Inherited a House? Here Are Your Options (Guide)
Inherited a House? Here Are Your Options
It’s not common to be left a house after someone’s death, so it’s expected that you might need some clarification on what you can do, what your responsibilities are, and what you’re going to have pay taxes on.
First and foremost, full-disclosure – these laws might be different depending on where you live, so always defer to your local governing agency. We’re not lawyers, just homebuyers who are dedicated to getting you the best money for your home – inherited or not.
Dealing with the Emotional Part of Inheriting a House
It can be difficult to deal with the loss of a loved one. If you’re emotionally tied to a house, especially if it’s something like your childhood home, or your first shared house with a spouse, it can be very hard to part with a home.
When you’re preparing to sell an inherited house, it might be helpful to have a trusted and rational friend help you navigate the process, help go in and clean out old possessions, and maybe even take pictures for old times sake.
We find that having someone who isn’t attached to the property and has no claim to any of the property can help the most, since there are going to be some important, objective decisions that need to be made regarding the property and the possessions within it.
Bonus points if they’re familiar with real estate.
Evaluating the Home-Ownership Cost of an Inherited Property
When you become the new owner of a home, you also become the owner of the mortgage. If the owner did not pay off the mortgage, you will be the responsible party for paying the rest of the mortgage.
Some people may choose to set up their wills to pay off the mortgage with their assets so that the person who the house gets passed to does not have to pay the bill. Some people may give the person the option to sell it back to the bank.
If there is more owed on the property than it’s valued at – which can happen after housing market problems or if the estate took out a second mortgage – the bank may offer you a short sale to clear some of the debt.
Depending on what you plan on doing with the property after you’ve inherited it, and depending on the condition of the property, you might need to make repairs.
You may consider performing a home inspection as you inherit the house, just like you would as if you were considering purchasing a home.
Unless you’re a certified home inspector, bringing in an expert who is unbiased, and not emotionally tied to the property, can be an excellent idea.
Inspections aren’t very expensive, and should run you well under $1,000. However, they may reveal very needed and expensive repairs.
Sell, Rent, or Keep? What to Do With Your New Inherited Home
If you’ve inherited a property that you’d like to keep, then you just need to plan your inspection, repairs, and changes before your move, and then execute.
However, if you plan to sell or rent, you may be legally obligated to make certain improvements to either the structure, wiring, or HVAC, based on your local requirements.
P.S. We buy homes as-is if you need to make a quick sale and don’t want to lose money on big repairs. If you want to learn more about it, you can contact our team and we can get you an offer way, way faster than a real estate agent selling process.
If you’re looking into getting into renting as a way to make money to pay off a mortgage, we wrote up a pretty good starter guides on managing mortgage payments and how to rent homes to make money.
If you inherited a house with a mortgage, and you’re looking to get into home renting full-time, we suggest you take a look at those articles and see if it’s a good choice for you.
Most people don’t sell a house more than once in their lifetime, so if you’re not familiar with it, that’s pretty normal.
The core of it is, generally, that any repairs will cost more than you’ll get out of them, but depending on the area that you’re trying to sell in, or if the building is structurally and legally sound, they may be necessary. Balance what you need versus what makes the house appealing.
There’s a section in our managing mortgage payments blog that has some really excellent information on how to decide where to spend your money on repairs, so check that out for better details.
Becoming a landlord is a big responsibility, and selling through a real estate agent can take some time and be a little costly. You can sell to us and get a cash offer quickly if you’re looking to not have to worry about the repair or closing process.
If You Aren’t the Sole Stakeholder
It gets a little more complicated if there are other people listed on a property.
You have a handful of options that you and the other parties that have a stake in the property. Be sure to discuss them carefully
You can either split the property, buy out the other half, sell and split the profits, or make a promissory note to pay out the other parties in time. Decide what is the the best path for you and the others who received their part of the property and make it official.
Make sure to consult a lawyer with any agreements you are making with other parties.
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January 21, 2020