Key insights:
- Losing a loved one can be even more emotionally fraught when you inherit property
- Those who inherit property must decide if they should accept or refuse the inheritance, and whether to rent out, live in or sell the property
- If you inherit a property with other family members or friends, there are more factors to consider
When you inherit property from a lost loved one, it can be tricky to navigate the emotional waters ahead. Here are insights you can use as you decide how to accept or refuse the inheritance, and whether to live in, rent out or sell the property.
Should I accept or refuse the inheritance?
It may seem cruel to refuse an inheritance, but when someone puts you as an heir to their property — whether that property be a cherished painting or a single-family home — the intention is for you to benefit in some way. In some instances, if the deceased owes more on the mortgage than the home is worth or there are other taxes or liens on the property, you could end up losing money by accepting your inheritance.
To make sure that doesn’t happen, work with the executor of the estate and a trusted real estate expert to understand the condition of the home, its value and any money that may be owed on the home. From there, you can determine if you want to accept or refuse the inheritance.
Selling the property
If you do not plan to live in the home or rent it out, you’ll likely want to put it on the market. In this case, it’s critical to determine if you want to fix the home up or sell it in its current condition.
Inherited homes run the gamut — for some, Grandma was an interior decorator who updated constantly and for others, dust is collecting on the pillow shams from 1967. And while condition matters, location can make an even bigger difference; even a hopelessly outdated home can stand out on the market if it’s in a hot neighborhood.
To determine the best path to selling, work with your fellow heirs to hire a REALTOR® who understands your selling intent, timeline and overall dynamic.
Renting the property
If the property is in good condition and you’re not ready to sell, consider renting it out to earn a monthly income. If you inherited the home with other heirs, determine an initial rental period and be sure to reassess when that time period has ended.
Living in the property
For some, inheriting a property means they get to live in a home where they have fond memories. If you do move into a home you have inherited, it’s important to get the home appraised so you understand its value. You’ll also want to take a look at the expected annual property taxes, especially if the home was one you wouldn’t have been able to afford on your own.
If you inherited the home alongside other heirs, you’ll have to discuss buying out their share of the home so you are the sole property owner. To do this, you’ll want an official appraisal and you may want to hire an attorney to draw up the paperwork (which is called a quitclaim deed). Once the money is exchanged and the deed is notarized, you’ll file the deed with the county recorder’s office.
Need a real estate expert?
Inheriting a property is a special gift that may come at a difficult time, so it’s important to hire a Realtor you trust. Reach out now to get connected with one of Edina Realty’s nearly 2,500 local experts.
