If you’ve inherited a property and you’re thinking about selling it, you might have more options than you realize. Read this blog post to find out the 3 financial options you can pursue when selling an inherited property in Metro Detroit…
When a loved one passes and leaves you with a property, it might be a meaningful gesture but, the truth is, an inherited property isn’t always convenient to own. There are additional bills, expense, maintenance, upkeep, and stress; it can be time-consuming.
So if you are thinking of selling, you might first be thinking about selling with the help of a real estate agent. However, you might be surprised to learn that you have options that you may want to consider as well. In fact, did you know you have 3 financial options you can pursue when selling an inherited property in Metro Detroit?
First, Let’s Talk About Selling Through An Agent…
There’s nothing wrong with selling through a real estate agent but you should be aware that an agent may have you fix up the inherited property first, then there are closing fees and the hefty agent commission you’ll have to pay afterward. And, this method can take months, so some people don’t like how long it takes.
So, what are the other options?
Second, Let’s Look At The Other Options…
Option #1: Refinance
What It Is:
Refinancing is a financial strategy that allows homeowners to take out a new mortgage on their property, often at a lower interest rate or to borrow against the home’s equity. It’s like “selling” a portion of the house to the bank in exchange for cash, but you retain ownership and can still live in or rent out the property.
Example:
Let’s say you own a home that’s fully paid off or has significant equity built up. The current market value of the home is $300,000, and you owe $50,000 on your mortgage. By refinancing, you could take out a new loan for up to $250,000 (depending on the lender’s terms) and use that money for other financial needs—perhaps to start a business, pay for education, or invest elsewhere. You’d then have a new mortgage to pay off, but you keep control of the property.
Benefits:
- You get cash without having to sell your home.
- You can still live in or rent out the property.
- You can potentially secure a lower interest rate on your existing mortgage.
Considerations:
- You’ll need to qualify for a new loan, which may depend on your credit score and financial situation.
- You’ll need to pay back the loan over time, with interest.
Option #2: Rent To Own
What It Is:
Rent-to-own is an agreement in which a tenant rents your home with the option (or obligation) to purchase it after a certain period. This is often used by buyers who want to own a home but cannot currently qualify for a mortgage due to poor credit or insufficient down payment. Rent-to-own agreements allow tenants to live in the home while improving their financial situation to eventually buy it.
Example:
You have a property worth $250,000, and a potential buyer wants to own it but can’t get a mortgage right now. They agree to rent the house for $1,500 a month for the next 3 years. You also agree that $300 of that monthly rent will go toward their future purchase of the home. By the end of 3 years, they’ve accumulated $10,800 toward the purchase price. During that time, the tenant has worked on improving their credit, and they can now get a mortgage to pay off the balance.
Benefits:
- You get steady rental income while potentially selling the property in the future.
- You can negotiate a higher sale price since the tenant has more time to save.
- The tenant has an incentive to take care of the property, knowing they may own it one day.
Considerations:
- If the tenant cannot buy the property at the end of the term, you may need to find a new buyer.
- The process can take years, so it’s a longer-term option.
Option #3: Sell Fast For Cash
What It Is:
Selling your house fast for cash is a quick solution for homeowners who need to sell immediately without the hassle of listing, repairs, or waiting for buyers. Companies that buy homes for cash, like [Your Company Name], typically purchase properties in their current condition (as-is), allowing homeowners to avoid repairs, inspections, and drawn-out negotiations. The sale can often be completed in a matter of days.
Example:
You’ve inherited a home in need of significant repairs and don’t want to deal with fixing it up. The house-buying company offers you $180,000 cash for the property, which is a fair price considering its current condition. Instead of spending months fixing the home and finding a buyer through a real estate agent, you sell it directly for cash within a week. You can then move on without the stress of repairs or waiting for a traditional buyer.
Benefits:
- Fast and convenient: Sales can close in as little as a few days.
- No need for repairs or updates; the company buys the home as-is.
- No realtor commissions or closing delays.
Considerations:
- Cash offers are typically below full market value since the company is taking on the risk and repairs.
- It’s ideal for people looking to sell quickly without investing more time or money into the property.
Each of these options serves different needs, so homeowners can choose the one that best fits their financial situation and timeline.
There you have it! 3 financial options you can pursue when selling an inherited property in Metro Detroit!