Inheriting a home is a huge responsibility. You're gaining property, perhaps even something that's sentimental to you and your family. There are increased legal and financial responsibilities that come with it, so what steps should you take when you first find yourself newly in possession of a home?
Determine What It's Worth
Is this a home you're looking to keep, or would you like to move on and sell it? Either way, you're going to want to ask "What is my home worth?", and get it appraised by a professional so you can decide what financial course of action is best for you: sustaining this new abode or selling it and moving on.
Prepare for Expenses
Inheriting a home means taking on payments for the mortgage, utilities, property taxes, homeowners insurance, and any urgent repairs or maintenance that might be needed.
Once a homeowner passes away the insurance policy should be rewritten. Most insurance companies will allow some time for you to find your own coverage, and some will let the current policy remain intact until it expires, as long as you stay on top of payments.
Look at the Mortgage
Check up on the mortgage and see what, if any, is owed on it. You also want to be aware of the lender, and you can do this by checking the house's title.
You also want to check if the mortgage had a cosigner. If so, that person is responsible for continuing the loan payments following the owner's passing.
You can also request a credit report for the person who passed and left the house to you to identify any outstanding loans, which would include the mortgage.
Be Aware of Taxes
In some states, an inheritance tax is imposed: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
However, there are some exemptions in these states. A spouse is exempt from paying this tax, and children and grandchildren are exempt in all the aforementioned states except for Pennsylvania and Nebraska.
Be aware that if you are not related to the deceased you may find yourself privy to higher inheritance tax rates.
Scan for Repairs
It would be nice to think you're getting a home in great shape, but you will often find repairs are going to be needed before you can settle in comfortably.
First look at any repairs that might be needed to ensure the safety of the space, as those will be the most costly.
Keep, Rent, or Sell?
You have many options when it comes to your new home.
Renting will net you extra income, but could be more work on the front-end as you want to make the property appealing to prospective renters. You will also take on the responsibility of a landlord.
You may also want to outright sell the home. You should do your research on the house's worth as well as what homes in the surrounding area are selling for. Repair anything major and, again, make the home appealing to any prospective buyers.
Or, you may decide to stay! In that case, take care of all of the above and enjoy your new home.