Inheriting A House In Austin, TX
Inheriting a house involves mixed feelings. On one hand, you have got a new house that you can live in or rent out to improve your lifestyle. On the other hand, you have to deal with the death of a loved one. In this situation, it may not be easy for you to make financially informed decisions, especially if you have lost one of you parents.
However, if you have a plan in place, you can make a better decision while coping with the loss of a loved one.
Inheriting a House
At the time of inheriting a house, you may have a lot of questions on your mind that you may not have the answers to.
- How to claim my inheritance
- What should I do if the house is in bad condition?
- Should I move into the house or get it sold?
This article will give you the answers to these questions. While you are going through the process of inheritance, you should be ready to make a number of emotional and financial decisions.
Although the process is quite straightforward, you may be overwhelmed, especially if you have no idea how to go about inheriting a house. Before you go ahead and sell or rent out your inherited property, be sure to go through the probate process with patience.
In case you don’t know, probate is a legal process that helps settle the matters associated with an inherited property. You may have to work with seasoned professionals, such as lawyers and real estate agents to pay off debts, if any, and transfer assets.
In some states, you have a summary probate, a simple version of a probate, which is a faster process and leaves out litigation. But keep in mind that this summary probate is for small estates that don’t exceed the limits set by the state. If your property exceeds the maximum limit, you will have to opt for the regular probate process.
After passing through the probate, you can do whatever you want to your property. But the question is, what is the best for you? The majority of people choose from three common options:
- They move to the new house
- They rent it out
- They put it on the market
While you can benefit from all the options, we suggest that you evaluate your property to make the best decision for your financial wellbeing.
You may feel the temptation to move to a new house as you may have emotional attachment to it, especially if your parents lived in that house. Moreover, it may also seem the best decision if you already are a renter and are looking for a house of your own. But this may not be a good option for you if you are already struggling to pay a loan or you already live in a spacious house.
Renting out is another good option. This is often the case when people have an inherited house in Austin TX. It’s true that renting out a house can earn you a steady stream of income each month, but the maintenance expenses can be overwhelming.
It’s the responsibility of the landlord to upgrade a house before renting it out. And they also have to pay for the maintenance expenses later on. Since old homes are not generally in good condition, renting it out may not be a good choice. Unless you are a risk taker, renting out this type of house is not worth it.
Lastly, you can choose to sell your house provided you have carried out the home evaluation.
Repair expenses
By selling the inherited house, you can pay off your loan and pay for the major repairs that the house may need before you put it on the market. If too much repair work is needed, you may consider selling it as-is to a reliable real estate investment firm, which can be a speedy process.
While it takes some time to get the repairs done, you can get it sold at a much higher price later on.
Other Expenses
Aside from a house, your loved one may have left behind a lot of other things, such as money, motorboats, vehicles, collectibles, and family heirlooms. It may sound great to have these things in your possession for free. But there is a catch: the deceased may have left behind some expenses as well.
As an heir, you need to know that taxes are also associated with an inherited house. While the tax rules vary state-to-state and there can be exemptions too, you should be ready to pay something in tax before claiming the property.
Actually, you can benefit from step-up in basis. You inherit the property at a fair market value, which means you pay tax based on the appreciation value of the house once you have inherited it. After making small upgrades, you can avoid paying a huge sum in capital gains tax.
Here is another problem that you may need to deal with: an inherited property with a mortgage. Will you have to assume these expenses at the time of inheriting the property? If you want to rent out or move into the new property, you will have to pay the expenses associated with it. During the probate, if you choose to sell the house, you will have to use the money to pay off the mortgage.
In another scenario, if you don’t want to sell the house, you will have to “own” the mortgage and continue to make payments until you have paid off the loan. Not making the payments will put your house at the risk of foreclosure. In some cases, heirs have to sell the house because of the mortgage payments.
Even if you want to sell the house, other expenses still need to be paid, such as general maintenance, utilities, liability insurance, and property taxes, to name a few. Unless you have a big saving account, you may not be able to lift this additional burden. So, if it’s a big property that will cost a big deal of money, selling the inherited house can be your best option.
Multiple heirs
While managing inherited real can be hard, managing one with multiple heirs can be much harder. If all of your siblings agree about what to do to the house left by your father or mother, there won’t be any problems in the process. But you do have a problem to face if one of the heirs have different plans.
If there are multiple heirs, all of the assets left by the deceased will be divided evenly among the heirs. This is more important especially if there is more than one person mentioned in the will. In this case, each person will have rights to the property. Tenancy in common is a term used for these joint-heirs. Since each heir will get a percentage of the price after the house is sold, they can use each and every place or things in the property. While this can be a great solution for heirs if they choose to live in the house, problems can occur if one or more heirs refuse to share the house.
In this situation, you need to sit with your siblings to discuss all the options. This way you can find a way out. If you fail to reach an agreement, legal action may be sought. However, this is not recommended as it may involve a lot of time, money and effort.
The loss of a loved one may leave your drained, and the taking care of the legal matters associated with inheriting a house may add to your stress. But if you read up on the litigation process and consider all your options, the process can become a lot easier. Know that inheriting a house in Austin, TX shouldn’t be taken as a financial burden. If you have a solid plan in place, handling the property of your loved one will be a much easier task for you.
We Buy Inherited Houses in Austin, TX
If you have an inherited house to sell, you can call us to get a cash offer. You can sell your house fast as we try our level best to close deals within a few days. Call us at 512.710.6201 or email us at info@ReimagineRealtySolutions.com.