If you’ve inherited a home, you really have 3 choices: live in it, sell it, or rent it out. Some individuals will move into an inherited home and sell their own properties that they’ve been living in. Others will rent the home out and sell belongings through an estate sale. Here are some key factors in deciding the right option for your situation.
Understanding the value of the property is the single most important factor in making sound choices. There are a number of online tools that will predict the value of your property. But keep in mind that these estimates can vary greatly depending on the condition of the home, especially if the property hasn’t been updated or well-maintained, needs significant repairs, or is cluttered with stuff.
Many times, inherited homes come with an outstanding loan obligation or liens such as a mortgage, HELOC, or tax bills. Assuming there is equity in the inherited property, then loans and debts would be settled at closing of the sale. So it’s important to understand the things that will be deducted from your equity.
The number of individuals that are inheriting property can alter the process greatly. Conflicts may hinder a successful sale, or even affect even the buyers in the future. Be sure that the executor of the deceased’s last will and testament has full authority to liquidate the estate which can include the home. If the deceased died without a Will, known as “Intestate”, you may have to mutually agree with other heirs to sell or keep the property.
Getting clarity on those three areas will make it much easier to decide what to do with the home. And in the meantime, be sure you track down the documentation for things like the homeowners insurance and utilities, and ensure that the mortgage and property taxes are being managed.
Note that oftentimes property taxes will increase when the property changes ownership. For more information on deciding what to do with your inherited home, check out this great article from the AARP.