Inherited a House in Cleveland? What to Sort Out Before You Decide to Sell

Inherited a House in Cleveland? What to Sort Out Before You Decide to Sell

By Mike Ferrante, Broker Associate, The Mike Team at LPT Realty

When a parent's house becomes your responsibility, the real estate decisions usually show up at the worst possible time. You're grieving, you may live out of state, and there's a house in Cleveland with a furnace of unknown age and a mailbox that keeps filling up. Here's how I'd work through it, in the order the decisions actually come up.

First: who has the authority to sign?

Nobody can list the house until someone has legal authority to sell it. Sometimes that's simple. Ohio allows a transfer on death designation on a deed, and if your parents recorded one, the house may pass outside of probate once the right paperwork is filed. Other times the estate goes through probate court and the executor or administrator signs once the court gives them authority. I'm not an attorney, and this is the step where you want one. Ask the question on day one, because it controls your timeline more than anything a Realtor does.

It's also worth a call to a tax professional early. Inherited property is generally treated differently for capital gains purposes than a house you bought yourself, and the details can change which option makes the most sense for your family.

Next: find out what the city already knows about the house

Every sale of a one-to-four unit home in the City of Cleveland requires a Certificate of Disclosure from the Department of Building and Housing. The city is explicit that this is not a point of sale inspection. Nobody walks through the house. What the certificate does is give the buyer the property's code violation and condemnation history and confirm its legal use. The fee is $60, and you can request it through the city's online portal.

For an heir, that certificate is useful early, not just at closing. If there's an old violation on file, you want to learn about it now, while you're still deciding what to do, not from a buyer's side three weeks before closing. And if the house was ever rented, the city's application notes that rental fees have to be current before the certificate is released.

This one is personal for me. Long before I was licensed, I bought a house directly from the owner with no disclosure form. I learned later that the house had been condemned at one point over foundation damage. It had been repaired, nobody told me, and years later other parts of the basement started to fail. That's exactly the kind of history Cleveland's certificate is designed to put on the table, and it's why I'd rather an heir see it first than have a buyer find it.

An empty house costs money every month

Most inherited homes sit empty for a while, and that time isn't free. Taxes, insurance, utilities, lawn care and snow removal keep coming. When I was flipping houses, the carrying costs were the part of the budget that quietly ate the profit, and a vacant house is a target for vandals and thieves. Call the homeowner's insurance carrier early, too. Many policies treat a vacant house differently than an occupied one, and you don't want to find that out after a pipe freezes in January. If the house will be empty for a stretch, ask the Department of Building and Housing whether any vacant property requirements apply.

Sell as-is, or fix it up first?

This is the real decision, and there isn't one right answer for every family. I'd ask three questions.

How far is the house from market-ready? Cleaning out, deep cleaning, fresh paint and yard work are one category. A roof, a furnace, electrical updates or a wet basement are another. The first category often pays for itself in the sale price. The second often doesn't, once you add the months it takes.

Who is going to manage the work? A renovation run from out of state, by siblings who need to agree on every contractor, is hard. I've done more than 50 flips, and I still build at least a 10% contingency into every rehab budget, because older houses nearly always reveal something once the walls are open.

What does the family actually need? Some families need the money divided cleanly and soon. Others are fine waiting for a higher number. A fair as-is sale to a buyer who wants a project is a legitimate outcome, not a failure.

For a lot of inherited Cleveland homes with dated but working systems, my lean is: clean it out, clean it well, paint, fix the obvious small items, and sell the bigger items as-is with the price reflecting them. Heirs get a solid number without taking on a renovation they never signed up for.

Price it on today's market, not on memories

Heirs often start with the number their parents always believed the house was worth, or with a home value website. Neither one knows the furnace is 30 years old. We price an inherited home the same way we price any other: recent comparable sales nearby, adjusted honestly for condition, and a clean round-number list price.

If you've inherited a home in Cleveland or anywhere in Cuyahoga County, we can walk you through the options before you commit to one. Reach The Mike Team at www.21mike.com, call +1(216)373-7727, or find us on Google.