How exciting! You’ve inherited a house!
But wait, not so fast.
Without giving it much thought, many consider inheriting a house a windfall. However, the reality is that you may be inheriting a sinking ship that you’ll be responsible for, whether you can afford it or not. So while the best intentions may have motivated the inheritance of a property in Chicago, it isn’t always financially beneficial. Often, properties left in wills are older and not in prime condition as the storms of time constantly batter structural features such as foundations and roofs and wear out appliances and systems in the home, like the HVAC.
In addition to the stress of handling the problems your benefactor may have left behind for you to clean up, including going through their belongings and cleaning out the property, you may be dealing with emotional strains as well. In many cases, there are multiple heirs, and emotions may rule their actions at this time, which only adds to the stress when you’re dealing with matters of such import.
Read on as we explore five things you should know about inheriting a property in Chicago.
Regrettably, many people inherit a great deal of debt along with inheriting a property in Chicago from unpaid taxes to liens and multiple mortgages on the property. In addition, primary lien holders, such as equity lines of credit and federal tax liens, will receive payment first if selling the property. Therefore, assessing where you stand with any debtors, such as contracted workers holding mechanics liens against the property for improvements, judgment liens, and the mortgage, is the first step in dealing with your inheritance.
While inheriting a property in Chicago doesn’t necessarily trigger more tax liability, you should know that your decisions about what you do with the property very well may. Should you make improvements, you can write these expenses off. There are also property taxes to consider; if they aren’t a part of an existing mortgage payment, be sure to familiarize yourself with any deadlines. Inherited property is subject to a step-up-basis adjustment in the value of the property upon which your capital gains taxes on any growth moving forward are based.
As houses age, maintenance costs are typically higher for older homes, as they are more susceptible to failure. Allowing routine maintenance to go unperformed can quickly escalate into significant issues. In addition, some homes have features that have become obsolete and require specialized knowledge for proper care. Hence, it’s better to call in an expert for unfamiliar equipment, which is vital to know about inheriting a property in Chicago.
Calls to repair specialists for more significant issues also increase as properties age, and this is another thing you should know about inheriting a property in Chicago. Before deciding to take the house on as your own, you should have a professional inspection and estimates from at least three professionals, allowing you to see just what you’re up against if you hold onto the property. Often, when opening up a section of the house for one repair, other issues come to light, much like a domino effect, so keep extra funds on hand to cover unexpected expenses during the repair process. Remember, too, to request an estimate of the time you’ll be holding onto the property until it’s ready to be lived in or sold.
A listing on the MLS isn’t an inexpensive venture between prepping, repairs, professional photographers, marketing, and showings, not to mention the inspections, real estate commissions, and closing costs. Real estate agents can’t provide a closing date, however, so another thing you should know about inheriting a property in Chicago, you may end up waiting months for the phone to ring.
Or, you could avoid all of the expenses and contact a professional investor like the experts at Chicago Home Buyers, who will make you a cash offer for your house as-is. The professionals at Chicago Home Buyers will walk heirs through the process step by step, making this time a little easier on you. In addition, professional investors like those at Chicago Home Buyers offer guaranteed closing dates. At Chicago Home Buyers, we lay it all out on the table and compare what you’d profit from listing vs. selling directly, so you can make the best decision with your inheritance for your situation. We stop everything and take the time to listen at Chicago Home Buyers, answering any questions; our pros can help you overcome any hurdles you may feel stand in the way. Working with an expert like the professional investors at Chicago Home Buyers can help you learn more about your options if you decide it’s best to sell the property. It’s comforting to know experienced professionals will work with you as a guide like the professional investors at Chicago Home Buyers will. Contact Chicago Home Buyers at (312) 300-2043.