News & Insight

Helping Homeowners Through Loss: A Practical Guide for Realtors and Mortgage Lenders 

Homeownership can be complex after losing a loved one or experiencing a major life change. Here are a few ways you can support clients navigating the financial and emotional decisions following a loss.  

By giving practical advice, clear communication, and referring them to the right professionals, you can help them rebuild their lives after loss. 

1. Estate & Inheritance Planning 

• Advanced Estate Planning: In inheritance cases, refer your client to an estate attorney with experience in real estate and probate law. They’ll advise on how to transfer property, handle joint ownership, or navigate inheritance tax issues, especially if there are multiple heirs. 

• Tax Implications of Inheritance: Encourage your client to meet with a tax advisor who specializes in estate taxation. Understanding capital gains tax on inherited properties or estate tax exemptions will help them make informed decisions about whether to sell, hold, or refinance. 

• Title Transfers: If a property was transferred due to death, the title might need to be updated. Let your client know that a transfer of ownership can require specific documentation, like a death certificate and a will, to be filed with the county recorder’s office. 

2. Mortgage Modifications & Refinancing 

• Mortgage Assumption: If a spouse or co-borrower has passed away, and the surviving homeowner wants to stay in the property, they might need to assume the mortgage. Make sure they're aware that some lenders offer mortgage assumption, allowing them to take over the loan without refinancing. 

• Refinancing After Loss: If the surviving spouse or heirs are dealing with a change in income due to loss (death, divorce, etc.), make sure they know about refinancing to potentially lower their mortgage payments. This may also require a complete reassessment of their financial situation. 

• FHA/VA Loan Relief: If your client has an FHA or VA loan, there are specialized relief programs (such as the FHA’s "FHA Streamline Refinance" or VA’s "Home Loan Guaranty") that can assist surviving spouses or heirs with mortgage modifications or altered loan terms. 

• Forbearance Programs: If the homeowner is unable to make payments due to loss of income, make sure they know about forbearance or deferment options. Some lenders have special hardship programs for those affected by death, divorce, or severe illness. 

3. Property Sale or Retention Strategy 

• Divorce and Property Settlement: In cases of divorce, the division of property can be complex. Help your clients understand that they may need to sell the home to split equity or to meet terms set by the divorce decree. Working with a family law attorney who specializes in real estate can be essential in this case. 

• Real Estate Investment Planning: If your client inherits property, they can choose to retain it as an investment or rental property. Offer to connect them with property managers or specialized real estate consultants to evaluate the investment potential of the property, along with any tax implications, ongoing maintenance, and liability considerations. 

• Understanding Local Market Trends: Talk with your client about local market conditions to help them decide whether selling immediately, waiting for the market to improve, or holding onto the property for a future sale would benefit them the most. A comparative market analysis (CMA) tailored to their specific situation is great to have here. 

Final tip

Have contact information for estate attorneys, tax advisors, family attorneys, and other professionals ready to share with your client. Other forms of marketing are great, but nothing compares to a word-of-mouth referral, especially when it comes from an agent or lender you trust.