We buy houses in Shoreline, Washington. If you’ve suddenly inherited a house, you may not be prepared for the questions and issues that can arise. If you make the wrong decisions, you will likely encounter financial, emotional, and family problems before long. We can help! We are local homebuyers in Washington that offer cash for houses in Shoreline and all over WA. Here’s what can go wrong when you inherit a house in Shoreline.
What Can Go Wrong When You Inherit a House in Shoreline WA?
You May Owe More Taxes than Anticipated
Most people don’t have to worry about estate tax because of the very high exemption (in the millions), and the estate tax was even temporarily suspended in 2010. Also mostly suspended in 2010 was the step-up provision. So, in considering what can go wrong when you inherit a house in Washington and when you intend to sell it, you need to consider the stepped-up capital gains situation.
The step-up provides that you pay capital gains taxes only on the gains above the fair market value at the date of the decedent’s death. It has nothing to do with the price the decedent paid for the house – unless the step-up falls in one of the years when it was changed. In that case, you may owe a lot more in taxes than you bargained for.
The Mortgage May Be Bigger than You Think
Generally in the past, when an elderly parent or relative passed, the mortgage on their house was paid off. These days, though, it’s common for elderly people to take out a reverse mortgage on their home to supplement insufficient retirement funds.
You need to be aware, then, that a reverse mortgage cannot be assumed by heirs. In the case of a standard mortgage, you can assume the mortgage only if you live in the house yourself. So, if you intend to rent the house, you may have to refinance it in your own name.
The House May Need Repairs and Upgrades
With respect to what can go wrong when you inherit a house in Shoreline, this one may be the costliest. Most of the time, people inherit a house from a deceased elderly parent or very close relative. Besides not having the physical ability to perform maintenance and upgrades, many elderly people don’t have the money for it either. If they do, they may simply choose not to because they know they won’t be living in the house for many more years.
If you plan to live in the inherited house, this may not be a huge concern. But, if you intend to rent it or sell it, you’ll have to make repairs to make it presentable and upgrades to bring it up to code and meet other legal and insurance requirements. Installing a new HVAC system or rewiring the house will involve a big chunk of money.
You May Have Problems with Relatives and Joint Heirs
But, what if you’re not the only heir? That can be a problem. Suppose you and your siblings inherited the house jointly. If you want to sell it, your brother may want to rent it and your other brother to live in it himself. You can see what a powder keg waiting for a spark this is.
In most states, joint heirs of a home are considered tenants in common, and one heir can force a sale if it comes to that. The process, however, is expensive, and the emotional and familial consequences are likely to be highly unpleasant.
Sell My House in Shoreline WA
So, what can go wrong when you inherit a house in Shoreline WA? Quite a lot, actually, if you’re not up to speed on tax laws, mortgages, and upgrade issues. It is best to contact qualified professional Shoreline home buyers like us. Good As Sold Home Buyers will help you with these issues quickly. Sell your house in WA NOW!