Inheriting real estate can be extremely stressful and burdensome. Inherited properties are often in some sort of disrepair and are often filled with a lifetime of personal contents and stuff that needs to be removed. Most inherited houses are often need of updates and need to be freshened up as well. It can also take months or years to get the proper title work in place and get the property ready to sell. Here are some tips and information to consider that will hopefully make the process more simple and reduce the stress and burden.
Title and Probate
One of the most costly and time consuming issues that we often see is that properties are not properly titled and identified in a will, which requires a long and costly probate or legal process. Just because the deceased’s had a will, doesn’t mean that the property will transfer cleanly to their heirs without issue. A common issue that we see is that there is a will in place but the property ownership was never transferred to an estate or trust. When a property is not in a estate or trust you will most likely have to go thru the probate process. The probate process can be quick and simple or sometimes very complicated and expensive. We have a network of professional legal probate specialists that will make this process as easy on you as possible.
Financial Responsibility
One thing you should know about inheriting real estate in Kansas and Missouri is that the recipient of an inheritance of real estate is financially responsible for the property. Any debts, judgments or liens must be paid and satisfied before the property can be sold. All of the reoccurring monthly payments and expenses need to be paid as they were before you inherited the property. The monthly expenses could be mortgage, taxes, insurance, utilities, upkeep and maintenance. The costs associated with holding a property can be extremely expensive, especially when you do not have an income coming in from the property.
Maintenance, Repairs and Updates
As homes age and when they are vacant the frequency of repairs increases. If you are required to go thru the probate process you could be looking at maintaining the property for a period of 6-12 months. We recommend setting aside a monthly amount that will cover the maintenance and upkeep of the property. Usually this will be a value between $400 and $1,000 depending on the size and age of the property. If the house is large and older then you will want to budget for at least $1k per month. If the house is in need of repairs and updates prior to selling then you could be looking at significant costs. Unless you have the contacts, resources and experience then we recommend getting help from an experienced professional. This is where it might make sense to sell the house to a professional real estate investor like Sell Fast KC. A professional real estate investor will have the experience and resources to complete the renovations usually at a lower cost than an average homeowner.
Removing Junk and Personal Items
When inheriting a property there is usually a bunch of junk and personal items that come along with the property and is often not of value to the people that inherit the property. It can take several days or weeks to remove the personal contents in order to prep the house for the market. You could remove and dispose of the items yourself or another approach is to hire a local junk removal service. If you don’t want to deal with this hassle, most professional home buyers can handle the contents removal when they buy the house. About 90% of the houses that we buy at Sell Fast KC have contents remaining when we purchase the house.
Taxation
Whether or not you believe you will 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 Kansas and Missouri. 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, there are several states which do have estate taxes, so familiarizing yourself with these laws may be helpful in the future. Both Kansas and Missouri do not have a state gift tax.
Purchasing Other Property
Because you incur the financial responsibilities along with the property, if you were on target to purchase your dream home, everything may have just changed dramatically. One of the major changes may just be in the eyes of your lender when inheriting real estate with an associated debt. Depending on the remainder of the mortgage and any other expenses that are now in your name, your debt to income ratio may now mean you no longer meet the guidelines to qualify for a loan. Additionally, the outlay for repairs is likely to deplete whatever savings you have managed to gather in anticipation of your plans.
For many, holding onto an inheritance of real property is much too time-consuming or simply not financially possible. There is a simple and quick solution that will easily eliminate any concerns about inheriting real estate in Kansas City. Working with Sell Fast KC means total convenience, with no showings or open houses. Just pack what you want and leave the rest behind. Sell Fast KC will help you with the paperwork and make the entire process easy, explaining every step along the way. The price Sell Fast KC offers is what you will receive at closing. Just send us a message or call Sell Fast KC at (913) 210-0330 to discuss the market value of the property and the possible options of selling your unwanted inherited property.