Things to Do Before Turning an Inherited House Into Your New Home

Nov 18 2020
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Working in real estate I often see inherited homes being put on the market by children (or grand kids) of folks who have often lived in their homes for decades. I was SO fortunate to be able to keep my Grandma’s house as its really not always a feasible thing for the remaining family member who sometimes even live in other states! Inherited homes do come with their own challenges though and often comes with the sometimes enormous task of deciding what to keep and sell etc.

October 2020 - so when I said in my August 2020 post that our back entryway just kept growing into a bigger and bigger monster(This is a contributed post, for more information about my compensation please read my disclosure policy)

Although we might not like losing a loved one, there will come the point in our lives where our families and friends leave the world of the living.  However, sometimes, they will decide to leave you with their great possessions. From simple household items to money, there’s a reason why our dearly departed left these inheritances to our care.

On many occasions, various people have even received a house as an inheritance.

When you inherit a house, it may mean that you’re a special person to the deceased, leaving you with something as grand as a home. And while living in an inherited house is something to look forward to, there are preparations that you have to do to ensure that moving into this new home is as smooth as possible. 

Things You Should Consider Before Moving In

It may seem easy to handle an inherited house. But most experiences may prove otherwise. There are many things to consider before you can plan on making it your home.

Memories

If the departed were a family member, memories would play a significant factor. The house’s value to the departed and the recipient might be the same or too different from each other. 

If you have good memories in the house, it is definitely worth accepting the inheritance and preparing it to become your future home. If there is none, you can get some cash to figure on it by leasing it out or selling the property.

Family Members

Sometimes, not all are happy about the news of you inheriting the house, and this usually happens when everybody is still coping with the loss of a loved one. 

What you can do is understand their sentiments and console them. Everyone can discuss details of the inheritance further while on clearer heads and days. On better days, you can explain why it was given to you in the first place to avoid any protests. Nothing beats a good explanation, and you need one too, especially if you did not expect it at all.

Location

Even though it can be exciting to hear that you are receiving a house, you should also consider its location. Is it near your work or source of income? Is the neighborhood in the area conducive to starting a family, growing kids, or simply living alone? How far is it from the grocery or a convenience store? 

These are just a few of the questions you might need to ask if you consider making your inherited house your future home. If the location does not work with your current lifestyle and plans, you can consider selling or leasing the property.

Things You Should Do Before Moving In

Before you can fully move into the inherited home, there are things that you should do first, such as:

Assessing the Physical Condition of the House

Let us say the house is already yours, considering that everything is already in order, and the property is already transferred to your name. But while the house became yours officially, what would you do if the property’s condition is not to your liking?

Deck Reveal with Updates and lots of new seating and additions! OMG Where on earth did this summer go so fast!? I can't believe its November

A dilapidated structure needs lots of work to be considered livable. Hence, you must factor in the house’s physical aesthetic and how safe it is for you and your family. If it needs work, you must invest considerable time, money, and effort into fixing it.

Dealing with Sentimental Items

Inheriting a house isn’t easy, especially if the loved one has left various items inside it. However, when moving in, you have to choose whether to keep them or toss them away.

If you’re reluctant to part with the things inside the house, opt to put them in storage. That way, you wouldn’t have to feel guilty about throwing them away. However, avoid keeping broken items as it can cause clutter and potentially harm you or another family member. Another option is donating them to charities or giving them to other family members and close friends.

 Lien, Mortgages, Taxes

Talking about the lien, mortgages, and taxes can be stressful. Unfortunately, you have to face and deal with them all. Every property owner has a responsibility to the state about a property’s taxes and mortgages. 

As the inheritor, beneficiary, or devisee, you also have to update the property’s (in this case, the house) obligations to the state and other parties with interest to the house. These may include, but not limited to, the following: 

 ●       Estate Tax

Estate Tax is quite complicated, depending on the state where the property is situated. This tax is computed based on the value of the estate. The executor (the person designated to handle all the requests in the will itself) usually makes the payment of

this type of tax before giving the property to the will’s recipient. 

●       Inheritance Tax

This tax is levied on each person who benefits from an inheritance either in cash or in kind.

 ●       Capital Gains Tax

This is another kind of tax liability that you need to settle if you wish to sell the inherited house.

Taxes may differ on the state or country where the property is located. So, be vigilant enough to check local tax laws where the property is located to be sure.

You also need to determine if the mortgage is fully paid off by the deceased owner. Doing this will allow you to fully decide what to do with the house. If it is indeed paid off, you wouldn’t have to worry about it. However, if it isn’t, and you’re not financially capable of paying it, it makes better sense to have someone rent it or sell the house.

Selling the Inherited House in the Future

After you’ve done everything you can to own the house and still can’t think of living in it, the best option is to earn money from the property through sale or lease. However, most people go with selling the property to avoid paying future taxes after leasing it.

If it is a family house, you can still sell the house to a relative who can give importance to the house or someone who can treat it with care and make it their new home. The bottom line is that you gained from the property.

Takeaway

While inheriting a house from a departed loved one can be heartwarming, it includes many responsibilities you need to address. The matters and responsibilities attached to the property become yours as well. Hence, it is up to you how you deal with the house and the work that comes with it. But even though turning an inherited home into your residence can be taxing, it’s all worth it in the end.

Working in real estate I often see inherited homes being put on the market by children (or grand kids) of folks who have often lived
(This is a contributed post, for more information about my compensation please read my disclosure policy)

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