Options for An Inherited Home in Poor Condition
If the home you’ve inherited (or are about to inherit) is in terrible condition, and you’re not sure if you can afford it, know that you still have options. You’re absolutely not obligated to sit on a home you can’t afford to keep. In better conditions, where the inherited home is in relatively good shape, the beneficiary has three options: rent, sell or keep. If keeping the home’s not an option, and you don’t have the time or money to restore the property for rental, you still have the option to either sell or decline the inheritance. Here’s how that works:
Declining Your Inheritance
If the home you’re about to inherit is underwater (more money is owed on it than the property is worth) or it is at risk of foreclosure, you don’t have to accept it. You have the option to file a written disclaimer that says you refuse inheritance of the property. In this situation, you avoid the costly aspects of an inherited home. There are a few things to note about disclaiming your inheritance:
- You must file a written disclaimer that declines your inheritance within nine months of the death of your loved one.
- The government will only accept your disclaimer if you have not, and will not benefit from the proceeds of the home in any way.
- Once you’ve disclaimed your inheritance, you may not reclaim it.
Some common reasons people choose to disclaim an inherited home include:
- The home would require serious repairs and renovations before you could put it up for sale or rent it out.
- You would not be able to pay the mortgage on the home
- Property taxes on the home are extremely high, making it difficult for you to keep the home, and equally difficult for you to sell the home.
Note that if you refuse to inherit a home, you won’t be able to say who is next in line to inherit that home. The decision will be made by a probate court, and you will not be able to reverse your decision.
Selling the Home As-Is
Another solution for an inherited home that’s in disrepair is an as-is, or cash offer. A sale like this is quick, can potentially be closed within two weeks, and may be acceptable to your mortgage lender as a short sale, if the home is underwater. While it’s true that you are unlikely to get as much money as your inherited home might be worth when it’s all fixed up — if you don’t have the time or money to make those repairs, a cash sale can solve your problems quickly, and without any headache.
We’ve written a lot about as-is sales, so we won’t bore you with too much information about them here, but know that the main benefit of an as-is sale is that you don’t have to lift a finger in the selling process. You need not fix anything, restore anything, or clean anything up. A buyer comes by, takes a look at the house, makes you a cash offer, and if you accept, they work to close in as little as two weeks.
Those who choose to accept a cash sale often do so for a variety of reasons, some of which include:
- The inherited home is out of state, or in another city that’s far away, making it difficult to keep it up and check up on the property.
- There are tax benefits to selling your home
- You have inherited the home with a number of other parties, and it’s in everyone’s best interest to sell the home so that the inheritance may be divided evenly.
- The home is “underwater”, or there’s more owed on it than the home is worth. In this case, a cash offer can help secure a short sale. A short sale is when the lender agrees to forgive a loan for less money than is owed.
If you’ve inherited a home that’s simply too far gone for you to save, know that you’ve got options. Renewed Homes is a trusted, local real estate investor in the West Michigan area ready to help. We’ll make you a fair, cash offer on the home as-is, so you don’t have to worry about a single repair.