You just inherited a home.
Inherit a Home
Financially speaking, this is usually a good thing for you – even though you probably just lost a family member, . However, this is not always the case.
Most of the time in this situation, you have the option to move in and make it your home. In fact, you could also sell it.Conversely, you could also turn it into a rental unit and turn it into a good investment. After all, as the heir, it becomes your property as soon as your relative passes on. As a result ,you can do as you want with the property. If the property has equity, you can simply sell and pocket the cash. But what happens if the property doesn’t have any equity?
You definitely need a plan.
Indeed, this does, and has happened. It may be that there’s a mortgage with a balance due which exceeds the value. Or there could be a lien on the property that must be paid before you can sell. And possibly,the lien may exceed the value of the property. Additionally, with the proliferation of reverse mortgages, this is also a major cause of negative equity.
When you inherit a home, you’re now the owner. As a result, you’re responsible for every cost associated with the property. Taxes, home owners association fees both current and past due, If you sell you are also responsible for selling costs.
What’s the solution
If you’re in this unfortunate situation, you have a few possible solutions. One option is to legally disclaim your interest in the property. This would legally remove you from the inheritance and pass it on the next heir in line. However, this just passes the problem to the next person, who is probably another family member. And would you want that hassle?
However, what is possibly your best solution would be to offer the property to the lien holder. Quite often they would be willing to take the property to avoid the expense of going through the foreclosure process. My best advice is to contact a real estate attorney to investigate your legal options and liabilities.
When you’re ready to either buy or sell a home, please contact us.
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