Dad’s house
Hello Terry,
My name is Tiffany. I lost my dad two years ago. He left a house without my siblings and I name on it. I would like to keep the house but my two sisters want to sell. The house has maybe $16,000 left to pay it off. I want to pull down the equity in the home and payoff it off and get the necessary repairs done. It’s a very old house that has plumbing issues and needs to be modernized. My question is can I possibly do that or will it just be a great idea to sell like my sisters want? Please advise it’s greatly appreciated. Thank you
Terry Says
Whew — I can talk you through some scenarios, but first you really have to decide whether you want to go through all that’s involved with repairs (and it is ALWAYS at least 1/3 more than you planned!) — or whether this is just a sentimental journey that could lead you into financial trouble!
In order to sell it, if it is still titled in the name of your deceased father, you would have to have the estate attorney put the property through probate. There would be no taxes at this level, but a court would have to order it either sold — or transferred into your name only.
Then, if the sisters did not want to participate in the renovations, you would need an independent appraiser to judge its value “as is” — minus the amount of the outstanding mortgage. Then you would sign an IOU to your sisters, each for one-third that amount. I’m assuming you have the money to do that — or perhaps they would wait for payment until you get the rehab finished and get a mortgage on the property to repay them. (And I’m assuming that you would qualify for a mortgage at that point.)
Actually, the bank would have to be repaid on the existing mortgage before title could be transferred. And so, I’m assuming you have that $16,000 to start — PLUS the money set aside for repairs, until it is finished and you can re-mortgage it in your name. (Or a very friendly bank that would let you have a mortgage now, plus a home equity loan to do the repairs.)
Just considering all the possibilities is exhausting! It all depends on the value of the house, land — and the amount of debt you are willing and able to take on. So unless there is some truly important emotional reason that trumps all this logic, I suggest you give in and sell!! (Again, your base value on the sale is the value at the date of death, so there would be no taxes involved.)
