Inheriting real estate is rarely as wonderful as it may appear in movies. The responsibilities that come along with this gift can be overwhelming, especially if it is an older property in a state of disrepair. While your loved one or close friend may have had the best of intentions, often the property is an emotional and financial burden, especially if you don’t intend on living in the house yourself. If you have inherited property, here is some important information you need to know about inheriting real estate in Salem.
Financial Responsibility
The first thing to remember about inheriting property in Salem is that the recipient of an inheritance of real estate is financially responsible for the property. This includes any outstanding debts attached to the property, including liens. If there’s a mortgage on the property, you’ll need to figure out how to continue making the payments. If there are liens against the property, those debts may continue to accrue interest if they’re not paid.
In addition to the debts against the property, you are now responsible for any maintenance or repairs the property needs. If the property is an investment for rental income you may now also be taking on the duties of being a landlord, which brings along more responsibilities and demands on your time. You will also owe property taxes and possible homeowner’s or property owner’s association fees. Often these associations have strict guidelines that must be adhered to regarding the maintenance and appearance of the property.
Repairs
The frequency and expense of repairs begin to increase at a quicker pace as homes age. It’s unusual to inherit a house that’s new or in pristine condition. Whether your intent is to live in the property or list the property, it’s a good idea to educate yourself on the condition of the home from the foundation to the top of the roof. You will want to save yourself from catastrophe by investing in hiring a professional inspector to fully understand the condition the house is in. Once you have an idea of the house’s condition, contact at least three contractors for each type of repair. Don’t forget that the contractor’s bid price is not the only thing to consider when deciding who you’ll hire. You want a contractor that will show up when he’s supposed to and do quality work.
Clearing Personal Property
Inheriting real estate in Salem can be a very emotional time and may even make it difficult or impossible for some to even enter the property. You’ll want to get the personal property out of the house, which means either removing it yourself or hiring professionals to clean it up. Depending on the condition of the property, and the tendencies of your benefactor, this could literally mean going through mountains, clutter and decades with of belongings. Delaying the process to avoid painful memories can be extremely costly, delaying repairs on the property lowers the value as it continues to deteriorate.
Taxation
Whether or not you believe you believe you will personally ever inherit real estate, it is one of the most common items passed on and the tax implications are something everyone should have at least general knowledge about inheriting real estate in Salem. Under the Unified Gift and Estate Tax system, estate tax is based on the value of property transferred through inheritance, which is calculated based on specific guidelines and includes possible deductions. While often no federal estate tax is owed as the beneficiary, this is not always the case. Every American currently is allowed to inherit up to 11.18 million. You will also want to be certain to investigate gift tax as well. Additionally, Oregon has an estate tax for estates worth over $1,000,000. Familiarizing yourself with state and federal tax laws may be helpful in the future.
Purchasing Other Property
Because you incur the financial responsibilities along with the property, your other financial goals might be affected if you when you inherit property. For example, if you were planning on buying a new house for yourself your bank may decide that your debt-to-income ratio is too high to approve you for a new mortgage. Additionally, the money you find yourself needing to spend on repairs may have to come out of the savings you had set aside for that new house or other big purchase.
For many, holding onto an inherited piece of real property is too time-consuming or simply not financially possible. Selling the property is always an option, but even selling a house can be expensive and difficult, especially if the house is in poor condition. If you’re considering selling an inherited property or any other real estate you don’t need, consider working with Willamette Home Buyers. Our top priority is solving your problem and making your life easier. We can structure an offer in a variety of ways to make sure that your needs are met, and if we’re not able to make an offer that works, we’ll connect you with someone that can help.
Just send us a message or call Willamette Home Buyers at 503-383-1686 to discuss the market value of the property and the possible options of selling your unwanted inherited property.