The Real Cost of Inheriting Your Parents’ House
According to the latest research from Charles Schwab, 75% of Americans between the ages of 27 and 95 plan to leave a home to their children. And the first thing most of their children will do is put it up for sale.
As Heidi Whaley and Melissa Mills prepared to sell their childhood home in Charleston, they were torn. Both sisters were sad to let go of the beautiful waterfront property where their family had been so happy, hosting lots of parties and enjoying wonderful times.
But Heidi and Melissa both have their own homes, and in the end they just weren’t able to justify the cost of keeping the 4,000-square-foot house and property.
It’s actually a common story: 70% of children who expect to inherit a home plan to sell it right away. The rising costs of home ownership have been playing a big role in the decision to keep or sell.
The calculus
Property taxes are a key reason heirs sell a home, as are high HOA fees.
The cost of insuring coastal homes has definitely pushed more heirs to sell.
Rising interest rates have also made it impractical for many heirs to buy out their siblings.
From lawn care to busted pipes to periodic design updates, maintenance and upkeep never ends.
There is apparently a low appetite for keeping the home as a rental/vacation property, as evidenced by the minority of heirs who decide to keep the homes they inherit.
The hot market conditions of the last several years have made the prospect of selling even more attractive. The proceeds from selling a nice house in a good location could be enough to completely fund a retirement!
