You’ve inherited a house! How exciting! But wait, not so fast. First of all someone is dead. When the consequences of dealing with the loss have subsided, without giving it much thought, many consider inheriting a house a windfall. The reality of it is however, that you may be inheriting a broken down sinking ship that you are now responsible for, whether you can afford it or not. So while the best intentions may have motivated the inheritance of that house, it may not always be financially beneficial. Many times, houses left in Wills are older and not in prime condition as time constantly batter its structural features such as foundations and roofs and wear out appliances and HVAC systems in the home.
In addition to all the stress of handling the challenges your benefactor may have left behind for you to clean up, including going through their crap and cleaning out the house and yard, you may be dealing with emotional strains as well. When selling inherited house in a lot of cases, there will be multiple heirs, and emotions may rule their words and actions at any time which can only add to your stress when dealing with matters of such importance.
Read on as we explore four things you should know about inheriting a house.
Regrettably, many people inherit a house, or selling inherited land, also get a great deal of debt along with it from unpaid taxes to liens and multiple mortgages against the property. Also, primary lien holders, such as equity lines of credit and tax liens, will receive payment first when the property is sold. This being the case, assessing where you stand with any debtors, including contracted workers holding mechanics liens against the property for improvements, judgment liens, and the mortgage, is the first step in dealing with your inheritance.
While inheriting a house or any real estate doesn’t necessarily trigger more tax liability, you should know that your decisions about what you do with the house very well may. Can you make improvements to the house, you can write these expenses off. There are also real estate taxes to consider; if they aren’t already a part of an existing mortgage payment, be sure you familiarize yourself with any type of deadlines. Inherited real estate is subject to a step-up-basis adjustment in the value of the property upon which your capital gains taxes on any growth moving forward are based.
As a house ages, maintenance costs are generally higher for older houses. Allowing routine maintenance to go undone can quickly escalate into more significant issues. Some houses have features that have become obsolete and require specialized knowledge for proper correction. With that said, it’s better to call in an expert for these types of repairs and upgrades which is vital to know about inheriting a house.
More significant issues also increase as properties age, and this is another thing you should know about selling inheriting house. Before deciding to take the house on as your own, you should have a professional inspection and estimates from at least three professional contractors. This will allow you to see just what you’re up against if you decide to hold onto the property. Sometimes, when opening up a section of the house for one repair, other repair issues come to light, like a domino effect, so keep extra funds on hand to cover these unexpected expenses during the repair and renovation process. Remember to also request an estimate of the time you’ll be holding onto the property until it’s ready to be lived in or sold.
Selling inherited home can be costly. Listing it on the MLS isn’t an inexpensive venture between cleaning, repairs, professional photographers and marketing, not to mention the inspections, real estate commissions and all the closing costs. Real estate agents can’t provide a closing date, however, so another thing you should know about selling inheriting home, you may end up waiting months before you can finally cash out.
You could avoid all of the expenses and contact a professional home buying company who will make you an all cash offer and buy this house as-is. They will walk you and the other heirs through the process step by step, making this time a bit easier on you. In addition, professional homebuyers offer guaranteed closing dates. A few of these companies will lay it all out on the table and compare what you’d profit from listing vs. selling directly, so you can make the best decision with your inheritance for your situation. Working with an expert at one of this companies can help you learn more about your options if you decide it’s best to sell the inherited house. It’s comforting to know experienced professionals will work with you as a guide.