When people inherit a property in desperate need of repair, they often discover that there are financial problems as well. In many cases, their first reaction is to simply walk away especially if they feel there is no equity in the property. They mistakenly believe that getting involved with the purchase or a sale of a distressed property may incur liability on their part.
According to Keeana Toliver of Realty Warehouse, just the opposite is true. “People have a choice to make when they inherit a distressed property, and sometimes they can sell and walk away with money,” she said.
However, more often than not, a house in disrepair is ‘underwater’ where the balance on the mortgage is higher than the amount the property will produce in a sale. There may also be back taxes to settle. “Even so, I may be able to help heirs get the debt forgiven and come away on the plus side,” she said.
Keeana noted that she does a lot of research before recommending a course of action. The first thing is to find out the actual owners of the property. If there is a will, the answer can be determined reasonably quickly. If there is no will, it is still possible for the next heirs in line to sell and transfer the property. The next step is to see how much is owed on the property. There may be a mortgage, a reverse mortgage, tax liabilities or other liens. It is also possible that the property is under threat of foreclosure.
“What people may not realize is that if the mortgage is not in their name, they are not responsible for the loan,” she said. “If there is a reverse mortgage where the homeowner was over 62 and not paying down the mortgage, it gets a little more complicated. I work with clients and heirs on a case by case basis to create a plan in order to achieve the best possible outcome.”
Keeana Toliver stressed that she has many strategies to help people deal with a property in disrepair and in financial distress. In some cases, she may recommend selling the property through a “short sale,” where she works with the owners to get the bank to accept less than is owed on the mortgage. Or, if there is a delinquent tax bill, the new owners may be able to settle up the tax liability and transfer the estate directly to Realty Warehouse who will buy the property in a “quick sale.”
“The point is, I can help people who either don’t want the house they inherited or can’t afford to keep it,” she stated. “There are plenty of options, even if the property is in poor condition and there is no will, or if there is a tax lien and a mortgage on the home. I may even be able to help the heirs walk away with money if the house is underwater.”
This blog is for informational purposes only, subject to change.