Inheriting a home can come with mixed emotions. Along with the memories connected to the property, you may suddenly find yourself responsible for a house you weren’t expecting to own.
And then come the questions.
Should I keep it? Sell it? Rent it? What if there’s still a mortgage? What if I inherited it with my brothers or sisters? And where do I even begin?
If you’ve inherited a home in Lafayette or Acadiana, you don’t have to make every decision immediately. But understanding your options can make the process much easier.
First, Make Sure You Have the Legal Authority to Make Decisions About the Property
Before cleaning out the house, making major repairs, signing a listing agreement, or putting the property on the market, it’s important to understand exactly who legally owns the property and who has authority to act.
Louisiana’s succession laws are different from those in many other states. Depending on the circumstances, a succession may need to be completed before clear title can be transferred to a buyer.
If several heirs inherited the property, decisions about selling it may also involve multiple people.
A Louisiana succession or estate attorney can help determine ownership and what legal steps are necessary. As your real estate broker, I can then work alongside the appropriate professionals to help you prepare for the real estate side of the process. Do you need a referral to an estate attorney? I can help!
Option #1: Keep the Home
Sometimes keeping an inherited home makes sense.
Maybe it’s a longtime family home that has sentimental value. Perhaps you want to move into it yourself, allow another family member to live there, or hold onto the property for the future.
Before deciding, take a close look at the ongoing expenses.
Consider the mortgage balance, property taxes, homeowners and flood insurance, utilities, yard maintenance, repairs, and HOA fees if applicable.
A house that’s already paid for isn’t necessarily free to own.
Option #2: Turn It Into a Rental Property
Another possibility is keeping the home as an investment property.
If the property is in an area with good rental demand, rental income could potentially make keeping it attractive.
But becoming a landlord comes with responsibilities. You’ll need to consider maintenance, insurance, taxes, vacancy, tenant screening, property management, repairs, and whether the expected rent makes financial sense.
Before choosing this route, it’s worth comparing the property’s potential rental income with what you could receive by selling it. I can help you with rental comparisons.
Option #3: Sell the Home
For many families, selling an inherited property is the simplest solution.
Selling can allow the heirs to convert the property into cash rather than continuing to share responsibility for taxes, insurance, maintenance and repairs.
But before putting the home on the market, there are several questions worth answering:
What is the property worth in today’s market?
How much work does it really need?
Would making repairs increase the sale price enough to justify the expense?
Would it make more sense to sell it in its current condition?
This is where I recommend getting a professional market analysis before spending a significant amount of money on the house.
Don’t Automatically Renovate Everything
This is one of the biggest mistakes I see homeowners consider.
It’s easy to assume:
“We need to completely update this house before we can sell it.”
Not necessarily.
Some improvements may help a property sell faster or for more money. Others may cost thousands of dollars without providing an equivalent return.
Sometimes cleaning, decluttering, removing personal belongings, improving curb appeal and making a few strategic repairs are more valuable than undertaking a major renovation.
Before you start replacing flooring, remodeling bathrooms or renovating the kitchen, find out what buyers are actually paying for comparable homes in the area.
My advice to anyone selling a home is to leave it in as-is condition until your real estate broker looks at it. I can help you determine what you should spend money on and what you shouldn’t spend money on. The last thing that you want to do is make tons of unnecessary updates that don’t translate into additional money in your pocket. I can help!
Let the market help determine where your money is best spent.
What If the House Is Full of Belongings?
This is incredibly common with inherited homes—and it can feel overwhelming.
You don’t necessarily have to empty the entire house in one weekend.
Start by identifying important documents, family photographs, jewelry, valuables, sentimental belongings and anything specifically addressed in estate documents.
From there, the remaining contents can often be handled through a combination of family distribution, estate sales, donations, professional clean out services or disposal.
If you’re planning to sell, I can also help you determine what actually needs to be removed before the property is marketed and I can help you with a referral to a clean out service.
What If the Home Needs a Lot of Repairs?
You may still be able to sell it.
Not every inherited property needs to be renovated before going on the market.
Depending on its condition, location and buyer demand, selling as-is may be an option. The tradeoff is that the property’s condition will generally be reflected in what buyers are willing to pay.
The important thing is understanding both scenarios:
What might the home sell for as it sits today?
versus
What might it sell for after making certain improvements—and what would those improvements cost?
Once you have those numbers, you can make a much more informed decision.
What If There’s Still a Mortgage?
Inheriting a house doesn’t necessarily mean inheriting a home that’s completely paid off.
There may be a mortgage, home equity loan, liens or other obligations associated with the property.
Before selling, you’ll want to understand what is owed. In a typical sale, valid mortgage balances and certain other obligations attached to the property are addressed as part of the closing process.
Your circumstances may be different, however, so questions about responsibility for a deceased owner’s debts should be discussed with the appropriate attorney or financial professional.
What If Several Family Members Inherited the House?
This can sometimes be the most challenging part.
One heir may want to sell. Another may want to keep the house. Someone else may believe the property is worth considerably more than the others do.
Having objective information can help.
A current market analysis gives everyone the same starting point by showing comparable sales, competing properties and current market conditions rather than relying on someone’s opinion of what the house should be worth.
When multiple heirs are involved, clear communication and good professional guidance can make a complicated situation much easier to navigate. I am a straight shooter and promise to give you all the facts.
Don’t Forget About Taxes
There can be important tax considerations when you inherit and later sell real estate.
For example, inherited property may receive a different tax basis than property you purchased yourself, which can affect how taxable gain is calculated when the property is sold.
Because everyone’s situation is different—and tax rules can change—this is an area where I strongly recommend speaking with a CPA, tax professional or estate attorney rather than making assumptions.
Where Should You Start?
If you’ve inherited a property and aren’t sure what to do with it, you don’t need to decide everything today.
Start by gathering information.
Determine who legally owns the property. Find out whether there is a mortgage or other lien. Review the insurance. Get an idea of necessary repairs. And find out what the home could realistically sell for in its current condition.
Then you can compare your options.
Keep it. Rent it. Improve it. Or sell it.
The right answer depends on the property, the estate and your family’s circumstances.
Inherited a Home in Lafayette or Acadiana? Let’s Talk About Your Options.
If you’ve inherited a home in Lafayette or the surrounding Acadiana area, I’d be happy to help you understand the real estate side of your options.
There’s no obligation to list the property.
I can provide a complimentary market analysis, help you understand what comparable homes are selling for, discuss whether repairs are likely to be worthwhile, and give you an idea of what selling the property in its current condition could look like.
Sometimes simply knowing what the house is worth and what your options are makes the next decision much easier.
Melanie Nash, Broker/Owner
National Realty of Acadiana LLC
Lafayette, Louisiana
nationalrealtyacadiana.com
Local Expertise. Personal Service. Proven Results.