Considering selling inherited property with siblings?
Families can be complicated. I have two sisters myself. We don’t always see “eye to eye” in picking a restaurant, let alone selling a parent’s house now owned with family.
A brother or sister may be living in the house and not want to move out. You might want to buy it out it from siblings if you reside in the home. You may be wondering if heirs can force the sale if you inherit a parent’s house and just want to sell. Selling a parent’s house after death piles on a stressful situation.
Options are available when you share property with family members: buy-out a sibling, sell a share of inherited property, selling it to family, or having courts force the sale.
Check out Earl’s intro video 🎥 on behalf of the House Heroes Team, advice from attorneys and real estate professionals, our “Top 10 Tips”, and personal stories from people who inherited and sold a parent’s house.
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Call Us (954) 676-1846 or Fill Out This Form For Your FAIR Offer.
I inherited my parent’s house with my siblings. What should I do if I share property with family members?
You have a few options options . . . let’s walk through each!
Sell The House To A New Owner.
Selling an inherited house outright to a new owner is the simplest approach.
Line-up a buyer. Close on the property. Divide sale proceeds among the heirs.
It doesn’t get any easier than that. (Of course, the challenge is usually getting everyone on the same page – not the sale process itself).
Keep The Property As a Rental.
Hot neighborhood with expected appreciation?
Strong rental cash flow in the area?
Don’t need money immediately?
Have a good relationship with siblings?
If you said yes to all those questions, inheriting the property and keeping it as a rental is a great option.
There are very few long-term investments better than real estate. In the words of a young Andrew Carnegie, “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.”
Of course, renting property isn’t easy. Tenants make late night calls complaining about minor issues. Evictions. Lease violations. Vacancy and tenant turn over. On-going fees of property manager, utilities, maintenance. Living far away makes it even harder.
Go the landlord route if you live nearby, it’s a good investment area, and family members can have a good working relationship.
On the beach. In a beautiful city. Near natural recreation. Unique and irreplaceable.
Perhaps your parents wanted to pass on a home for all family members to enjoy from the present through future generations.
A vacation home is a great place for families to stay in touch, and cousins to grow up together.
A close knit group looking to build relationships further? If you’re on the fence about what to do when you share property with family members, consider sitting down and talking about keeping it.
Personal Story – Selling Down The Road: When our mom passed in 1988, the house she bought after retiring from her civil service position in the District of Columbia sat empty. For a couple years, my younger sister and considered not selling it for sentimental reasons. The house needed a lot of work neither of us wanted. Neither of us lived nearby, wanted to invest in repairs, and did not want to move there. I lived in Georgia so living in it was not an option. A gentleman expressed interest in purchasing it and we both agreed to sell. As my sister lived about three hours from the house, she did most of the transaction. I participated by conference call or fax as needed. I offered to my sister to keep three fourths of the sale proceeds as my spouse and I had excellent jobs – but she insisted that we split the sale price equally because that’s what our mother would have wanted. Despite a few tears on both our parts as we parted with it all in all the sale went extremely well. Carol Gee, Author in Atlanta.
Set the price
This is probably the biggest problem all siblings who are selling a property together have to deal with – how much money should they be asking and how should they decide on the price? Picking the right price for any property is a lengthy and complicated process, and there are several factors you need to take into consideration: the size, the location, the style, the number of rooms, the outdoor area, etc.
However, what’s even more important is making this decision together with your siblings and knowing you’re all absolutely behind it. If that doesn’t happen, someone is always going to feel they’ve been cheated by people who are close to them and who they’re supposed to trust.
Pick the negotiator
Negotiating with potential buyers is another tricky situation nobody wants to get involved in, but you simply can’t avoid it if you want to sell your home. Moreover, if you’re not alone in this process, you can’t handle the negotiating process on your own. That’s why choosing one person who will lead the negotiations is always a better idea, especially if there are several siblings selling their childhood home together.
Once you’ve set the selling price, just make sure the person you’ve picked knows what to do and how low they can go. You should all be happy with the negotiator you’ve picked, and once you do that, you need to stay out of the selling process and let the sibling you’ve chosen represent you and take care of everything on their own.
Divide the possessions
Selling your childhood home isn’t like selling just any random property. This particular place is full of memories and is always going to have a special place in your heart, and as well as your siblings’ hearts, which is why you can’t sell it that easily. What you need to do is pick the things you’d like to keep from it and figure out a way how to divide them so that everyone gets what they deserve.
If you’re talking about something that was only yours – your own crib, toys, clothes, etc. – these things should belong to you. If you’re dealing with something you shared with your sibling – your bunk bed, a bicycle you both used, books you both read, and so on – don’t be petty and just divide them fairly. After all, it’s better to lose a childhood memory than a sibling.
Upgrade the place
Speaking of material things, this is an idea you may not be particularly fond of, especially if you don’t like wasting money on things that don’t seem that important at first. Still, you need to remember that you’re going to have to invest some money now in order to make more money in the future. Upgrading your property before selling it sounds like the worst idea in the world, but it’s actually going to help you sell it at a higher price.
