I Inherited A House – Now What?
Inheriting real estate from a loved one comes with emotional attachment and also financial responsibilities. Depending on your family dynamic, you will always have three options to weigh in when you start considering what to do with an inherited house.
Each of the three options has its own pros and cons and, in this guide, we are going to review each of them to help you pick the best option.
Move into the Inherited House
Rent the Inherited House
Sell the Inherited House
Move Into The Inherited House
The easiest option is moving in and making your inherited home your primary residence. However, there are some legal, emotional, and financial implications that you need to consider before making this decision.
Pros of Moving into the Inherited House
- You will maintain the legacy and preserve family memories if it’s a home that has been passed on by other generations. You can decide to keep the tradition going by making it your primary residence.
- If the property is owned free and clear, you could save the cost of paying a mortgage and rent.
- Moving into the house would make it easier for you to go through all the personal items, since you could do it at your leisure. If you decide to sell or rent it, you will need to clear out the personal items.
Cons of moving into the Inherited House
- Keeping an inherited house comes with financial obligations that you must consider whether you can afford it or not. You must factor in your new costs, i.e… mortgage costs, home insurance, property taxes, homeowner’s association costs, and utilities.
- Repairs – This could be very costly, especially if the house hadn’t been maintained.
- If you inherited the property together with others, as is the case with most family properties, you may experience a challenging time when trying to agree who will occupy and or what should be done with the house.
- The house may not be conveniently located to your employment and schools, making living it in not practical.
Rent The Inherited House
If moving in is not an option, you can consider turning your inherited house into a long-term rental property or vacation rental.
Pros of Renting an Inherited House
- Renting an inherited house can be a good source of passive income.
- Renting an inherited house keeps it in the family for future generations.
Cons of Renting an Inherited House
- You will need to make repairs – which again, this could be very costly, if the house hadn’t been properly maintained. This will include removing all personal items and cleaning the interior and exterior.
- There are monthly fees associated with renting a property, regular maintenance, property inspections to verify the property condition, insurance, mortgage fees, taxes, homeowner’s association, fees of that nature.
- Managing the property yourself would save you 12-15% monthly in property manager fees, but be prepared to take calls at all hours of the day and night when tenants have emergency repairs.
Sell Your House With An Agent
When you decide to sell an inherited home in Southern California, one of the options to choose from is working with a real estate agent by listing your home in the traditional market.
Pros of Selling an Inherited House with an Agent
- You get to sell your home at full market value, based on condition and updates.
- You will get a lump sum payout amount.
- The agent will handle all the negotiations on your behalf and reach out to potential buyers until the home is closed.
- The agent will handle all the required disclosures and transaction paperwork.
Cons of Selling an Inherited House with an Agent
- You may need to make repairs and improvements to your inherited home before you list it and this can turn out to be an expensive affair.
- The agent commission is 5-7% of the home’s total sold value, as well as other fees involved with selling the house.
- Your listing may take a while before you get a serious homebuyer, once you get one, you start the escrow process.
- The buying process is: contingent on a favorable home inspection, you may need to negotiate more repairs after the inspection, contingent on the appraisal, if the value comes in lower than the offer, you need to renegotiate the sales price, and lastly, contingent on the buyer getting full loan approval. Yes, buyers don’t always get a loan and then the process starts all over again.
- A realtor usually serves multiple clients, and you might find yourself in a situation where your listed inherited home is not getting much-needed attention and exposure especially when the agent is busy. This can lead to frustrations and a delayed home sale.
Sell Your House To A We Buy Houses Investor
If moving in, renting out, or selling through an agent are not practical options either due to the cost of maintenance or stress that comes with co-owning an inherited property, the next best option is to sell the house to a real estate investor. There are many benefits of selling an inherited home as outlined below.
Pros of Selling an Inherited House To A We Buy Houses Investor
- A real estate investor buys the inherited home in “as-is” condition thus, relieving you the burden of repair and regular maintenance.
- Selling your inherited home to an investor is often the best option if you can’t afford to pay for a new home mortgage, insurance, property taxes, and other associated costs.
- Selling to an investor for a cash offer guarantees a faster home closing thus helping you move on faster. Most cash buyers allow you to pick the date you want to close.
- We buy houses cash buyers do not charge a commission or hidden fees and most of them pay your seller’s closing costs.
- We buy houses cash buyers will not require you to clean. Most will let you leave the items you don’t want and will handle the rest for you.
Cons of Selling an Inherited House To A We Buy Houses Investor
- You may not get full value of the property. Usually, the formula the investors use is an after-repair market value. This will include repairs that need to be done to update or rehab the property, holding costs while the repairs are being completed, their selling costs, and their profit. The bottom line with a ‘Sell my house’ cash buyer is the difference between the profit with an agent and how much your time is worth and the hassle that comes with the traditional sale.
If the property you inherited has to go through the probate process, that process could take up to 12 months to complete, based on its complexity, all the while, you are maintaining the monthly costs and repairs. Please consult an attorney for more information on the probate process
We Buy Inherited Houses for Cash companies understand that sometimes selling your house can be a hassle. They want to make the process as easy and straightforward as possible. There are many benefits when compared with other options in today’s market – the biggest one being avoiding paying commissions, fees or making costly repairs.
If you are considering selling your home in Southern California, We Buy Any House In California is here to help! We are dedicated to offering you the best and highest offer while providing any additional help you need no matter the condition, reason, or situation. Please visit our How It Works page for more details on how we calculate offers and our About Us page if you would like to know more about us.