I Just Inherited a House in California — Where Do I Start?

First: Don't Start Spending Money on the House Yet

This is one of the first things I tell people dealing with an inherited property.

Don't automatically hire contractors.

Don't order a new kitchen.

Don't replace all the flooring.

Don't schedule a $10,000 clean-out because someone told you everything has to be removed.

And don't accept the first cash offer you receive simply because dealing with the house feels overwhelming.

You have time to gather information.

Before spending money or making major decisions, let's understand:

• The condition of the property
• Its approximate market value
• Whether there's a mortgage
• Whether there are other liens
• How title is currently held
• Whether probate is involved
• Who has authority to make decisions for the estate
• What the house might sell for in its current condition
• Whether making any repairs would actually be worthwhile

Information comes before decisions.

Do I Have to Go Through Probate?

Not every inherited property situation is the same.

Whether probate is required can depend on how title was held, whether the property was in a trust, the estate plan, the value and nature of the estate, and other circumstances.

This is a legal question, and a California probate or estate attorney can advise you about what is required in your particular situation.

From the real estate side, one of the first things I want to know is:

Who currently has the legal authority to sell the property?

If probate is necessary, that may eventually be a court-appointed executor or administrator.

If the property was held in a trust, a successor trustee may have authority.

Other ownership arrangements can create different circumstances.

You don't have to know the answer before calling me.

But we do need to establish it before completing a sale.

Don't Assume You Have to Wait Until Probate Is Completely Finished

This is a common misconception.

If the property is going through probate, that doesn't necessarily mean the house has to sit vacant until every aspect of the estate has been completed.

California probate properties can often be sold while probate is still underway, provided the appropriate person has authority to act and the required procedures are followed.

That can be important because houses continue costing money while estates are being administered.

There may still be:

Mortgage payments.

Property taxes.

Insurance.

Utilities.

HOA dues.

Landscaping.

Maintenance.

Security.

Repairs.

A house doesn't stop requiring attention because its owner passed away.

If selling the property is ultimately going to be necessary, it may make sense to begin discussing the real estate before the entire probate process is finished.

Find Out Whether There's Still a Mortgage

Inheriting a house doesn't necessarily mean inheriting a house that's paid off.

There may still be a mortgage.

There could be a home equity loan or line of credit.

There may have been a loan modification.

There could be other recorded liens or obligations affecting the property.

Before deciding what the estate should do with the house, it's useful to understand approximately:

What is the property worth?

and

What is owed against it?

Those two numbers can dramatically change the available options.

And don't rely entirely on what someone remembers.

A preliminary title report and current loan information may reveal things family members didn't know about.

What If the House Is Worth Less Than the Mortgage?

Don't panic and don't assume the estate has to come up with the difference before asking questions.

If the mortgage and other liens exceed the property's likely value, there may be additional options to investigate.

Depending upon the circumstances, a short sale could potentially be one of them.

That's a situation I would want to identify early rather than after you've already spent money repairing or cleaning out the property.

An inherited property with little or no equity requires a different strategy from a house with substantial equity.

Find out which situation you actually have before making decisions.

What Do I Do With Everything Inside the House?

For many families, this is harder than dealing with the real estate.

You open the door and see a lifetime.

Furniture.

Clothing.

Photographs.

Documents.

Dishes.

Tools.

Collectibles.

Boxes nobody has opened in twenty years.

And now someone has to decide what happens to all of it.

Before removing or disposing of personal property, the appropriate estate representative should determine what needs to be preserved, distributed or otherwise handled as part of the estate.

Once those decisions have been made, we can talk about what level of clean-out actually makes sense for the sale.

You may eventually decide to completely empty the property.

But you don't necessarily need to have a spotless, empty house before you contact me.

I'll look at it the way it is.

What If the House Needs a Lot of Repairs?

That's okay too.

Inherited properties frequently have deferred maintenance.

Maybe the roof is old.

The kitchen is dated.

The carpet needs to go.

There are plumbing problems.

The yard hasn't been maintained.

The house hasn't been remodeled since 1987.

None of that automatically means you need to renovate it.

Sometimes repairs make financial sense.

Sometimes a few carefully selected improvements are worthwhile.

