What to Do With a Home You’ve Inherited
The death of a loved one is one of life’s most difficult challenges. Coping with grief and loss and heartbreak alone are overwhelming and take time. When a deceased family member leaves you their home, their generous gift can cause stress on top of heartbreak when you must determine what to do with the inheritance.
What are my options when inheriting a home?
There are four simple options: move into the inherited home, rent it out, sell it, or just let it sit unoccupied. While keeping the home unoccupied may sound unfavorable, there is often a transition period after the benefactor’s death in which the home is unoccupied while the new owner sorts through personal belongings of their deceased loved one, cleans the home, assesses its value, and takes time to decide what to do with the property.
The emotional labor that goes into these steps while grieving is not insignificant, and leaving the home unoccupied becomes a financial burden when this transition period is dragged on longer than necessary. Even when the inherited home is left empty, the mortgage still needs to be paid, as well as insurance, taxes, and utilities. Issues like lawn maintenance and keeping the exterior of the house secure still linger.
No matter which choice you make, it’s important to make a decision and get moving on it.
What are disadvantages to moving into my inherited house?
If you are a renter or own a home smaller than the one you’ve inherited, moving into the home may seem like the obvious solution. Before you call that moving company, take time to consider the factors that accompany a move into the inherited house.
The first is the mortgage. If the house is still under mortgage (or worse, is mortgaged for more than its market value), make sure the payment is something you can afford. Another big financial factor to weigh is taxes. Depending on which state the home is in, and its value, taxes can be an expensive and confusing burden to work through. You won’t inherit your loved one’s insurance policy along with the home, either, and you’ll need to research, apply, and pay for your own policy. Many insurance companies allow the policy of a deceased homeowner a grace period for a brief time immediately after their death, but the time limit varies. Make sure to contact the current insurance company for details. If the new insurance company requires an inspection prior to insuring the inherited home, the inspector may uncover costly repairs that would need to be completed before they would insure the home.
What about the mortgage on the home I inherited?
If there is a mortgage on the home, you may be able to take over the payments and have the mortgaged transferred into your name. If your loved one had a reverse mortgage, payments cannot be given to an inheritor. You’d have to refinance the home in this case. Many mortgage companies will also require refinancing the inherited home if you plan to rent it out.
What kind of taxes do I have to pay when I inherit a home?
Taxes on the inherited home depend on many factors, including the state the home is in, whether you move into it or sell it, and the value of the home. In Oregon, for example, an estate tax is generally imposed when the net value of the total estate exceeds $1,000,000. If you sell your inherited home, you will have to pay a capital gains tax based on the property value on the date of the death of the owner. More information about the stepped-up basis can be found at the IRS website. Make time to meet with an accountant or other tax professional to ensure that you have all your financial ducks in a row before choosing what to do with your inherited home.
What else should I look out for?
Often a group of siblings inherits a home, adding another layer of complication to the inheritance process. This can start feuds if there are disagreements or delay in decisions made about the property. Be prepared to address the issue firmly but kindly as emotional attachment to the home and grief weigh heavy on everyone’s minds. If you and your siblings decide to rent out the home and split the income it generates, up comes a laundry list of added responsibilities, including preparing, insuring, repairing, and maintaining the property—not to mention finding and doing the paperwork to keep a suitable tenant.
I just want to sell my inherited home without stress. What’s next?
It is possible to sell your inherited home quickly and without the stress of updating the property, finding a realtor, and scheduling showing after invasive showing. Property Max offers a lightning-fast buying process so you can focus on your life. We buy homes in any condition, saving you the headaches and financial burden of repairs and updates. To sell your inherited home fast, simply submit your information in our no-obligation offer form, and we’ll contact you right away with a fair market offer. We know how difficult it is to process all these decisions while grief-stricken, and thus offer a grace period after the sale of the home to give you the time you need to sort through your loved one’s belongings and to grieve.
When death causes the loss of a parent or grandparent, emotional stress and sadness take the forefront, making decisions about your inheritance tricky. Give it some time, weigh your options, and make the best decision for yourself and your family.
Fascinating. I previously just considered using zillow, but this makes me rethink my approach.
Thanks for sharing the informative post. As we know lots of people have confusion about what they do with their inherited property. I think after reading this blog they cleared what to do with their inherited property.