Inherited a House in Michigan? Here Are Your First Steps

Inheriting a house can come with a lot of decisions at a time when your family may already be dealing with the loss of a loved one.

You may be wondering what needs to happen immediately, whether the property has to go through probate, who is responsible for the mortgage and utilities, what to do with everything inside the house, and whether it makes more sense to keep, rent, or sell the property.

You do not need to make every decision at once.

The best place to start is by protecting the property, gathering information, and determining who has the legal authority to make decisions regarding the home.

Here are some practical first steps for anyone who has inherited a house in Michigan.

1. Secure the Property

The first priority is making sure the home is secure.

If the property is vacant, check all exterior doors and windows and make sure they lock properly. Determine who currently has keys, garage door openers, or access codes.

Depending on the circumstances, you may want to:

• Change or rekey exterior locks
• Change garage door and security system codes
• Secure accessible windows
• Collect spare keys
• Remove obvious valuables from view
• Make sure exterior lights are working
• Arrange for someone to periodically check the property

If the home will be vacant for an extended period, regular visits are especially important. A small water leak, furnace failure, storm damage, or other problem can become significantly more expensive if nobody notices it.

Michigan law gives an appointed personal representative responsibilities involving the management, protection, and preservation of estate property under the representative's control. (Michigan Legislature)

2. Do Not Immediately Shut Off the Utilities

It may seem logical to cancel utilities if nobody is living in the house, but doing so too quickly can create problems.

Electricity may be needed for lighting, security systems, sump pumps, refrigerators, and showings.

Water may still be needed for cleaning, maintenance, and preparing the property.

Natural gas or electricity may be necessary to maintain heat during Michigan winters.

Turning the heat off in cold weather can create a serious risk of frozen pipes and water damage.

Instead of automatically shutting everything off, determine which services are necessary to safely maintain the property.

Also check for:

• Automatic utility payments
• Outstanding balances
• Water bills
• Property taxes
• Mortgage payments
• Homeowners association dues, if applicable
• Lawn service
• Snow removal
• Security monitoring
• Internet or cable services

Some services may eventually be canceled, but protecting the property should come first.

3. Contact the Insurance Company

Do not assume the existing homeowners insurance policy should simply remain untouched after the owner's death.

Contact the insurance company or agent and explain the situation, including whether the property is currently occupied or vacant.

Insurance companies have different requirements, and changes involving occupancy or the household can affect what coverage is appropriate. Michigan's Department of Insurance and Financial Services recommends reviewing insurance coverage when household circumstances change and working directly with an insurance professional regarding the appropriate coverage. (Michigan.gov)

This is particularly important if the property will sit vacant while the estate is being settled.

Ask the insurance professional specifically whether the current policy remains appropriate and whether any changes are necessary.

4. Take an Inventory Before Removing Belongings

One of the biggest jobs associated with an inherited home is usually everything inside it.

Furniture, photographs, paperwork, tools, jewelry, collectibles, household items, and decades of personal belongings may need to be sorted.

Before family members begin removing things, it can be helpful to document what is there.

Take photos or video of the rooms and important belongings.

Michigan DIFS also recommends maintaining an inventory of personal property because it can be valuable when dealing with insurance claims. (Michigan.gov)

From a practical estate standpoint, documenting belongings can also make it easier for family members to communicate about what is in the house.

Try to separate items into categories such as:

• Important documents
• Family keepsakes
• Items beneficiaries want
• Items that may have significant value
• Items to donate
• Items to sell
• Items to dispose of
• Do not rush to empty the house simply because selling it is eventually the plan.
• Important documents can easily be mixed in with ordinary paperwork.
• Look for items such as:
• The will
• Trust documents
• Property deeds
• Mortgage statements
• Tax records
• Insurance policies
• Bank information
• Vehicle titles
• Property surveys
• Receipts for major home improvements
• Warranties
• Utility bills
• Lease documents if the property was rented

Keeping those documents organized may save considerable time later.

5. Determine How the Property Is Titled

This is one of the most important steps.

Inheriting a house does not automatically mean the property will follow the same process in every situation.

How the home was owned can affect what happens next.

For example, a property may have been owned individually, jointly with another person, or through a trust.

Michigan Legal Help explains that while probate courts oversee the administration of many estate assets, some property generally falls outside the probate estate, including certain jointly owned property and property held in qualifying trusts. (Home | Michigan Legal Help)

Before listing or selling the home, determine:

• Who is currently shown on the deed?
• Was there a trust?
• Was there a will?
• Was the property jointly owned?
• Has a personal representative been appointed?
• Are there multiple heirs or beneficiaries?
• Is there an existing mortgage or lien?

As a Realtor, I can help coordinate the real estate side of the transaction, but questions regarding ownership, probate requirements, authority to sell, and distribution of estate proceeds should be reviewed by the appropriate legal and title professionals.

6. Find Out Whether Probate Is Necessary

Not every inherited home requires the same probate process.

Michigan probate administration generally handles estate property that must be transferred after someone dies, while certain jointly owned assets and trust assets may pass through other mechanisms. (Home | Michigan Legal Help)

If probate is required, a personal representative may be appointed to administer the estate.

Michigan's Estates and Protected Individuals Code gives a personal representative significant authority over estate property, including responsibility for protecting estate assets and, subject to the particular administration and any applicable restrictions, powers involving the sale of estate property. (Michigan Legislature)

However, every estate is different.

Before signing contracts, making major improvements, distributing belongings, or agreeing to sell the property, confirm who actually has authority to make those decisions.

