If you've just inherited a house after the owner has died, you and your family will need to decide what to do about the house pretty quickly. Depending on the mortgage and other factors, you may be able to stay in the house or rent it out -- or you may need to act rapidly to prevent penalties from affecting you. Here's a look at what you need to consider when deciding what to do with your new-to-you house.
The first issue you have to face is whether the house was paid off. If not, and you can't afford the mortgage yourself (or you and other inheritors aren't willing to pay it), then you have to sell the house. If the house goes into foreclosure while in your name, you're the one who is affected -- not the deceased owner. The mortgage company can tell you what sort of timeline you have.
Note that even if the house is paid off, tax concerns may lead you to sell it. If you decide to become a landlord and rent the house out, you may be able to deduct a lot more or get special tax breaks when it comes time to pay taxes. If you want to live in the house but can't afford the taxes without those breaks -- and you're not willing to work out a payment plan with the IRS -- then renting the house out may be better, if not selling it.
You and all of the other inheritors have to be in agreement. If you each have different desires regarding the house, sometimes the simplest solution is to have whoever wants to keep the house buy out the shares of people who want to sell the house. If more than one person wants to live in the house, but these people don't want to live together, selling may actually be the best idea -- it gets rid of something that's going to cause a lot of strife.
Both the home sales and rental markets wax and wane. If you want to keep the house as a rental or sell it, you have to take into consideration how the market for each type of action is doing. What will you do if you can't find a renter? What will you do if you keep the house, pay the mortgage, but later find you can't keep paying the mortgage right as the sales market tanks? Obviously, you can't plan for every single possibility. But looking into the future and choosing the potential problems you're willing to accept (or the ones you want to avoid) can help drive your decision.
If you're still not sure what to do with the house, talk to a real estate attorney, such as Levin & Levin, LLP - Attorneys at Law. He or she can help you and the other inheritors, if any, decide what to do, and then help you draw up any agreements needed.