You should ask AI (really, it is very good on these questions) since we are appraisers and just a small sliver of the process.
AI said:
"You’re in a good position here—both because of the equity and because you already live in the home. I’ll walk through each question and a few “next steps” specific to an inherited/estate situation in Ohio.
1. Do you really need a real estate agent?
For what you’re trying to do (buy your mom’s house from her estate, not list it on the open market), you usually do not need a traditional buyer’s agent.
Consider:
• The “finding a house” job is already done, and there’s no marketing or showings.
• An agent’s biggest value in a normal sale is pricing, marketing, negotiating, and paperwork with strangers; here, price is typically based on appraisal and family/estate agreement.
• In Ohio, it’s common for people in estate situations to use a real estate attorney instead of a full-service agent to draft the purchase contract, handle title, and protect you with contingencies.
A very typical approach in your situation is:
• No buyer’s agent.
• Possibly no listing agent either, if the estate is selling directly to you.
• Hire a local real estate/estate attorney for a flat or hourly fee to:
• Draft the purchase contract between you and the estate.
• Coordinate with the title company.
• Make sure the estate and probate paperwork are correct so the deed can be transferred cleanly and you don’t have problems later.
Given your background and that this is a “captive” deal, paying 5–6% commission to agents may be unnecessary if you have a good attorney.
2. With all that equity, do you still need 20% down?
No, you do not automatically need 20% down—even without the estate equity.
The key concepts:
• Equity in the house vs. your cash down payment
• Lenders care about the loan-to-value (LTV) ratio: loan amount ÷ appraised value.
• Your mother’s house is worth ~245,000 with about 136,000 owed.
• If you borrowed, say, 200,000:
LTV = 200,000 ÷ 245,000 ≈ 82%.
• That means there’s 18% equity.
• How this usually works in an estate-to-heir purchase:
• The estate “sells” the home to you at an agreed price (often at or slightly below appraisal).
• Your new loan pays off the existing 136,000 mortgage at closing.
• Any “net” cash above 136,000 (less closing costs) belongs to the estate and is distributed according to the will/probate (even if that ultimately comes back to you as an heir).
Because there is so much equity, you have a few options:
• Structure the price and loan so that:
• The estate still gets what it is supposed to receive.
• Your loan amount results in LTV of 80–97%, depending on the loan program.
• If you qualify for:
• Conventional loan: You can put as little as 3–5% down, but with <20% down, you’ll have private mortgage insurance (PMI) until you reach about 78–80% LTV.
• FHA loan: As little as 3.5% down, but with upfront and monthly mortgage insurance that lasts longer.
• In some cases, because this is an “inheritance purchase” and there’s a lot of equity, lenders can structure the deal so that the estate’s equity effectively counts as your down payment, and you bring very little or no cash (beyond closing costs) to the table.
Given your numbers, you should not assume 20% cash down is required. Focus instead on:
• What your monthly payment would be at different loan amounts.
• Your ability to qualify on income, credit, and debt-to-income ratio.
• Whether you want to avoid PMI (which argues for LTV at or below 80%) or are okay with PMI to keep more cash in your pocket.
3. Bank vs. mortgage broker
Both can work; the best choice is usually “whichever gets you the best terms and will handle this specific situation competently.”
Mortgage broker (or independent mortgage company)......."
