Today I’m sharing with you a recent Wall Street Journal article that talks about what adult children are doing when they inherit the family home.
The article says that the first thing adult children do today when inheriting a home is put it up for sale. Deciding what to do with a family property is often both an emotional and financial decision, but the rising costs of renovations & property taxes are making it harder for adult children to hold on to the real estate. Higher home prices and mortgage rates have often also made it impractical for heirs to buy out their siblings.
The high home prices of the past few years have made the decision to sell even more attractive. If inheritors can unload a house in a popular location for a high price, the proceeds from the home’s sale can help secure their finances and fund goals such as retirement, advisers say.
More than three-quarters of parents plan to leave a home to their children when they die, according to a 2023 Charles Schwab survey. Some children may be reluctant to sell for sentimental reasons, but finances and simplicity of unloading a property often win out. Nearly 70% of those who expect to inherit a home from their parents plan to sell it, the survey found.
Renovation is expensive and what one generation sees as on-trend, the other may not. For example, the younger generation of beneficiaries mostly don’t want older traditional floor plans or furniture.
While Mom and Dad’s home might be nice, the children may not want to live in it and would consider it too costly to renovate to their style.
Vacation homes and secondary properties, however, are more likely to be kept by heirs, at least for a few years, especially if it is in an appealing location, financial planners say.
And last, taxes remain a key reason many heirs sell relatively soon, financial advisers say. It is important to evaluate taxes if sold right after inheritance vs after holding onto it for a while as increased value may be taxed at a higher rate.
If you have questions about selling or buying, give us a call. My team and I are on standby 7 days a week 9am to 8pm ready to help you take the smoother road to sold.
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