The days and weeks following a death can be a blur. Family and friends come and go, people travel to attend the funeral, and there are a million things to do long after the celebration of life. Along with settling medical bills and other financial loose ends, many families are often at a loss for what to do with the house. Multiple family members might have inherited a home, and sometimes, the beneficiary might live several states away. Know what happens to a house when a homeowner dies, so you can move forward with the grieving process without feeling overwhelmed by your sudden homeownership.
The Home Becomes Part of the Estate
When someone passes away, their home, their assets, and their debts all become part of a greater estate, which a lawyer will likely have to review and organize. In the case of a homeowner, the home is an asset. However, that does not necessarily mean that the home will stay in the family. For example, if a person dies with $100,000 in various debts, then the home will likely need to be sold to pay them off. If the home is worth $150,000, then the remaining $50,000 is what the rest of the family will inherit. If the house is not paid off and the homeowner dies, then the beneficiary inherits the mortgage as well. They are responsible for continuing to pay off the loans, though they can work with the financial services provider to sell the property. This way, you aren’t forced to take on two mortgage payments.
Beneficiaries Decide What to Do With the House
Once the estate is taken care of and the will is distributed, the beneficiaries can decide what to do with the property. For example, if a house valued at $150,000 is left to three family members (and is completely paid off), then those family members may decide to sell it and take $50,000 each. Another option is for one family member to buy out the other two shares of the house (at $50,000 each) and then live in it as a sole owner. These home ownership decisions are made on an individual basis. Some families may decide to hold onto the house for the memories or to wait until the housing marketing improves before they sell it. However, if the beneficiaries agree to sell their claim to the house, they do not get the additional profits if its value improves. Using the same example as above, if two family members sell their shares of a $150,000 house for $50,000 each to a sibling, they do not get any more money if that sibling improves the home and sells it in a strong market for $200,000.
The House Needs to Be Cared for If It’s Vacant
It may take several weeks (or months) for an estate to get settled, and then it could take even longer to sell a house when the homeowner dies. This can be frustrating for beneficiaries who live out-of-state who suddenly need to care for a house that they inherited. A house needs care, even if no one is living in it. The beneficiary will need to continue to pay for services like electricity, water, lawn care, and other upkeep that comes with a home. You may not think that an unused home needs electricity, but temperature control is important for maintaining the quality and structural integrity of the house. Plus, a house with a clean pool and a clear yard is easier to sell. These are additional expenses that come with homeownership. When a homeowner dies, be sure to look for their monthly expenses and accounts with the water, electric, and cable companies. While you can cancel the cable and internet if no one is living in the house, you will want to transfer the electric and water payments to your name.
Find a Realtor® Who Specializes in Inherited Home Sales
There are benefits to selling a house after the homeowner dies. You can move all of the furniture out quickly or sell it in estate sales. Then, you can start the sales process as many beneficiaries are highly motivated to sell. If you find that you are ready to sell, look for a Realtor® who specializes in selling homes that were inherited. They can help you sell the house if you’re out of state and also keep you abreast of potential buyers and even negotiate on your behalf. Check out EffectiveAgents.com to find your top Realtor® options. We use a data-driven algorithm to help customers connect with the right Realtors® that meet their needs. Quickly find a Realtor® that can help you sell an inherited house – even if the house you’re selling is in a completely different state. Start your search today. Photo credit: zane-lee-ECsnJcc0Dhs-unsplash
