When someone inherits a home, the first question they usually ask is, "Now what?" It can be an overwhelming situation. After all, what to do with a home you've inherited is not only a financial decision but also an emotional one. Chances are, you have a lot of memories in that home with the loved one you inherited it from.
Our real estate agents are here to help. Here's what you need to know about inheriting a home and the steps you should take to make the process as seamless and stress-free as possible.
Options When You Inherit a Home:
Arguably, the biggest consideration when you inherit a home is what to do with it. Ultimately, you have three options:
- Live in it. Occupying the house keeps the property in the family, so it's a great option if you have an emotional connection with the home. It can also be an economical option if there isn't a mortgage attached to the house.
- Rent it out. A home you've inherited can become a source of passive income if you keep it and use it as a rental property. That being said, renting out a property comes with its own set of challenges and responsibilities, and becoming a landlord isn't for everyone.
- Sell it. Selling a home you've inherited is the quickest way to turn it into a financial gain, assuming that the home is in fit condition and is worth more than the mortgage after any repairs that may be required.
What to Do When You Inherit a Home
The legal process after inheriting a home varies. Typically, your name won't go on the title right away. Step one involves a probate court judge, who will review the will of the deceased and approve an executor who carries out the will. Here's how the steps you should take typically go:
- Talk with the executor. The first person to consult with is the executor of the will of the deceased. This individual can look into insurance, identify any liens on the property, address any issues with utilities, order an appraisal, research property taxes and allocate belongings of the deceased.
- Find out if there are any co-inheritors. Are you the sole inheritor, or did you co-inherit the property? If there are co-inheritors, typically other family members, they will all have to be part of the decision-making process. All the heirs have to agree before the property can be sold.
- Have the property appraised. If the executor already got an appraisal, then you can skip this step. If not, you should have the home appraised. Knowing the property's value will be helpful in deciding how to move forward.
- Assess any debts. Is anything owed on a property? It's common for an inherited property to have a mortgage, and in most cases, the mortgage can be taken on by the heirs. Another important consideration is whether there are any liens that claim the property as collateral or if there are taxes owed on it.
- Talk with a professional. Before making a concrete decision about what to do with a house you've inherited, it's always wise to consult with a professional financial advisor. An advisor can help you determine if there are any debts associated with the house and work with you to clear any complications.
Contact us today to learn more about home ownership in the Chicago area. Whether you're looking to buy or sell a home or you've inherited a home in one of these Chicagoland neighborhoods, our real estate agents are here to help every step of the way.