And sometimes the better decision is to sell the property in its present condition.

Before spending estate money, ask:

If we spend this money, are buyers likely to pay us back for it?

A $50,000 renovation that only increases the likely selling price by $30,000 isn't much of an improvement for the estate.

Let's look at the numbers before you start writing checks.

Selling As-Is Doesn't Mean Giving the House Away

This is another important misconception.

You may decide not to renovate the inherited property.

That does not automatically mean you have to sell it to an investor at a deeply discounted price.

There are buyers willing to purchase properties that need work.

Depending upon the house and its condition, that could include investors, contractors and even owner-occupant buyers looking for an opportunity.

The property still needs to be evaluated based on:

Location.

Condition.

Lot.

Size.

Layout.

Comparable sales.

Current competition.

And the likely buyer pool.

A cash investor may ultimately be the right buyer.

But you should understand what the property is realistically worth before deciding that.

What If I Live Outside California?

You may have inherited a California house while living hundreds or thousands of miles away.

That can make everything seem more difficult.

Who checks the property?

Who lets people inside?

Who handles photographs?

Who coordinates vendors?

Do you have to fly to California every time something needs to be signed?

Usually, much of the real estate process can be coordinated remotely.

Documents can often be signed electronically.

Property access can be handled locally.

Vendors can be coordinated when needed.

Inspections and other transaction details can be managed without requiring you to constantly travel back and forth.

I've worked with out-of-area property owners, and my goal is to make the real estate portion of the process as manageable as possible.

You don't need another job just because you inherited a house.

What If There Are Several Heirs?

This is another situation where it's helpful to separate the real estate issues from the legal issues.

Maybe everyone agrees that the house should be sold.

Great.

Maybe one person wants to keep it.

Another wants their money.

Another thinks the house is worth much more than it actually is.

And another doesn't want anything to do with the entire situation.

Disagreements involving ownership, beneficiary rights or estate administration may require guidance from the estate's attorney.

But I can help provide something extremely useful:

real-world information about the property.

What is it likely worth?

What would it take to sell?

What repairs might make sense?

What would selling as-is look like?

What is happening in the current market?

Sometimes having actual information makes family discussions much easier.

Be Careful With Unsolicited Offers

Inherited properties can attract attention.

You may receive letters.

Postcards.

Phone calls.

Texts.

Emails.

Someone may offer to buy the property for cash before you've even decided what you're going to do.

That doesn't automatically mean the offer is bad.

It also doesn't mean it's good.

The important thing is understanding the property's approximate market value before you agree to sell it.

Convenience has value.

Speed has value.

A guaranteed cash transaction may have value.

But those benefits have a price.

You should understand what that price is before deciding whether the tradeoff makes sense for the estate.

You Don't Need to Know What You Want to Do Yet

This may be the most important thing on this page.

You don't need to call me and say:

“Dawn, I'm ready to list the house.”

You can call and say:

“Dawn, I just inherited this house and I have no idea what I'm supposed to do with it.”

That's enough.

We can start there.

Maybe selling immediately makes sense.

Maybe you need to handle something with probate first.

Maybe the property needs to be evaluated.

Maybe we need to look at title.

Maybe you need to speak with an attorney.

Maybe you need more information before making any decision at all.

The first step doesn't have to be listing the house.

The first step can simply be understanding your options.

I Just Inherited a California House. What Should I Do First?

If you're looking at an inherited property and feeling like there are twenty things you need to do immediately, start smaller.

Find out:

Who has authority over the property?

What is the house worth?

What is owed against it?

What condition is it in?

What are the realistic options?

Then take the next step.

I've been a California real estate broker for more than 26 years and work with probate, inherited and complicated property sales throughout Southern California.

You don't need to clean the house before calling.

You don't need to make repairs.

You don't need to know whether you want to sell.

And you certainly don't need to understand every part of the probate process.

Just tell us what happened and what you're dealing with. We'll start there.

California probate, trust, title and estate requirements vary according to the circumstances of the estate and how the property is owned. Questions regarding probate administration, beneficiary rights, trusts or legal authority to sell should be discussed with a qualified California probate or estate attorney. This page provides general real estate information and is not legal, tax or financial advice.

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