By Sandra Kilgore, GRI, ABR, SFR
Yes, dealing with inherited homes can not only be tricky, but downright difficult.
Usually there are many complicated issues that need to be addressed. It is not uncommon for the person selling an inherited home to have a sentimental attachment to the property which makes selling it an emotional and overwhelming decision.
However, in the long run there are several benefits to selling an inherited property. In some cases, along with inherited properties, the heirs end up inheriting a lot of unexpected issues, commitments, financial and legal complications. It does not matter if you are a single heir or one of multiple heirs, selling it as quickly as possible is a great way to save a lot of money, time, stress and the tiring efforts involved in the settlement process.
When there are siblings or family members who shares the property with you as legal heirs, there might be some disagreements as to how the settlement should occur. Therefore selling the property could save you time and hassle, and the proceeds could be easily distributed between the heirs.
If the house is underwater, meaning that is not worth the amount that is owed, then it is recommended that is sold as quickly as possible. A short sale of the home can come to the rescue if mortgage payment are due and you are not willing or unable to pay. If one of the heirs are in urgent need of funds, then a quick sale may be an option. However, selling it on the open market may be a better option if time is on your side.
If the property is located in another city or state, assuming the responsibility of maintaining a vacant house can be real burden that you may not be prepared to deal with. If the property goes into probate, the property has to be maintained, even if there is no one living in the home. Then of course, there are the issues with paying property taxes, insurance premiums, utilities and home owners fees in some cases. Depending on how long the probate period lasts, families need to pay for the maintenance of the home, along with the legal fees connected to the property.
Also, at the end of the probate, you will have to once again incur the hassle and expenditure of repairs and selling the home. Under such conditions, if your benefits are lower than your hassles and commitments, it is advisable you sell the home to an investors.
Disputes among the siblings or legal heirs over the settlement of inherited property are very common. Often disputes over a property are dominated by past issues of sibling rivalry. During the the absence of parental guidance, adult siblings are left to face the uncertainty of their rightful role.
Family members need to make sure that disputes and disagreements do not lead to litigation because this only worsens the situation. The tremendous cost involved in litigation is certainly a wasteful expenditure that needs to be avoided. The biggest loser in this scenario are the heirs to the property.
This situation can be avoided. There is always a solution than can be made for a peaceful settlement. There are creative solutions that can be used to facilitate a mutual understanding and a gain for all those concerned.
One good solution is for one of the heirs to buy the property from the others. If you inherit the home with your sibling, the rule is that it is evenly split unless otherwise stated in the will. If one of the siblings is interested in keeping the property while the other wants to sell, then the sibling interested can buy out the other. The cost involved in this process is minimal and includes the appraisal and closing cost. If the sibling is unable to qualify for a mortgage, the sibling that does not want the property can finance the property. This will provide him monthly income over a longer period of time. Please be sure to consult with an attorney to draft documents so both parties will be protected.
It seems, looking at this from many different angles, selling an inherited home appears to be the simplest way to deal with an inherited property, but in some situations not necessarily the best solution.
Sandra Kilgore GRI, ABR, SFR