Some of the things you should explore include renovating your bathroom, refurbishing your living room, and equipping your kitchen with new appliances. These things don’t sound like much at first, but just imagine how impressed your potential buyers will be once they see new bathroom fittings, brand new sofas, as well as a powerful range hood they’ll be able to use on a daily basis in the years to come!
Deal with the paperwork
Not that many people know that selling a property requires a lot of paperwork because dealing with taxes and regulations is neither easy nor cheap. You need to invest a ton of time and money into these things, and it just gets more complicated if there’s more than one person involved.
Again, assigning one sibling to take care of the paperwork is the way to go. This way, you’ll always know who’s responsible for getting things done, and you can trust your sibling to do it right. This won’t just minimize your stress level, but also ensure the paperwork is handled carefully, responsibly, and adequately.
Look into the taxes
This is an issue people generally don’t pay enough attention to – not because they don’t want to, but because they don’t know how important this really is. But, the truth is that taxes are very important when selling a property, and you need to look into them as soon as possible. This includes the taxes you need to pay before selling your home, as well as those you should pay afterward.
Once more, finding a solution before the entire process begins is crucial. Instead of fighting with your siblings over who will pay the taxes, calculate the total amount that needs to be paid and cover it together. This way, you’ll all spend an equal amount of money, and everyone will be happy.
Consider Hiring A Realtor
Doing everything on your own is quite all right – if you know what you’re doing, of course, and have some experience with the real estate market. If that’s not the case, though, you may be in over your head, dealing with things you know nothing about, and that’s not the scenario you want. So, getting some professional help is always better, and that’s why you need to find a great realtor you can rely on.
Lots of people are still not sure whether they should list with a realtor or sell their home off-market, so learning a thing or two about these alternatives could help you make the right decision. Both solutions have their pros and cons, so think about them and talk to your siblings as well, trying to reach a decision together.
Pick the best buyer
This is another hard decision and an issue that could cause a problem between you and your siblings because you may not agree on who the best buyers for your property may be. You could meet with a number of them, and they could all seem like decent people you can trust, but there can be only one choice, and that’s a choice you need to make together.
Again, talking to your siblings and asking them for an opinion can really go a long way. This may sound like an easy solution that won’t work in reality, but it’s still the only thing you can do. Ask for their input, hear them out, make a list of every buyer’s advantages and disadvantages, and, in the end, you’ll reach a solution more easily than you’ve thought.
Just talk to your siblings
Selling a house you grew up in can easily turn into an emotional and hard process none of us enjoy, but the good thing is that you’re doing with your siblings. These are the people you’ve known all your life and they’re the ones you can trust the most, so you need to depend on them and work together if you want your sale to be successful.
There are lots of problems that may occur while trying to sell your property, and some of these could jeopardize the relationship you have with your siblings. You could start arguing about the money, the realtor, the buyers, the investments, and other things, so try to avoid these arguments as much as you can. Remember, the people you’re dealing with aren’t here to steal your money – they’re your family and they love you, so work with them, and reach an agreement together.
Avoid all those hidden problems that may occur
In the end, the process of selling your home could take a while, and the more time it takes the more agitated and worked up you’ll get. You and your siblings probably know that this isn’t your fault and that you can’t do anything about it, but that still doesn’t make you any less stressed out, so you need to try to avoid any misunderstandings that may occur.
These misunderstandings could be avoided by paying close attention to all those things that might be hurting your sale without you even noticing them. These range from messy and unwelcoming neighbors and poor parking situation to inadequate insulation and a high level of pollution in your area. Luckily, you have your siblings to rely on, so divide the responsibilities and work on avoiding these hidden problems that could be preventing you from selling your place.
HELP! My family member is living in my parent’s house and won’t move out? I want to sell it. What can I do?
It can be a difficult situation when a brother, sister, or other family member lives in inherited and doesn’t want to leave.
Family’s have three options: sibling buy-out, sell to a rental investor, or a court forced sale if all else fails.
The family member living in the house “buying out” other heirs is the simplest option.
The sibling residing at the inherited property – that wishes to remain there – pays fair market value to the other sibling to become the full owner.
Everyone wins. The brother or sister that won’t move out gets to stay for as long as they’d like. The family members that want to sell the house of a deceased parent gets fair sale proceeds as is no longer on title. No court decisions or hearings are no longer necessary.
However, this resolution requires that the person “buying out” has the financial resources (either cash or qualifications for a loan) available to make a fair payment to other heirs.
Sell To A Rental Investor.
Assume the occupying sibling does not have the financial means to buy out the other siblings.
One alternative to allow the sibling to stay is to sell to a real estate investor landlord contingent upon the occupying family member being kept as a tenant.
Landlords are frequently happy to keep the current occupant as a tenant.
