You inherited a house…what now?
Inheriting a property can come as a shock and may feel like an insurmountable obstacle. In the wake of a family tragedy or death, being the executor of an estate can be especially challenging. And the biggest asset in an estate—and the most difficult to resolve—is usually a house.
Keep, rent or sell? Competing interests among siblings can make the right decision difficult. Caught in the middle, the executor has to ask the heirs to keep their emotions under control and put the rational facts on the table. Selling is often the best decision if medical bills, tax issues or other reasons require cashing out, and it produces a specific amount that can be divided equally.
Can you manage the property investment ? When considering keeping the property in the family, the executor needs to be objective about the beneficiaries’ dependability. Would you choose the other beneficiaries to be your partners in any long-term investment? Could they get divorced, go bankrupt or bring other entanglements? If you decide to rent the property, there are issues to consider, such as the local market for rentals and your ability to maintain the property.
Establishing value of the property. If one heir or beneficiary wants to buy the house, the estate must determine the market value and get a fair price for the heirs and beneficiaries. The executor would need to get an appraisal and contact a real estate agent and ask for a market analysis. Alternatively, the executor can put the property on the market with the expressed provision that one of the heirs has the right of first refusal to match the highest offer.
Repair and renovate? The executor must make sure the house is maintained in good condition and that necessary repairs are carried out. Insurance is very important. An executor can be personally liable for failure to maintain a property that results in losses for the heirs. How much work is worthwhile before putting a home on the market? That’s a big question that depends on the property and circumstances.
Furnished or unfurnished? It’s not unusual for an inherited home to be filled with a lifetime accumulation of stuff. In most cases, when the property goes on the market, thinning out the furnishings will help it show better.
Being an executor can be a high-responsibility, time-consuming, and often thankless job. It’s up to the executor to assess not only the physical assets of an estate, but also the people and emotions involved. Cain Real Estate can help. We know the local market and can help you put your plan into place. We have experience and knowledge that cannot be matched.