Inherited a Property You Don't Need? Sell It Fast for Cash

## Selling an Inherited Property in California Inheriting a home is one of the most common — and most complicated — real estate situations in California. Whether a parent, grandparent, or other family member has passed away and left you property, you are now responsible for a significant asset that comes with ongoing costs, legal requirements, and emotional weight. ### The Reality of Inheriting a Home The moment you inherit a property, you inherit its responsibilities: **Property taxes** continue to accrue whether you live in the home or not. Under Proposition 19 (Revenue and Taxation Code §63.2, effective February 2021), inherited property is reassessed to current market value unless you move into it as your primary residence within one year and file for the parent-child exclusion. For a home purchased decades ago under Proposition 13, this reassessment can mean property taxes jumping from $2,000 per year to $10,000 or more. **Insurance** is required to protect the property and your liability. Vacant home insurance is significantly more expensive than standard homeowner's insurance — often 2 to 3 times the cost — because vacant properties have higher risk of vandalism, water damage, and fire. **Maintenance** does not stop when the owner passes. Lawns need mowing, pipes can burst, roofs leak, and code violations can be issued. For out-of-state heirs, managing this from a distance means hiring property managers or making frequent trips. **Liability** is real. If someone is injured on the property — a mail carrier trips on a broken step, a neighbor's child falls in the pool — you can be held personally liable as the property owner. ### Do You Need Probate to Sell? Whether probate is required depends on how the property was owned: **Property in a Living Trust.** If the deceased placed the property in a revocable living trust, probate is not required. The successor trustee named in the trust can sell the property directly. This is the fastest path to sale and avoids court involvement entirely. **Property with Transfer-on-Death Deed.** California allows revocable Transfer-on-Death (TOD) deeds under Probate Code §5600-5696. If the deceased executed a TOD deed, the property transfers to the named beneficiary upon death without probate. The beneficiary can then sell directly. **Property Owned Solely by the Deceased.** If the property was in the deceased's name alone (not in a trust) and the estate value exceeds $184,500, probate is required. The court must appoint a personal representative who has authority to sell. **Community Property with Right of Survivorship.** If the property was held as community property with right of survivorship (or joint tenancy), it passes automatically to the surviving spouse or co-owner without probate. **Small Estate Affidavit.** For estates valued under $184,500, heirs can use a Small Estate Affidavit under Probate Code §13100-13116 to claim property without probate, though this has limited applicability for real property that exceeds this threshold. ### Proposition 19: The Game-Changer for Inherited Property Before Proposition 19, children who inherited a parent's home could keep the parent's low Proposition 13 assessed value indefinitely, regardless of whether they lived in the home or used it as a rental. This was an enormous tax benefit — a home assessed at $100,000 in the 1980s might have a current market value of $700,000, with taxes based on the original assessment. **Proposition 19 changed everything.** Effective February 16, 2021: - The parent-child exclusion **only applies** if the child uses the inherited property as their **primary residence** - The child must file for the exclusion within **one year** of transfer (or one year of the parent's death) - Even with the exclusion, the assessed value is adjusted to current market value **minus $1 million** (so there is still a benefit, but it is capped) - If the child does not move in, the property is **reassessed to current market value** — often resulting in a massive property tax increase This change has made selling inherited property the clear financial choice for heirs who do not plan to live in the home. Keeping it as a rental or vacant property now means paying full market-rate property taxes, which significantly reduces any rental income or investment benefit. ### Tax Implications of Selling Inherited Property **Stepped-Up Basis.** One significant tax advantage of inherited property is the **stepped-up cost basis** under Internal Revenue Code §1014. The property's tax basis is "stepped up" to its fair market value at the date of the deceased's death (or an alternate valuation date). This means if you sell the property for close to the appraised value at time of death, you may owe little or no capital gains tax. For example: If your parent bought the home for $100,000 and it was worth $600,000 when they passed, your cost basis is $600,000 — not $100,000. If you sell for $610,000, you only pay capital gains tax on the $10,000 gain. **Timeline matters.** The stepped-up basis is based on the date-of-death value. If you hold the property for years and it appreciates, you will owe capital gains on the appreciation above the stepped-up basis. Selling sooner rather than later often minimizes tax liability. **California capital gains.** California does not offer a separate capital gains rate — capital gains are taxed as ordinary income, with rates up to 13.3%. This makes the stepped-up basis even more valuable, as it can save you significant state taxes. ### How SHH Holdings Helps with Inherited Properties We purchase inherited properties across Los Angeles, San Bernardino, Riverside, and Orange counties, and our process is designed for the unique challenges of inherited property sales. **We buy in any condition.** The home may have decades of deferred maintenance, outdated systems, or damage from vacancy. None of this matters to us — we buy as-is. **We handle the clean-out.** If the home is full of the deceased's belongings, you do not need to sort through, donate, or discard anything. We take care of the entire clean-out after closing. We understand the emotional difficulty of dealing with a loved one's possessions and handle everything with respect. **We work with out-of-state heirs.** Many heirs live outside California and cannot easily visit the property or attend closings. We coordinate everything remotely and arrange mobile notary services so you can close from wherever you are. **We coordinate with attorneys.** Whether the property is in a trust, going through probate, or being transferred through other means, we work with your attorney to ensure the sale meets all legal requirements. **We close fast.** For trust properties and TOD transfers, we can close in as few as 7 to 14 days. For probate properties, we close as soon as the court process allows. ### Multiple Heirs: When Everyone Needs to Agree When multiple people inherit a property, selling requires cooperation. Common scenarios include: - **All heirs agree to sell.** This is the simplest case. The personal representative or trustee sells the property and distributes proceeds according to the will or trust. - **Some heirs want to sell, others do not.** This creates a deadlock. Under California Code of Civil Procedure §872.210 et seq., any co-owner can file a **partition action** to force the sale. However, partition actions are expensive and time-consuming. - **Heirs cannot be located.** If an heir cannot be found, the probate court may authorize the sale and hold that heir's share in trust. A fair cash offer from SHH Holdings can help resolve these disputes by providing a clear, objective value that all parties can evaluate. Call us at **(626) 414-4859** for a free consultation about your inherited property. We will help you understand your options, tax implications, and how quickly we can close.