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What Happens When I Inherit A Property With A Mortgage?Inheriting a property with a mortgage can impose a financial burden on the beneficiary. So, what happens when you inherit a property with a mortgage? Here’s a quick guide on what to expect and what to do if you’ve inherited a property with a mortgage.Inheriting A Property With A MortgageJust like a property that is free and clear of any loans, a mortgaged property can be inherited as well. If you’re the inheritor, make sure you have ownership by recording the deed at the county recorder’s office. Failing to check if the property is insured is often a missed process an inheritor should take. Calling the insurance company to make sure your property has a homeowner’s or landlord’s policy on it is important. You should also call a title company to make sure the property has title insurance.Be sure to note the mortgage doesn’t just go away! You should consult with the mortgage company about how to pay it off.What Happens To The Mortgage Or Liens When You Inherit Property?Inheriting can sometimes be a financial burden. The mortgage, back taxes, liens, etc… do not just go away when a person passes. They follow the property and survive the death of the owner. Some liens may or may not be negotiable. Consult with a professional to help you with these matters.Sometimes, these mortgages cannot just be assumed (For example, on properties with more than 5 units, apartment buildings, or commercial buildings). The Due-On-Sale clause prevents this. This basically means that the full balance of the mortgage is due upon the transfer or sale of the property. The Garn-St. Germain Depository Institutions Act of 1982 allows an exception to the Due-On-Sale clause when a property transfers by inheritance to a close relative. Also, a joint-tenant may assume a mortgage. A joint-tenant is a type of shared ownership of property, where each owner has an undivided interest in the property. This type of ownership creates a right of survivor-ship, which means that when one owner dies, the other owners absorb the deceased owner’s interest.What Happens When I Inherit A Property With A Mortgage Or Liens?Reverse Mortgages:If the property as a reverse mortgage, (where the lender pays the owner for their equity usually monthly) then the estate must pay the lender back. If the property passes to a beneficiary, then the beneficiary must pay back the amount to retain ownership. The beneficiary also can sell the property to satisfy the amount owed. They may also obtain a new loan to pay the amount owed.Foreclosure:The lender may foreclose on a property if the new owner fails to pay the mortgage. A lender might foreclose if the new owner doesn’t meet the credit guidelines, and also may have a strong incentive to foreclose if interest rates are rising.Steps You Should Take If You Inherited A Mortgaged Property:1. Make sure the property is in your name. Make sure to record the deed at the county recorder’s office.2. Make sure you have property insurance on the property. This includes title insurance.3. Find out if you’d like to sell the property or keep it.4. Call the lender and find out the terms of the payoff, or let them know you’d like to service the loan.

Establishing a selling price.The first course of action if selling privately is to decide how much to sell for. This will be the backbone for your selling strategy. In other words, if you ask too much for your property, people will not even bother to view it and will prefer to buy via estate agents. Ask too little for your property, and you are potentially giving away part of your assets! The right asking price is the perhaps the most essential ingredient in the art of selling your property privately and is the result of thorough market research. Don’t settle for the figure you want to hear, find out the true market value. What have comparable properties have been sold for? And what other owners with similar properties are asking? If your property is unique, then this will allow you to ask for a higher asking price as it cannot easily be reproduced?The most experienced agents will of course provide a valuable source of market information, and will help you reach a conclusion as to a proper valuation and a correct asking price for your property. At the end of the day you must be convinced that you are asking as much as you possibly can, whilst still attracting buyers. You must take into consideration the amount you are saving by selling your property privately and take enough of this off your asking price to make your property attractive to buyers. However, you must also take into consideration marketing costs, eg advertising in papers and on websites, although this should only be in the hundreds rather than the thousands. An asking price is not necessarily going to be the sales price at the end of the day. Therefore, the intelligent seller should also consider building in a reasonable margin for negotiation into their asking price.However, remember that if you do not take enough off then you must be prepared for a lot less interest from both prospective buyers, resulting in fewer showings of the property and a waiting game.Beware of agents who tell you what you want to hear: too many agents purposely overvalue homes to get a listing and let their sellers down over a period of time. Consequently, there are too many overpriced properties on the market, sitting there with no viewings whilst the seller has assumed that the asking price was reasonable.Providing market conditions are favourable, and there is an abundance of clients looking for property similar to yours, a successful sales strategy should result in at least two or more showings per month. Finding a buyer is, in many respects purely a numbers game: the more people who view the property, the more likelihood that one of them will fall in love with it and put in an offer. Some buyers will negotiate with a you, and others will be less difficult. But it’s easier to refuse a low offer if you are showing your property frequently.COMMISSION RATESAgents in a resort area such as Marbella will usually ask between 5 and 10% commission. For example 10% on a EUR250,000 villa will cost you EUR25,000!! So you could save EUR10,000 and reduce your asking price by EUR15,000!!!! Which should attract buyers keen eyes!TIPS FOR SELLING YOUR PROPERTY PRIVATELY:o Create a “For Sale” sign. You can do this yourself or preferably buy one. This always results in enquiries.o Take good, well lit, pictures showing off your properties best assets and views.o Take time to write a short description of your property, too long and people won’t read it all, but make sure you SELL it. Add any selling points, terraces, views, talk about the neighbourhood, social events, shops etc, how far it is to the airport etc. If you can provide a video clip then state this as this is obviously highly beneficial and you can email this to enquirers.o Facilitate viewings on as short a notice as possible. If you leave your keys with a neighbour who plays golf three times a week, you might be losing a vital chance to show the property at the buyers convenience.o Ensure that curtains and shutters are open and lots of light floods the property when it is shown.o If there are any small repairs or repainting that would enhance the overall appeal of the property, it’s well worthwhile getting this work done. Although it goes without saying, a clean house is a desirable house, and many buyers are put off if the property is grubby or untidy. Make sure the place is spotless and you will instantly create a favourable impression.o If you intend to sell your property with some furniture, it is most important