What Can Go Wrong When You Inherit a House in IL

what-can-go-wrong-when-you-inherit-houseIf you’ve suddenly inherited a house, you may not be prepared for the questions and issues that can arise. In today’s post we’ll cover some common issues we have seen come up with inherited properties to help you prepare for the unexpected and manage the estate more efficiently.

What Can Go Wrong When You Inherit a House in IL

You May Owe More Taxes than Anticipated

Most sellers believe that the assets they inherit will be 100% tax free as long as they are under the estate tax limit. However, there step up provisions you may be responsible for paying taxes on if the value of a asset has appreciated since the date you inherited it. Be sure to check with your CPA on any potential tax liability.

The Mortgage May Be Bigger than You Thought

Most properties inherited from an elderly parent or relative had a mortgage paid down over several years or many times fully paid off. In some cases, the home owner may have taken out a reverse mortgage or home equity line of credit to help finance their retirement.

It is important to conduct a search of any liens or mortgages against the property to determine whether there is equity in the property. In many cases a lien search will reveal there is actually negative equity in the property which will require the estate to short sell the property and work with the lender to get the property sold.

The House May Need Repairs and Upgrades

With respect to what can go wrong when you inherit a house in IL, this one may be the most costly. 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. And if they do, they may simply choose not to because they know they won’t be living in the house very 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 re-wiring 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.

So what can go wrong when you inherit a house in IL? Quite a lot, actually, if you’re not up to speed on tax laws, mortgages, and upgrade issues.  It is best to contact a qualified professional to help head off these issue quickly.

We’re ready to help you reach your real estate goals and will be glad to answer any and all questions. Contact us by phone at 630-387-6861 or fill out the online form.

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

What Do You Have To Lose? Get Started Now...

We buy houses in ANY CONDITION in IL. There are no commissions or fees and no obligation whatsoever. Start below by giving us a bit of information about your property or call 630-387-6861...
  • This field is for validation purposes and should be left unchanged.

Call Us!