probate process is completed and the legal inheritor is declared, then the inherited property can be sold anytime.
- Sell My House Fast for Cash: Find out the different ways to sell your house fast for cash.
- Selling a House As Is in Chicago: Check out how you can sell your house as is in Illinois.
- How To Sell a House By Owner in Chicago: If want to sell your Illinois house on your own, check out this guide to help you through the process.
- Real estate Market in Illinois: Watch out for the Real estate Market updates for Illinois before selling the house.
- Closing Cost: Closing Costs are the final step sellers and buyers need to complete to finalize the real estate deal. Here’s all you need to know!
- Best Time to Sell a House: Know when you can sell your house and what points to consider before sharing that.
- Seller’s Disclosure: Learn what the Home Sellers Need To Disclose before selling your house.
selling an inheritance tax, sell my inherited house, selling an inherited house taxes, how to sell an inherited house, can i sell a house i inherited, sell house inheritance tax, should i sell my inherited house, can i sell an inherited house, if i inherit a house can i sell it, selling an inherited property with a mortgage, selling inherited property in Chicago, inheritance laws, are inheritances taxed, stepped up basis, beneficiary living in inherited house, do all heirs have to agree to sell property, capital gains on inherited property, inheritance taxable, step up basis at death,
step up cost basis, taxes on inherited property, what inheritance is taxable, cost basis of inherited stock, how much tax on inheritance, inheritance tax on house, do i pay tax on inheritance, inheritance laws, death date website, how is inheritance taxed, tax on land sale, estate inheritance, inheritances taxable, does an estate pay taxes on sale of home, selling inherited property to sibling, are you taxed on inheritance, can siblings force the sale of inherited property, Housezo, houszeo, houzzeo, hozeo, cash house buyersUncategorized