Five Things You Need to Know about Inheriting Real Estate
by Ted Ricasa on Dec 10, 2013
Dealing with the loss of a loved one is a heartbreaking ordeal. If you find yourself inheriting real estate from a family member, you may have a lot of questions about what to do next. After all, a number a difficulties and financial issues can arise following the inheritance of real estate property. To help you navigate this trying and confusing situation, Fast Home Help discusses five things you need to know when inheriting real estate.
1. You can usually take over the existing mortgage of an inherited home.
Many people decide to live in the inherited home, and in most cases, the bank allows them to take over the existing mortgage. If the house has a reversible mortgage, then you may not be able to take over the mortgage. However, others prefer to rent out the property. If you decide to convert your inherited property into a rental property, you must refinance in your name.
2. If siblings inherit real estate, one sibling can often force a sale.
In many states in the US, if multiple siblings inherit a home, they are considered "tenants in common". As a result, if a disagreement occurs over what to do with the home, it just takes one sibling to force a sale. If you contest this, a long and drawn out process can await you and your family. It's best to arrive a consensus between you and your siblings.
3. Some properties may be susceptible to additional taxes.
If the inherited property is worth more than 5.25 million dollars, you may be required to pay federal estate tax. A few states also require an inheritance tax, which will be split among the inheritors.
4. You may want to request a fast cash quote if the home is "underwater."
If you want to sell the house, do you go through traditional routes or do a short sale? If the house is paid for, in good shape, or you can afford the upkeep and payments, selling through a realtor may ensure you get the most for your home. However, if the house is in poor shape, underwater, or you can't afford the upkeep for the months necessary to guarantee a sale, you may consider receiving a fast cash quote and doing a short sale on the home.
5. In some cases, it may be in your best interest to disinherit the home.
If a house is in poor condition, requires high property tax, or underwater, you may need to take a good look at your financial situation. In some cases, inheriting a home could become a massive strain on your budget. In these scenarios, you need to disclaim the inherited home.
About Fast Home Help: Our real estate professionals at Fast Home Help will provide you with the information you need, when you need it the most. To learn more about the value of your property, request a free, no-obligation Property Privacy Audit™ today.