Inheriting a home from a loved one can be a confusing matter. Most likely, your loved one left you the property believing that it would benefit you in some way. But, a lot of the time, heirs to houses don’t just end up with a home. They also encounter a whole lot of unexpected complications along with their inheritance. Whether your objective is to rent out the home, move in, or sell it, you should make sure you do your research and choose the option that is best suited for you, your family, and your community.
Assuming the Mortgage
If you’ve recently inherited a home from a parent, you can most likely assume the current mortgage if you have decided to live in the home. However, if you plan to rent the house out to someone else, you will probably have to refinance the property in your name. If your parent took out a reverse mortgage, you will not be able to assume the mortgage. Before you make the decision to live in the home or rent it out, make sure you can afford the mortgage, taxes, and other expenses involved with owning a property.
If you are in a situation where you’ve inherited a home with your siblings, you should know that California law considers multiple heirs to home as “tenants in common.” With this distinction in place, any heir can decide to force the sale of the home, whether or not all parties are in favor. This usually occurs when there is a disagreement about what to do with the property and one party is strapped for cash. It’s unfortunate how devastating the death of a parent can be for everyone involved, and it is in the best interest of the siblings to have open lines of communication, especially when it comes to dealing with an inherited home. Without a mutual agreement about what to do with the property, siblings are often faced with an often expensive and lengthy process that usually results in them having to uphold an empty home for a much longer time than required.
When it comes to inheritance, California does not have an “inheritance tax.” But the state does have a couple of special tax-related laws that affect the beneficiaries of an inheritance. To be completely informed about your current situation, please visit the Law Dictionary website for more information about California’s inheritance regulations.
In the event that you inherit a home that is not worth as much as is owed, or, if it is at risk of foreclosure, you may be able to file a written disclaimer stating that you are refusing the inheritance of the property. This action must be taken swiftly upon the passing of your loved in order for it to be valid. And, if you benefited from the proceeds of the home in any way, you will not be able to file this disclaimer. Another thing to consider is that once you have disclaimed your inherited property, you cannot reclaim it in the future. Use this quick checklist to see if disclaiming your inheritance to a property is a good idea. If you answer yes to any of these questions, you may want to consider disclaiming the inheritance:
- The property you are inheriting is in such bad condition that it would cost you more than the house is worth to repair it
- The property taxes are very high
- You are not in the financial position to afford the mortgage
Pros and Cons of Selling to an Investor Versus a Real Estate Agent
If you have done your homework and have decided to sell your inherited home, there are a few choices available to you. You can go through a realtor and attempt to sell your home that way, or, you can request an all-cash offer from us. Either option is going to have its pros and cons, it really just depends on which situation is right for you. You may want to go through a realtor if:
- The home does not have a mortgage
- The home does not need any repairs or cleaning and is in move-in condition
- You can afford the home repairs needed to sell it
- You are financially capable of paying the taxes and fees associated with selling a home
- You are in the position to wait months, or even years for a buyer to come along
Conversely, you may want to talk to us about an all-cash offer for your property if:
- The house is worth less than is owed
- The house is in poor condition and would require a lot of repairs that you just can’t afford
- There are mortgage payments due and you do not want to pay them, or you are unable to afford them
- You inherited the property with your siblings, and you want to acquire money for the home as fast as possible
- You or your sibling is in dire financial need
- You don’t want to deal with paying all of the fees involved with selling a house through a real estate agent (commission, closing costs, and other fees)
- The home you inherited is in another city or state and you can’t be responsible for maintaining the property
- You stand to benefit on taxes from selling the house rather than keeping it
- You don’t want to deal with any of the hassles associated with the house and you want to quickly move on with your life.