The Challenges of Inheriting a Home In 2022
Inflation and the pandemic are making home ownership more expensive, especially if you inherit an older home. At the end of the first quarter of 2022, inflation is supposed to lock in at about 6.2%. In past years, the inflation rate was generally between 1% and 2%. Home prices have gone up for a wide variety of reasons, one of them being inflation. If you inherited an older home, you may be looking to sell it for a wide variety of different reasons. Let’s take a look at why you might want to get rid of an unwanted inherited home in the coming year.
The Cost of Repairs
Older homes often have costly repairs that need to be taken care of. During the past year, construction goods have skyrocketed in terms of price because of inflation. In 2021, the cost of construction goods increased by 21%, according to Supply Chain Dive. So if you’re looking to do a full guts-to-stud remodel, you’re probably going to be spending anywhere from $100,000 to $200,000. This cost alone may make an inherited home not worth it.
The Cost of Taxes
In 2021, the average American paid $3,719 in property taxes, for an effective property tax rate of 1.1%. In Harris County, Texas, the average property tax rate is 2.03%. If you inherit a $365,000 home, you will owe about $7,409 in property taxes each year. In this situation, you might want to consider selling a home if you don’t want to get stuck with a property tax bill. You may hear that if you get an inherited home, you are clear of capital gains taxes, which is true, but property taxes are often an afterthought.
You’re Also Inheriting a Mortgage
Inheriting a house that is not clear and free of debt creates a unique challenge. If the home was owned by a two-income family, the other spouse will have to adjust their lifestyle to cover the payments each month. Sometimes, selling the house might not cover the outstanding balance on the loan (especially if it was refinanced for one reason or another).
The Home Is a Co-Inheritance
A co-inherited home can be a problem among siblings. Who gets the house? Rather than go to court and challenge the will, selling the inherited home for a cash offer may help family members walk away from the situation and leave everyone feeling that the right decision was made.
Work With Houston Capital Home Buyers
Houston Capital Home Buyers can help you get a fast cash offer on your inherited home. Rather than deal with a property you might not want, we can help you sell your home without the issues of having to deal with inspections, home repair, and property taxes that you don’t want to pay.