The landlord won’t have any vacancy period where rent isn’t collected. There is no need to spend time and money updating and marketing the property that is required when securing a new tenant.
If a family member refuses to vacate, and will not agree to a buy-out or sale to a landlord, the last option is for the courts for force the sale.
We dive into that in the next section “Can I Force The Sale Of A House” . . .
You can force the sale of a house through the legal action of “partition”.
When multiple family members become owners of a property in a probate case, they do not always share the same goals. One owner may want to rent, another to sell, and a third to live at the property.
When heirs have irreconcilable differences, the law resolves the dispute through a court forced sale called a “partition.”
Partition is a legal term describing an action impacting real property, by a court order or otherwise, to divide up real estate into separate portions representing the proportionate interests of the owners of property. Also known as a forced sale, joint owners requesting partition can sue for “custody”, or full ownership, of their real property. Once granted, the sale can proceed via normal channels.
Partition actions typically occur during a probate case, but also may occur outside of probate in multiple-owner scenarios.
The costs to force a house sale via partition are substantial. Attorneys are paid hourly. Partition actions can result in a multitude of hearings with witnesses and testimony. Amicable resolution is advisable whenever possible.
There are quite a few options when it comes to figuring out what to do when you share property with family members.
We’ve gone ahead and collected the thoughts of various real estate professionals from agents, to investors, to attorneys – see what they had to say!
Michael Kelczewski Website
Michael is an agent with Brandywine Fine Properties. He is licensed in Pennsylvania, Maryland,Delaware and New Jersey, with six years real estate experience.
Residential Real Estate transactions often develop emotively, as it is often an important real estate transaction to the individual’s life. Add family dynamics into the mix, and the potential for complications is high.
Objectivity is important for all stake holders to feel represented. Consider obtaining professional estimates or perspectives, such as an appraisal.The professional appraisal report provides clear logic behind the valuation and helps everyone get on the same. Repair and renovation proposals quotes also help resolve disputes.
As to the property, recognize obsolescent features such as areas requiring cosmetic updates or overly personalized features. When marketing a home, appealing widely translates to a rapid higher priced sale. Communication a key to working with everyone involved in renovating or selling a house. Optimally in-person meetings occur to ease disagreements that might arise miscommunications. I have personally have found compassion and patience benefit all.
Peter White is a founding member of Tenancy Stream. Tenancy Stream provides property managements services to landlords and tenants.
The most emotionally challenging property issues we face are those that involve families. Whereas it might seem that siblings are fighting over equity and returns, there is often a deep and complex personal history behind the conflict.
First, establish facts. Get valuations from at least 5 sources and uncover the legal history of the property – being sure to confirm ownership.
Second, you must establish who are the stakeholders (interested parties) in the conflict. Carefully consider who might be impacted by a potential purchase aside from the immediate beneficiaries. These parties are often ignored during negotiations, but have the ability to influence the beneficiaries, so should be part of the process from the start.
Third, attempt to find a neutral mediator. Ideally, this should be an impartial family member (or friend) with knowledge of the issue, but it is possible to work with a professional mediator. This person should respectfully and privately collate the wishes of all stakeholders, then attempt to find a suitable compromise.
Finally, don’t make family life all about this conflict. Schedule formal time to discuss the issue – focus on your relationships the rest of the time.
Jennifer is a California-based real estate agent and member of the Beverly Hills / Greater Los Angeles Association of Realtors and the California Association of Realtors.
I often deal with siblings when selling properties and let me tell you, it is a tough situation. Unless everyone is on board to sell, and on board at a similar price range, many disputes may arise. If the siblings cannot agree to a sales price, or have a clear understanding of ownership percentages, and/or refuse to buy one another out, then attorneys often get involved. In order to prevent sibling controversies to arise when selling a property, I recommend for my clients to purchase as “tenants in common” when possible. Also, it’s very important to outline percentages of ownership in a legal document (drawn up by an attorney) and have each party or each sibling have their own attorney review the contract.
Daniel is a Keller Williams real estate agent in Metro Detroit and graduate of Michigan State University . He blends old-fashioned service and state-of-the-art technology to help his clients.
I’ve personally handled many sales where siblings were involved in selling a house. The most important thing is communication. It’s important to have everyone on the same page and set expectations up front. All siblings should be involved from the beginning so information is shared with everyone and questions can be answered.
As far as sales price, review current market conditions and recent sales to determine the current market value. One sibling may want a different or higher price, but that doesn’t make the property worth more. The market value is determined by facts and data, not emotions.
One important thing to look into in these situation is to be clear who has ownership of the property. In some instances, there are disputes over who is actually on the deed and title, and who really owns the property. If there are any issues or disputes, it’s better to get them straightened out early on because this can have an effect on the closing or sale of a home if it’s not handled properly.
We Buy Inherited Houses
Call Us (954) 676-1846 or Fill Out This Form For Your FAIR Offer.