People inheriting property just see dollar signs, especially coming out of the sellers’ market we just left. Incorrectly pricing a house can kill its ability to sell. This goes for all houses, not just inherited properties. It is a little harder to figure out the right price on a house that is dated and may be in need of repairs.

Here is a story

I was helping a family that was inheriting a house in an older high-end neighborhood in Kansas City. They had called me early in the year to give them a cash offer so they could walk away from the property. We offered them somewhere around $375,000. They did not like that number because they had been told by a realtor that they could get $575,000 if the place was cleaned up. (Note: Realtors are terrible about telling a seller that a house can sell for crazy prices, and nothing happens if they are wrong).

The family listed the house on the market for $575,000, and it did not sell. They dropped the price many times, and the house still did not sell. The family then took the house off the market and called us back in October. We told them we would give them $350,000. They were appalled that we would offer less than our original offer earlier in the year.

Here is why we did it. When we first looked at the property, we were in a position to sell the house in the summer months after the repairs were done. Now, we were looking at selling the house in the winter, when properties take longer to sell. The family did not accept the offer. Instead, they placed the house back on the market because one of the brothers said a house in this neighborhood would sell for way more than $350,000. They listed the house at $525,000 and ultimately got an offer of $425,000, which they paid a 6% commission on ($25,500). The process took over 10 months, and they pocketed $25,000 more than the original offer. I spoke to one of the heirs afterward, and he said he could have invested the money and made more in interest than they got from selling on the market. 

How to avoid this house price limbo

First, set expectations with all the heirs at the beginning of the process. The best way to do this is to have a real estate agent prepare a list of comparable sales in the neighborhood. Then talk with all the heirs about what the house might sell for based on what has sold in the area and the current condition of the inherited property. Determine a good price as a group. Nothing kills the sale of a house quicker than pricing it too high. People assume that something is wrong with the property and will not make offers. 

If a real estate agent is feeding you or your relatives numbers that are too good to be true, they probably are. If that is the case, see if the real estate agent will guarantee that price. If not, what happens if the house sells significantly below that price? It happens all the time. To get the listing, an agent can tell sellers any number they want. 

The longer you wait, the more you pay



Understand that the longer you hold the house, the greater the expenses will be, and the more chance there is for something to happen to the property. Every month you hold a house, someone has to pay the utilities, insurance, taxes, and maintenance. Those bills can add up and eat into the profit. In some cases, it has gotten to where someone cannot cover the bills anymore and the utilities get shut off. Then the pipes freeze. Or the insurance might lapse, and an event could happen. If the house is not covered by insurance, the family has to take that hit themselves. Houses sitting vacant are always more likely to be broken into or vandalized than occupied homes. All of these instances affect the amount of money a house might bring for the heirs. 

Kansas City Legacy Properties is designed to help people get through this situation as quickly as possible. That means we can handle the process quickly from start to finish. This saves the heirs money, time, and stress.

Give us a call today at 816-307-7163 to learn how we can create a customized solution for you and your heirs.