Inherited a House With No Mortgage

Inheriting a House with No Mortgage
Inheriting a House with No Mortgage

Have you inherited a house with no mortgage? It goes without saying that inheriting a house with no mortgage is far better than inheriting a house with a mortgage, especially one that could make selling your house difficult.

But first things first, the fact that you’re inheriting a house at all likely means that someone close you has passed away, so please accept our condolences. People first, houses second – always.

Regarding the house, whether you inherited it via probate or outside of the probate courts, you need to decide what to do with the house. You have a few options, namely:

Keep the House and Move In

Of course, you could always move into the house. If you own your own house now, you’ll have to decide what to do with that one, so this may be just a lateral move. You’ll likely need to renovate one, if not both (need $$$$).

Keep the House and Be a Landlord

This is where a lot of people go south. They think it’s great to have tenants and collect monthly checks — and sometimes they’re right. But it also means taking phone calls in the middle of the night about clogged toilets, having vacancy periods when you have no one paying rent, and occasionally having to take a tenant to court. You could hire a property manager, but that will cost you 10%. In addition, Hawaii’s real estate prices generally make cash flow properties very difficult to find. Many people end up losing money and decide to sell.

Sell the House on the Open Market

You might decide to list your house with a broker. The pros are that you might get a great price, especially if the house is in very good condition and in a good area. The cons are that 1) you’ll pay standard realtor commissions, 2) you have no guarantee of a sale, meaning it could sit for months, and 3) you may fall in and out of escrow as buyers fail to qualify for a loan. More time on market means more costs out of your own pocket from taxes, insurance, utilities, etc.

Sell Your Inherited House Quickly As Is for Cash

The other primary option if you’ve inherited a house with no mortgage, and the one many people end up choosing for houses they inherit, is to sell your house quickly “as is” for cash to an investor (like us). Why?

  1. You won’t have to pay any agent commissions.
  2. The current condition of the house will be fine, no matter how bad.
  3. You can sell your house for cash, meaning…
  4. You can sell your house fast, maybe in as few as 10 days.
  5. You can sell your house privately — no yard sign, no MLS listing, no open houses, no strangers through your door.

The decision is up to you, but many houses that people inherit are not in very good shape. Many have been in the family for generations and are either very outdated or require a significant amount of repair or renovation. It’s no secret that today’s buyers want a house that’s “move-in ready”; they don’t want to buy a house and then have to hire a General Contractor to work for the next two to three months. If you don’t have the funds to take care of this yourself, then you may end up watching your home sit on the market while the renovated homes around it are scooped up by qualified buyers. Do you want to keep paying taxes and insurance?

The better alternative in these scenarios is to sell your house quickly to an investor who will be more than willing to take on the renovations, even if the house is sliding down the hill!

Extra Bonus for Houses With No Mortgage

Since the home you inherited has no mortgage, you may be able to work out a deal with an investor if his intention is to renovate and resell the property. If you’re willing and able to take only part of the sales price now and wait until after the investor has sold it to get paid the balance (with a recorded mortgage/lien, of course), then you may be able to earn extra interest on your money. Talk to us about it for more details — basically, if you don’t need all the funds upfront then we can actually put more money in your pocket. Ask us how!

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