We Buy Houses In O’Fallon, Missouri. If you’ve suddenly inherited a property, you may not be prepared for the questions and issues that can arise. And if you make the wrong decisions, you will likely encounter financial, emotional, and family problems before long.
Forewarned is forearmed, they say. We are homebuyers in Missouri that offers cash for houses in O’Fallon, and we have here some idea of what can go wrong when you inherit a property in O’Fallon, MO.
What Can Go Wrong When You Inherit A House In O’Fallon, MO
You may owe more taxes in Missouri than anticipated
Most people don’t have to worry about estate tax because of the very high exemption (in the millions), and the estate tax was even temporarily suspended in 2010. But also mostly suspended in 2010 was the step-up provision. So in considering what can go wrong when you inherit a house in O’Fallon, MO and when you intend to sell it, you need to consider the stepped-up capital gains situation.
The step-up provides that you pay capital gains taxes only on the gains above the fair market value at the date of the decedent’s death. It has nothing to with the price the decedent paid for the house – unless the step-up falls in one of the years when it was changed. In that case, you may owe a lot more in taxes than you bargained for.
The MO mortgage may be bigger than you thought
Generally in the past, when an elderly parent or relative passed, the mortgage on their house was paid off. These days, though, it’s common for elderly people to take out a reverse mortgage on their home to supplement insufficient retirement funds.
You need to be aware, then, that a reverse mortgage cannot be assumed by heirs. And in the case of a standard mortgage, you can assume the mortgage only if you live in the property yourself. So if you intend to rent the house, you may have to refinance it in your own name.
The O’Fallon house may need repairs and upgrades
With respect to what can go wrong when you inherit a house in O’Fallon, MO, this one may be the most costly. Most of the time, people inherit a property from a deceased elderly parent or a 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 property very many more years.
If you plan to live in an 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 in O’Fallon Missouri
But what if you’re not the only heir? That can be a problem. Suppose you and your siblings inherited the property 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.
Sell My House In O’Fallon MO
So what can go wrong when you inherit a house in O’Fallon, MO?
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 real estate professional to help head off these issues quickly.
If you are considering selling your inherited property, now or in the next few days or months, then you are better off speaking to one of our Missouri home buyers and experts. We purchase houses in O’Fallon no matter the condition. If you need to sell your house in St. Louis, give us a shout and see how much we can offer you in cash! We’re ready to help you reach your real estate goals and will be glad to answer any and all questions.