By Justin Liva, Mojo House BuyersA parent or an aunt has passed, the house now belongs to the family, and nobody plans to live in it. If that's where you are, there's nothing to feel guilty about. Letting it go can be the right call for everyone involved.
I've helped a lot of people sell inherited homes they didn't want, and for many of them the sale money was a chance to start fresh. Below is what I'd want a friend to understand before making any decision about a house like this.
Owning it and being able to sell it are different things
When a house was in your loved one's name alone, someone needs authority from the county Surrogate before a deed can be signed for the estate. If there's a will, the Surrogate issues Letters Testamentary confirming the executor's authority. If there isn't one, the Surrogate appoints an administrator. My guide to selling a house in probate walks through how that appointment works.
Title matters here. When a married couple owned the house as tenants by the entirety, the New Jersey Division of Taxation does not treat the surviving spouse's ownership as a transfer, so no tax waiver is needed. If you and your brothers or sisters end up owning the house together, that situation has its own wrinkles, which I cover in selling a house with multiple owners.
New Jersey's inheritance tax in plain terms
New Jersey no longer imposes its estate tax for anyone who died on or after January 1, 2018, according to the Division of Taxation. The separate inheritance tax still exists, and what it means for you depends on your relationship to the person who died.
The Division groups heirs into classes. Class A covers a spouse, children, stepchildren, grandchildren, parents and grandparents, and the Division's rate schedule lists Class A transfers as entirely exempt. Brothers, sisters and a son- or daughter-in-law are Class C. Nieces, nephews, cousins and friends land in Class D. Those last two classes can owe tax on a graduated scale running from 11% to 16%.
Even when nobody owes anything, there's still a step to handle. The Division treats the tax as a lien on everything the decedent owned for 15 years unless it's paid or secured, and New Jersey real estate falls under its waiver requirements. For Class A heirs of a New Jersey resident, there's a shortened request, Form L-9, that the Division says may eliminate the need for a formal return. Where a return and payment are due, the filing rules set a deadline of eight months from the date of death, and late tax picks up interest at 10% a year.
Every estate has its own facts. Have the estate's lawyer or accountant tell you which forms apply to your family before you count on any of this.
What an empty house costs while you decide
Bills keep arriving after someone passes. Property taxes, homeowners insurance, water, electric, heat in winter, lawn care in summer and any mortgage balance all keep running. Add any repairs that were put off.
An empty house also has nobody there to notice a leak or a broken window. Call the insurance company, tell them the house is empty and ask whether that changes your coverage.
Here's a simple exercise. Add up what the house costs you each month, then multiply by the number of months you expect to hold it. That total is a real part of the price of keeping it, even though nobody mails you an invoice for it.
Keep it, rent it or sell it
Keeping it works when a family member wants to live there and can carry the costs. It works less well when the plan is "someday."
Renting it means becoming a landlord, which is real work. Once a tenant moves in, New Jersey's Anti-Eviction Act generally requires good cause to make them leave, so think of renting as a long commitment. I explain more in my guide to selling a rental with tenants. If the house already has someone renting it, that doesn't stop a sale to me: I buy with tenants still living there.
Listing it with an agent will usually bring the highest price if the house is in decent condition and the family can wait a few months. I tell people that even though I'm a buyer, because it's true.
Selling it as-is to a direct buyer makes more sense when the house needs a lot of work, when it's still full of a lifetime of belongings, or when the heirs live far away and can't manage a listing.
How I buy inherited houses
When I look at an inherited house, I weigh the condition, recent sales nearby, the repairs it needs and what it will cost to carry and sell. I want the numbers to work for the family and for me. The offer costs nothing and you're under no obligation to take it.
You don't have to clean the place out. Take the photos, the furniture and anything else that matters, and leave behind whatever you don't want. I handle the cleanout after the sale, so nobody in the family has to spend weekends emptying closets. There's no agent commission when you sell to me directly. Condition isn't a barrier either, since I buy inherited houses in any shape, fire-damaged and unlivable ones included. Who covers closing costs depends on the deal; sometimes I do, sometimes the seller does.
I also work around the estate's timeline. If the Surrogate hasn't issued paperwork yet or the tax waiver is still pending, we can talk numbers now and set the closing for whenever the estate is ready. If one of the heirs or the estate itself is a nonresident seller, read my guide on selling New Jersey property as a nonresident so the closing paperwork doesn't catch you off guard.
If you'd like a number to compare against a listing, request a cash offer and I'll take a look.