You Have Just Inherited A Property!
What do you do now???
After the passing of a loved one, you may learn that you
were remembered in their estate planning. You probably are not in a frame of
mind to make quick decisions regarding a property following a loved one's
passing.
If you are lucky, the estate trustee was able to settle all
debts associated with the property, such as the mortgage as part of the execution of
the will or through the probate process.
Most people know that when the original borrower dies and
leaves the house, ownership and obligation is legally transferred. If there is still an amount owing on the
mortgage after the estate is settled, the new owner may discover an unwelcome
surprise: The new owner may also have inherited mortgage debt.
Due On Sale Clause
What some don’t realize is that you might be required
to either pay off the mortgage or sell the property if you are unable
to get financing yourself.
This happens when there is something called a
due-on-sale clause is included as part of the mortgage or any refinance
agreement.
This clause in a loan or promissory note stipulates
that the full balance of the loan may be called due (repaid in full) by
the lender upon the sale or transfer of ownership, including
inheritance, of the property used to secure the note.
The Cost Of Inherited Property
Even if you received this property free and clear of debt, the
unfortunate reality is that you will have to decide relatively quickly what to
do with an inherited home.
Most people know that a vacant house is just
inviting trouble. Apart from potential vandalism or squatters, a property needs
constant monitoring for issues that may be caused by the weather or just normal wear and
tear on systems like plumbing and ventilation.
The Emotional Turmoil of Inherited Property
Before you can do anything with the property, it will need
to be cleared out of any remaining belongings. This in itself may be
challenging for you and your family.
Sometimes clearing out the possessions of
a loved one who has passed can be emotionally crippling. There may be disagreements or resentment about who gets what.
You may, at first not realize that emptying out this
inherited house may bring up many emotions and reminders associated with the
death.
It takes time and strength to go through all the possessions.
In the
case of large families, deciding who gets what of the remaining possessions can
be very time consuming and emotional.
In some cases, families find they cannot handle the stress
that comes with cleaning out inherited property. They become emotionally paralyzed
and may not be able to resolve the situation for months or years.
This holding pattern can be very costly not
only in terms of personal wellbeing, but also financially as the house still must
have maintenance, taxes, utilities, and insurance paid on the vacant property
in the interim.
The Prudence Of A Home Inspection
Depending on the condition of the house, you may wish to
have it inspected by a certified inspector. It would be a good way to learn
more about the property you now own.
This inspection would be important to
determine if there is any hidden damage, such as foundation issues, mold, fire
hazards or crumbling plumbing. It may also be wise to have it checked for necessary
upgrades, such as replacement of an old or damaged roof. It may even be helpful
to check on outdated features such as old heating or air-conditioning systems,
or an old hot water heater.
You may be tempted to hold off on this inspection until you decide what
you plan to do with your property. Knowing the condition of your property is
important to avoid any potential risk, damage, or loss. In this way you will know
and be able to plan and calculate any additional costs for ownership.
Three Choices For Inherited Property
Once all the contents have been removed from the house and you
have a report on the condition through an inspection, as the new owner you will
realize you have three options regarding this property. You can:
- Move in
- Rent it
- Sell it
Moving In To An Inherited Property
If you are the sole owner of the property, moving in can be
a great option if you don’t already have a home. Even if you do, you now have
the choice to sell your old house and move.
Before you move in, make sure that you will be able to live with any reminders or memories of the previous owner. Consider this very carefully and honestly.
Those who are renting a home may not realize that homeownership
comes with many responsibilities. You may be surprised to find that owning a
home is expensive. Taxes and insurance, combined with regular maintenance and
utilities can be a considerable expense -- even if you're not paying a
mortgage.
If you inherited a property out of state or in a different
city, this may not be a practical solution, unless you were already planning to
move there.
If you are splitting the ownership with siblings or other
relatives, moving in may not be an option. In this case you may need to choose
from the other two possibilities: renting or selling.
Renting Out An Inherited Property
If you are sharing ownership of inherited property, or it
isn’t in a location you wish to live, you may want to rent out the house until
you decide what to do with it.
Renting the house to someone else may be a good solution. It
can provide some monthly cashflow income that will offset the cost of ownership.
Once you have cleared out the house, it will need to be
prepared for rental. This may simply mean a good cleaning, but more often, a
house requires repairs and renovations to be attractive to the modern rental
market.
You need to be aware that you will still be responsible for maintenance,
taxes, and any repairs.
In addition, if you do not choose a responsible tenant,
you may be left with devastating damage and costly repairs once they leave.
It
may also be possible that there will be vacant periods in between tenants when
you will need to assume all expenses.
You will need to decide if using the house as a rental is
worth your time and effort with the property. You may realize that this type of
management is not something you wish to take on. This is especially true when the property is out of town, or out of state.
In this case, you are left
with one last option. Sell the property.
Selling An Inherited Property
You may find that neither of these two options will work for
you.
You may find that selling the house is the easiest way to
move on with your life.
This is especially true if you have inherited mortgage debt,
or are not the sole owner of the property. Selling the house will liquidate any
equity so that you can use the money as you wish or divide it with the co-owners,
so you may go your separate ways.
Most people think the only way to sell a house is through a
real estate agent. You may have heard that you need to renovate it to have it
sell. This is likely true if you are listing on the open market. Your property needs to be in a similar condition to other comparable properties in the area if you want a quick sale.
What you may not realize is that you can sell your inherited
house without putting it on the open market.
In fact, you don’t
need to clear out the possessions, have it inspected or renovate!
Selling a house “As-Is” may be the best solution for
inherited property. It frees you from all the time and cost associated with selling
a house.
You don’t need to go through the mental anguish of removing the contents of the departed
owner. Simply take what you want, and leave the rest. We will take care of removing it.
You don’t need to concern yourself with the condition and any problems.
You don’t need to fix anything or renovate. We understand that the property may not be perfect. We like them that way!
You don’t need to pay realtor’s fees and you most
certainly don’t need to furnish and stage it and wait for fussy buyers to go
through with the sale! We are ready to buy your property with cash on the day of your choice.
It is a great way to have all the cash benefit from an
inherited property without all the work and anguish. By selling the inherited house
as is, you can continue your life with a minimum of further disruption.
You receive a fair cash offer and you choose the day you want to complete
the transaction. No stress or pressure to accept anyone else’s time frame. No
worries about whether the buyer will qualify for financing, or back out of the
deal.
To learn more about selling a property you don’t want in an
easy and stress-free way, contact us!
Conclusion
Inheriting a property may be a blessing following the loss of a loved one, but it also comes with responsibility. With the property you may have also inherited mortgage debt. It may not be in top condition and might require costly repairs.
Whether you are the sole inheritor, or it is given to several people, one thing is sure: It cannot remain empty for long without developing some issues.
Depending on the specifics of your inheritance, you have the option to move in, rent it or sell the property.
If you don’t want to deal with it at all, you can sell the property As Is and take the money.
If selling an inherited property isn't something you can deal with right now, we can help.
If you have come to the realization that it is time to sell now to have a better life, we can help you. If your inherited house isn’t ready for market and you can't afford the expense to get it ready, we can help.
If you have come to the realization that it is time to sell now to have a better life, we can help you. If your inherited house isn’t ready for market and you can't afford the expense to get it ready, we can help.
If you are already juggling too many responsibilities to sell your inherited property by yourself, then there are people who specialize in the sale of properties "as is" - usually within a week to resolve the situation quickly. We have a team of professionals able to assist you immediately.
Contact us for details.
Turn Your House To $OLD!
