If you are inheriting a house then it probably means that you have lost someone very close to you. It is an emotional and confusing time and the last thing you may want to think about is dealing with financial issues. It’s a huge responsibility on top of everything else you are dealing with.
Eventually, you will want to move forward and that means considering what to do about the property. While the house may be linked to a lot of fond memories, you can’t let nostalgia be your only guide. Ultimately your choices on how to handle the property should be made by taking into account any financial benefits or consequences attached to any decision.
Of course, you should seek expert advice when navigating all of the legal and tax requirements that need to be met. They can vary greatly depending on the state you are in and are dependent on your individual situation.
Here are some things to consider if you have inherited a house
Basically, there are two choices when it comes to what to do with the property you have inherited.
#1 Sell the property
#2 Keep the Property
Selling the property might seem pretty straightforward at first and it may, indeed, be the most expedient way to handle the situation.
You might inherit a mortgage with the property. If so you will need to contact the loan servicer and research any particulars of the transaction.
For example, is there a cosigner on the loan? If so then they are responsible for continuing the payments following the owner’s passing. If there is no cosigner you will need to supply the servicer of the loan with a death certificate and verify that you are the new rightful owner of the property. In which case you will need to either pay off the mortgage or assume the responsibility yourself.
When a clear title has been established for the property, and all owners are in agreement, then it becomes necessary to pay off any liens on the property before you can sell it.
After this, it merely becomes a matter of fixing up the place and hiring an agent to put the house on the market or contacting an investor that will want to buy the property in as-is condition.
You may have several reasons for keeping the property. Perhaps you want to live in it yourself or save it for another member of your family. You might even be considering fixing it up and using it as a rental property, to bring in a little extra income.
If you do decide to enter the world of the landlord, remember that your responsibilities will multiply far beyond simply taking care of the monthly mortgage payment and collecting rent every month.
It will be up to you to keep the property in good condition, to market the house and locate good tenants, and address any maintenance issues the renters’ encounter.
Financially, you will still be responsible for taxes, insurance premiums, and paying off the mortgage loan.
What if you aren’t the sole heir to the property?
If you inherited the property along with anyone else, for example, your parents left the property to all of their children, there may be more complications. If all of the new owners are not in agreement on what to do with the property you will have to come to some sort of final decision that satisfies everyone involved.
If you think you would be good at the landlord role and want to keep the house as a rental property, but your siblings just want to sell the house and be done with it, you could think about refinancing the house and buying out the other heirs. This way you become the sole owner and your siblings get to sell their stake in the property.
If the house is a vacation home you will want to set up a process of sharing the house. On the other hand, you might want to partner with your siblings and set the house up as a rental, then you will want to be very clear about each person’s responsibilities and what share in the profits will be.
It’s up to you to make the best decisions for your family
Losing a loved one is never easy and the extra burden of dealing with their home can make this time seem even worse.
You should try and remove your emotions from the financial decisions. Whichever direction you choose, you should gather all of the information you can and approach the situation with the best outcome for everyone’s financial need in mind.