When a person passes away, their property is put into a court process called “Probate”. Probate is a legal proceeding used to liquidate and settle a person’s legal and financial affairs after death. The court examines wills, estate plans, and other legal documents to determine the legal beneficiaries. The probate process can be complicated, time consuming, and expensive. If you’ve recently inherited a house, we are here to help.
Sadly, more than 60% of American adults do not have an estate plan. When no will or estate plan is provided, the process to determine the beneficiaries and how the property is distributed will be dictated by the state. This creates a complex nightmare of legal and financial problems, and it can be overwhelming for families to deal with the loss of a loved one while meeting with lawyers, accountants, funerary services and more.
Most probate homes are in fairly bad shape because many times the homeowners were elderly, ill or just unable to provide proper maintenance. Having a home sitting empty during the probate process can create mounting costs too. Maintaining a vacant home can be expensive, especially if the beneficiaries live in another state. The beneficiaries will also be responsible for all the necessary repairs before either living in it, renting it, or selling it through a realtor which can be expensive if the house is in poor condition.
Items such as HVAC replacement, foundation and plumbing repairs, and carpet cleaning add up.
The cost varies depending on where you live, but the national average is $1,000 a year.
Factor in an extra $3,000 annually to cover utility costs such as electricity, gas, and water.
Expressed as a percent of your home’s value, Americans pay an average of $2,216 each year.
The cost is highly variable, but expect to pay an annual interest rate of 3% to 5%.
Costs between 0.3%-1.50% of mortgage but only applies if you don’t have a 20% down payment.
Plan on setting aside some extra cash for various renovations and updates as they arise.
HOA fees cover the costs of maintaining public spaces and are a required for many homeowners.
Closing customs will vary usually equate to about 2-3% of the cost of the home.
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