to make an inventory right at the beginning and list these. Many a sale has been on the brink of falling though when a buyer thought that the painting over the fireplace was included, and felt that the seller was “too mean” when he learned that it was not! Negative energy during a negotiation can be avoided by having a clear inventory in writing from the outset.o If you are frequently travelling, it often makes sense to leave a power of attorney with your lawyer enabling him to sign a private contract on your written fax instructions. You can negotiate the details of the sale with your buyer’s solicitor by telephone, fax and email. The power of attorney allows the “first step” towards the sale, which is the signing a private contract, to take place without delay.o Make sure that you are fully aware of your tax obligations when you put your property on the market. Meet with your lawyer and tax advisor, and find out the options open to you, to ensure there are no surprises when you eventually enter into negotiations to sell your property.o Remember that selling a property in a resort area is not usually a rapid procedure, even in good market conditions. Properties can stay on the market from three months to over a year, depending on the market, the location, condition and general desirability of the property, the effectiveness of the sales strategy and, of course, the asking price.o Once a sale is accomplished, your lawyer should take the lead role, and draft the sales contract and supervise the eventual completion of the sale.o Points to consider when a negotiation is taking place: Is the buyer expecting a counter offer from you or has he given you a one-and-only, take-it-or-leave-it offer? Does he have other properties in mind if he doesn’t buy yours? Is his offer a fair one? Are all details included in the offer — price, target contract date, deposit, completion date, precise understanding of what is included in the sale in the way of fixtures, fittings and furniture, and who pays the municipal “plus valía” tax? These items should be agreed upon at the outset and before lawyers are instructed and above all, should not be negotiated “piecemeal”, to avoid unpleasant surprises.o Once you make up your mind to proceed, and with an understanding of “emotional factor” of the buyers of second or retirement homes, where they can change their minds abruptly, move quickly (but surely) to close the deal.You can list your property on sites that advertise private property for sale, in newspapers (which is cheaper than you might think) and by word of mouth.In summary, selling a property privately can be as easy or as complicated as any task involving personal affairs. Competent, honest, professional help by lawyers and tax advisors can go a long way to help you manage a sale objectively and more easily.

To be a top commercial real estate property manager you need to have solid market knowledge but you also need a comprehensive set of personal skills to match the needs of the property and the clients that you work for.Many managers will graduate from ‘residential’ property, and move into ‘commercial’ property as part of growing and expanding their career. Whilst the idea is good, there are many factors and issues involved in changing property type. Commercial property is very different and much more complex than residential property; the knowledge base required of a person providing management services is far more extensive.I do not want to scare you away from commercial property management as a career; but I do want you to respect the skills and knowledge that you will need in the role. The fee for managing a commercial property is substantial, but with that comes the requirement for personal skill and property control on the part of the manager and the agency.In talking about this, I am not at this time specifically bringing into the discussion retail property. Retail shopping centre management is even more complex than commercial management. The fees in retail property are for this reason generally higher than that which applies to managing commercial property.Here are some other main skills required of the property manager in performing their daily and weekly duties.
Negotiation skills will always feature as part of the job specification. Negotiations will be diverse across many different situations including property leasing, contracts and negotiations, maintenance contractor’s, tenants, solicitors, accountants, and landlords. The commercial property manager needs to have professional skills and suitable training when it comes to these diverse negotiation requirements.
Leasing situations will arise continually from the managed properties. The larger the portfolio, the more frequent the leasing requirement. In my opinion the property manager should be well skilled in leasing structures and or leasing negotiations. In this way they can help the landlords that they act for as part of selecting a new tenants for the managed investment property.
Lease documentation will vary greatly from property to property. This then says that the property manager needs to understand the differences in leases, how to bring them about, and how to interpret them. Rent reviews, rental structures, maintenance, option terms, refurbishment requirements, and tenant covenants are all unique situations that require specialist review with each and every lease in a managed portfolio. Critical dates will arise from every lease document as part of the management process. Many an inexperienced property manager has overlooked critical dates in the leases only to find that the landlords position has weakened considerably as a direct result.
Income and expenditure analysis will occur throughout the financial year for a managed property. The income needs to be optimized, and the expenditure needs to be suitably controlled. The difference between the two is the net income and that will have a direct impact on the value of the property for the landlord. It is the property managers duty to ensure that the best outcome is achieved given the prevailing market conditions.
Tenant communications should be well maintained throughout the year. When tenants are overlooked or ignored by the property manager, relationships soon sour, hence this exposes the property to unstable rental and or vacancy factors. Keep in contact with all tenants on a regular basis. Record all communications in writing so that the necessary evidence is available if any lease situation becomes the subject of a dispute.
Landlord reporting and controls will be unique to the particular landlord. Whilst most agencies have some form of income and expenditure controls and specific reporting processes, it is up to the property manager to interpret the reports and provide the necessary recommendations. Every monthly report produced for the managed property should be carefully checked as part of the month end process.
Maintenance controls will involve essential services and maintenance contractors. The age of the property will have some impact on the strategies behind repairs and maintenance. The complexity of the property and the tenancy mix will also have impact on the maintenance activity. Every lease should allow for the permitted use relating to the tenancy. Maintenance may be part of that process and certain maintenance costs may be applied to the tenant or the landlord depending on the particular lease situations. I go back to the point that each lease needs to be fully understood by the property manager.
Property performance is achieved through a fine balance of all of the above issues. That is why special skills and knowledge are part of the job specification for a commercial property manager.