Usually, when a person inherits a home, it is a good occasion and a happy one. If you inherit a home with an upside-down mortgage, it can be more of a curse. Although you have not received anything with value, you have not received a personal liability, either; you are not legally responsible for the mortgage balance and will have to pay only if you want to keep the home.
Maintain Value
The first priority for the beneficiary is to maintain the value. You, as the new owner, are usually living in your own home and may not want to move into the inherited home. Because a house that is not occupied can lose value rapidly, take care to protect the home's value. Ensure that the yard is maintained correctly; complete any small maintenance that is needed. Be certain that the home is secure and safe from vandalism. Keep the utilities turned on and use timers to operate the lights at different intervals.
Appraisal
Do not move too quickly with any decisions about the home. Have an appraisal done by a qualified appraiser. If the real estate market has begun to turn, the situation may be better than you first thought. After you know the real value, you may decide to hang on to the house for a while to let the value rebound, possibly selling it at a profit later. This may be a good option if you can afford to take on another mortgage.
Short Sale
If the deceased homeowner did not have any other assets to settle the deficiency amount, and you do not want to keep the home, you may want to proceed with a short sale. Begin by consulting with a real estate agent who is skilled and experienced in short sales. The agent will place the home on the market at market value and try to get an offer; the agent will present any offers to the bank. Because the bank cannot collect the deficiency from the original mortgage holder, a short sale may be the best option for everyone concerned.
Allow a Foreclosure
If you are unsuccessful with the short sale or the mortgage company will not negotiate and complete the short sale -- and you still do not want the home or cannot afford the payments -- you may have no choice but to allow the mortgage company to foreclose. In lieu of a foreclosure, you can speed the process by offering the bank a deed, in which you sign a quitclaim deed giving the home's title to the bank. If the bank will not accept this, you may have no choice but to let the bank proceed with a legal foreclosure according to the laws of the state where the house is located.
Tags: short sale, agent will, have choice, have received, home want, keep home