Inheriting property is a good thing in many ways, and one of the biggest benefits is that you have a new asset with the potential to make you some money. However, it’s important that you know about the different ways that inheriting a property can empty your wallet. Because dealing with the loss of a loved one and figuring out the legal process of inheritance can create such a challenging time in your life, it can be easy to forget about the financial costs of inheriting property. Here are some of the most common expenses you can face when inheriting a property in Georgia so you know how to make the best choices for your situation.
Costs During Probate
The first thing to be aware of is Georgia’s probate process when inheriting property. When an estate is left to you, the property will first need to go through probate in order to be placed in your legal ownership. During this process, the estate’s personal representative will be responsible for using the estate’s funds to pay off any debts and making any mortgage payments. While this doesn’t technically qualify as losing money, you need to be aware of how the probate process can deplete the value of your inheritance.
Inheriting property also means that you have to be aware of any mortgage payments. The probate process typically does not pay off existing mortgages with the estate’s funds. This means that the mortgage agreement will pass to you as the new owner of the home. Additionally, if you decide to sell the house, it will be your responsibility to pay off the mortgage before closing the sale.
Taxes on Inherited Property
There are a few different things to keep in mind in terms of taxes when inheriting property in Georgia. Luckily, Georgia doesn’t enforce inheritance taxes, so you likely won’t have to pay anything upon actually inheriting the property, unless the estate happens to exceed the $13.61 million filing threshold, in which case, you will have to pay federal estate taxes.
While you retain the property, paying any property taxes will be your responsibility. These can be filed with your other annual taxes as normal. If you co-own the inherited property with other heirs, you need to reach an arrangement with them about how property taxes will be handled among you.
Additionally, you will have to keep in mind capital gains taxes if you plan on selling the property. This tax only applies if you sell the property for a profit. If you sell the property for a price that is below or equal to the fair market value of the property at the time that you inherited it, you don’t have to worry about paying this tax.
Paying for Utilities
Even if you or someone else is not living in the inherited home, you will still have to worry about utility bills. It can be hazardous to completely turn off all utilities in a home, even an empty one. Doing so has the potential to cause long-term damage that you may have to spend even more money to repair. While there are still ways to turn off non-essential utilities and to manage the necessary utility costs, paying utility bills for an empty house might be something that you want to completely avoid. The best way to do that would be to rent the property out or to quickly sell the property.
Maintenance and Repairs
Houses seem like they are in constant need of maintenance, even empty ones. Things like lawncare and regular cleaning will be your responsibility, which means that a portion of your time and money will be dedicated to general upkeep. The same can be said if you choose to rent the house out, in which case upkeep and maintenance will need to be a priority because of your role as landlord.
Additionally, one of your responsibilities after inheriting a house is to bring it up to code if it is not already. Inherited properties are often in need of repairs, both minor and costly, in order to do this. Depending on the work that needs to be done, you will likely need to invest in professional labor as well as whatever supplies are needed.
Costs of Selling the Property
If you’re looking to list the property, not only will repairs be necessary, but the property may also need updates in order to make it “market ready.” This means that you will have to clean out the property and invest in the materials and labor for the updates, which can be a large and time-consuming investment. You will also have to factor in the listing agent’s fees, closing costs, and appraisals, as well as waiting for showings, offers, and loans, which can slow the process and increase the length of time you will have to take care of the property.
How to Avoid Selling Costs
The costs of selling a home the traditional way can add up quickly. If you’re looking to offload your estate after inheriting property, you might want a way to avoid additional expenses. Luckily, there are options.
You can always sell the home on a For Sale By Owner Basis. This means that you will take on the responsibilities of a listing agent: taking pictures and listing the property, finding potential buyers, arranging showings, and negotiating offers. This will take a significant amount of your time, but if you are familiar with the real estate market and confident in your ability to offload the property quickly, this may be a good way to reduce costs when inheriting property.
You can also look into selling your house to a local cash homebuying business. These companies make competitive cash offers on homes, providing an option for homeowners to close on their houses quickly and walk away with cash in hand.
If you want to learn more, we invite you to visit our How It Works page. Here, we offer full transparency about our homebuying process, including details about exactly how we calculate our offers. You can also check out Our Company page to get to know our team, our credentials, and our experience. Fill out the form below to get a no-obligation cash offer started now!