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Inheriting a Problem |
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Dear Edith,
My brother died recently leaving me his estate in a will, which is in probate. He was a widower with no children.
He owned a house that he recently took a $100,000 loan on to pay debts. When he died he had made only one payment! We have a joint account that there was approximately $38,000 in. I am paying the bills from the account but I am afraid it will run out. The taxes are quite big.
I had not been in his house for 20 years as he was very depressed and though we saw him he never let anyone in. When my husband and I went in we realized what a mess we had. The entire house needs repair, kitchen, bathroom, ceilings, windows rotting etc. I wanted to sell it but now I realize with the loan I most likely will take a big loss and probably owe more money when it is sold. It also has a well and septic tank that I am sure need work.
What do I do? I originally wanted to get it up in working order as the area is desirable and is a good school district. The problem is the money. I cannot cover the repairs. My husband and I recently paid off our house and would have no problem taking out a home equity loan. Can I use that money to pay the loan on my brother’s house? We were even thinking of renting it if we could get it in working order. The mortgage company, which did things over the phone and never even saw the house, have it valued at $379,000 which if it was fixed up we might get. The house next door went for $430,000 a few months ago but was completely redone. I do not want to put my own home in jeopardy. We have only one income as my husband is disabled. – D. V.
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Don’t mortgage your own home. Forget about renting the house out, and forget about repairing it yourselves. Your best solution will be to sell the place as-is to someone who is experienced in rehab work. If the land is the more valuable part, you may even find a buyer who intends to tear down the house and build from scratch. Call three real estate companies that are active in that neighborhood. Ask if someone (preferably the managing broker) can meet you at the house and offer advice. You’ll have a much better idea of your options after talking with agents. Then your lawyer can advise you on the procedure for selling. And on the remote chance that agents think the property might bring less than the debt against it, talk with the attorney about your right to refuse the bequest. |
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Edith
Originally published on March 25, 2007 |
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