A probate attorney can explain the legal process based on the specific estate.

7. Evaluate the Condition of the House

Once the immediate legal and property-protection issues are under control, take a careful look at the home's condition.

Inherited homes can range from completely updated and move-in ready to properties that have accumulated years of deferred maintenance.

Start by identifying problems rather than immediately planning renovations.

Look for:

• Active plumbing leaks
• Water damage
• Electrical concerns
• Roof problems
• Furnace and air-conditioning issues
• Broken windows
• Doors that do not function properly
• Basement or crawl-space moisture
• Sump pump problems
• Damaged flooring
• Peeling paint
• Exterior maintenance
• Overgrown landscaping
• Garage or outbuilding issues

The goal at this stage is to understand what you are dealing with.

You do not necessarily need to renovate the property.

In many situations, repairing basic maintenance items, cleaning the house, removing excess belongings, and improving presentation may provide a better return than completing a major remodel.

8. Be Careful About Spending Money on Renovations

Families sometimes assume they need to completely update an inherited home before selling it.

That is not always the best financial decision.

A new kitchen might increase the home's appeal, but that does not automatically mean you will recover every dollar spent.

The same is true for bathrooms, flooring, windows, and other major improvements.

Before investing substantial money, compare three things:

• What could the home realistically sell for in its current condition?
• What repairs or improvements would actually make a meaningful difference?
• What could the home potentially sell for after those improvements?
• You also need to consider the cost and time involved.

If you spend $40,000 renovating a property but only increase its likely sale price by $30,000, the project probably did not accomplish what you intended.

Sometimes the best strategy is a major renovation.

Sometimes it is completing a handful of repairs.

Sometimes it is simply cleaning the property and selling it as-is.

That decision should be based on the numbers, not assumptions.

9. Decide Whether to Keep, Rent, or Sell the Property

Once you understand the property's condition and legal situation, you can begin considering the long-term options.

KEEP THE HOME

Keeping the property may make sense if someone in the family wants to live there or if the home has sentimental or strategic long-term value.

Consider the ongoing expenses, including:

• Mortgage payments
• Property taxes
• Insurance
• Utilities
• Maintenance
• Repairs
• Association fees
• Future improvements

RENT THE HOME

Turning the property into a rental may create ongoing income, but it also turns the estate asset into an investment property.

Before deciding to rent it, evaluate:

• Expected monthly rent
• Property taxes
• Insurance
• Mortgage payments
• Maintenance
• Vacancy
• Repairs
• Property management
• City rental requirements
• Expected cash flow

The property's condition should also be evaluated from a landlord and tenant-safety perspective.

SELL THE HOME

Selling may provide the cleanest solution when beneficiaries want to convert the property into cash, when nobody wants to maintain it, or when multiple heirs would otherwise have to manage the property together.

Selling can also eliminate ongoing carrying costs such as taxes, insurance, utilities, lawn maintenance, snow removal, and repairs.

There is no universally correct answer.

The best decision depends on the family, the estate, the property, and the financial numbers.

Tax consequences can also be important when deciding whether to keep, rent, or sell inherited real estate, so a CPA or qualified tax professional should be consulted regarding the specific estate.

10. Find Out What the Home Is Actually Worth

Before deciding whether to invest money into the property or sell it as-is, get a realistic understanding of its current market value.

An online estimate may not properly account for the condition of an inherited property.

I typically look at:

• Recent comparable sales
• Current competing listings
• Pending sales when available
• Property condition
• Location
• Lot characteristics
• Updates
• Deferred maintenance
• Buyer demand
• Likely buyer objections
• Potential repair costs
• Overall marketability

For example:

• Estimated value in current condition
• Estimated value after basic cleanup and repairs
• Estimated value after larger improvements
• Estimated costs associated with each strategy

That allows the family to make a more informed decision about where spending money actually makes sense.

You Do Not Have to Figure Everything Out at Once

Handling an inherited property can feel overwhelming because there are legal, financial, emotional, and practical decisions happening at the same time.

Start with the immediate priorities:

• Secure the property.
• Maintain necessary utilities.
• Contact the insurance company.
• Document the contents of the home.
• Gather important paperwork.
• Confirm ownership and legal authority.
• Evaluate the condition.
• Determine the home's market value.

Then decide whether keeping, renting, or selling makes the most sense.

If you inherited a home in Metro Detroit or elsewhere in Southeast Michigan, I can help with the real estate side of that process.

I can walk through the property, help identify what may be worth repairing and what I would leave alone, prepare a market analysis, estimate potential seller proceeds, and develop an as-is versus improved selling strategy.

When necessary, I can also work alongside the estate's attorney, title company, contractors, clean-out companies, and other professionals involved in preparing the property for sale.

You do not need to have the house completely cleaned out or have every answer before contacting me.

Sometimes the most useful first step is simply walking through the property together and creating a plan.

Jason Salem
REALTOR®
REALTEAM Real Estate
Homes for Heroes Affiliate
www.jasonsalem.com

This article is intended to provide general real estate information and is not legal or tax advice. Probate, title, estate administration, and tax questions should be reviewed with the appropriate Michigan attorney, title professional, or tax professional.

#MichiganProbate #InheritedHouse #InheritedProperty #MichiganRealEstate #MetroDetroitRealEstate #MetroDetroitHomes #ProbateRealEstate #EstateSale #SellingInheritedProperty #HomeSellingTips #MichiganRealtor #JasonSalem #REALTEAMRealEstate