Selling an Inherited House in Michigan: A Step-by-Step Guide

Step 1: Figure out how the house passed to you

The paperwork you'll need depends on how the owner held the house. Look at the most recent recorded deed (the county register of deeds can provide a copy) and any will or trust documents.

• Lady Bird deed (enhanced life estate deed): the house passes directly to the named beneficiaries at death, with no probate. This is common in Michigan.
• Joint ownership with right of survivorship: the surviving owner owns it outright.
• Held in a trust: the successor trustee handles the sale under the trust's terms.
• In the owner's name alone, with or without a will: the house usually goes through probate.

Step 2: If probate is needed, get Letters of Authority

Probate is opened in the probate court of the county where the person lived. For a Detroit homeowner, that's the Wayne County Probate Court. The court appoints a personal representative (named in the will, or chosen under state law if there's no will) and issues Letters of Authority. Those letters are what a title company needs to see before the personal representative can sign a sale.

Many Michigan estates use informal probate, which is handled mostly through paperwork with the probate register rather than hearings. Contested estates take longer. A probate attorney can tell you which applies and how long to expect.

You can usually sign a purchase agreement while probate is still open and set the closing for when the paperwork is ready. That lets you lock in a sale without waiting months to start.

Step 3: Protect the house while you decide

• Call the homeowner's insurance company. Many policies limit coverage once a house sits vacant, and a vacancy policy may be needed.
• Keep the heat on or winterize the plumbing. A Michigan winter can burst pipes in an empty house within days.
• Change the locks, stop the mail and check on the house regularly. Vacant homes attract break-ins.
• Keep paying the property taxes. Unpaid Michigan property taxes eventually lead to tax foreclosure, even for an estate.

Step 4: Understand the tax picture

Two tax rules matter most when you sell an inherited Michigan house.

Federal capital gains: inherited property usually gets a stepped-up basis, meaning its value for tax purposes resets to roughly its fair market value on the date of death. If you sell fairly soon for close to that value, there's often little or no taxable gain. An appraisal as of the date of death helps document it.

Michigan property tax uncapping: Michigan caps how fast a home's taxable value can rise, but the cap generally comes off when ownership transfers, which can raise next year's tax bill. Transfers to certain close relatives can be exempt if the home's use doesn't change. If you plan to keep the house for a while, ask the city or township assessor how this applies before you budget.

Step 5: Choose how to sell

There's no single right answer. It depends on the house's condition, how far away you live, how many heirs need to agree, and how much time and money you want to put in.

• Fix it up and list it with an agent: usually the highest price, but it means paying for repairs and a cleanout up front, managing contractors, and waiting through showings and a buyer's financing.
• List it as-is with an agent: less work, but buyers with mortgages may not be able to finance a house that needs major repairs.
• Sell to a cash buyer as-is: a lower price than a fully repaired listing, but no repairs, no cleanout, no showings, and a closing date you choose. Out-of-state heirs can usually sign remotely.

Whatever you choose, get the offer in writing and compare it against an agent's estimate of what the house would net after repairs and commissions. If several heirs share the house, a written number gives everyone the same facts to discuss.