Inheriting a house unexpectedly? Be ready for unexpected questions and issues. Making the right decisions is crucial to avoiding financial, emotional, and family problems down the line.
Prepare yourself: common pitfalls when inheriting a house in Alabama.
What Can Go Wrong When You Inherit a House in Birmingham, AL
You Might Owe More Taxes Than You Expect
Don’t stress about estate tax – the high exemption and temporary suspension in 2010 have got you covered. But watch out for the step-up provision if you inherit property in Alabama and plan to sell it, as it affects your capital gains.
Pay capital gains taxes only on the gains above the fair market value at the date of the decedent’s death. The price paid for the house is not a factor, except in certain changed years. Beware potential higher tax bills if this applies to you.
The Mortgage Might Be Bigger Than You Thought
Nowadays, many seniors are turning to reverse mortgages to bolster their retirement savings, a departure from the past tradition of inheriting a mortgage-free home.
Did you know that heirs cannot assume a reverse mortgage? If you plan to rent out your house, be prepared to refinance it in your name. Only those living in the house can assume a standard mortgage.
The House Might Need Repairs
Inheriting a house in Alabama can come with unexpected costs. Typically from deceased elderly parents or relatives, the challenge arises from lack of funds and physical ability for maintenance. Avoiding upgrades is common too, as owners may not plan on living there long.
Thinking of renting or selling an inherited house? You’ll need to invest in repairs and upgrades to meet legal and insurance standards. Upgrading HVAC or rewiring can be costly but necessary.
You May Run Into Problems With Other Heirs or Relatives
Are you dealing with multiple heirs? Selling a jointly inherited property can be tricky if everyone has different plans. It’s like a powder keg waiting to explode.
Did you know that in many states, co-owners of a property are treated as tenants in common? This means that one owner can push for a sale, but it can be costly and lead to emotional family disputes.
Inheriting a house in Alabama? Learn about potential pitfalls like tax laws, mortgages, and upgrades to avoid costly mistakes. Consult a professional to address these issues promptly.
If you’re thinking “I need to sell my home fast,” we buy homes as-is in any neighborhood in the Birmingham, Hueytown, Hoover, Gardendale, Fultondale, Alabaster, Pelham, Calera, and Trussville, AL areas in cash.
Contact us today for a free offer on your home!