Alt-tag: A woman giving the set of keys to a man in front of a white and red sold sign
It’s very rare to find siblings that agree on everything. If you add losing a loved one to the equation and having to sell inheritance property with siblings, you can expect emotions to run wild and tension to break loose. Inheriting a home with siblings can create difficulties that can lead to emotional and financial stress for everyone involved. So regardless of if you and your selling are selling a luxury estate or just an average home, you can expect complications. That’s exactly why we’re here – we’re going to explain your options when inheriting a property with siblings and if you decide to sell, how to do it in the easiest way. We hope that we’ll be able to help you make this process enjoyable and equitable for you and your sibling.
Inheriting a property with siblings
If it’s not specifically stated in the will, inheriting a property with siblings means that the ownership is distributed equally. In a way, this complicates matters. It’s very rare nowadays for siblings to physically divide a house and reside in it together.
Caption: Inheritance is divided equally unless the will defines specific terms.
Alt-tag: A photo of last will and testament where it’s determined how to sell inheritance property with siblings
In these cases, most people decide to sell the inherited property. However, there are always cases where one family member wants to keep the property in the family. That’s when siblings can negotiate if and how to sell the home and divide profits. In cases like these, it’s very beneficial to accept a cash offer.
Therefore, it’s very important to voice your thoughts and desires if you are in a similar situation. You want to be clear on whether you want to keep the property in the family, sell it, or perhaps even rent it with your siblings. This should be done at the very beginning of the process so you’ll avoid any potential complications.
It’s not so rare for siblings to have major disagreements and even end up not talking. Therefore, it’s always better to have neutral professionals helping in different parts of the process. For example, the team from homegrownmoving.com even suggests hiring professional packers when the time comes to empty out the property. That way, you’ll avoid any potentially stressful situations with your siblings.
What to do with an inherited property?
Before you and your siblings hire a real estate agent to help you sell your inherited property, it’s important to understand you have other options to consider.
Caption: Another option is to rent the inherited property and share income with your siblings.
Alt-tag: A for sale sign hanging from the wall with the blue sky in the background
Here are the most common options for splitting an inherited property between siblings:
- Selling the home is probably the easiest solution. Siblings would divide the proceeds from the sale according to the percentage shares that each sibling had been designated by the will.
- Renting the home is another great option, especially if siblings want to keep the home in the family. They would divide rental income among them.
- A buyout is a perfect option if one of the siblings wants to keep the property while others don’t. An interested sibling can offer to buy out shares from siblings that are not interested in keeping the property.
- Siblings can also make a private arrangement between themselves and agree on how to proceed. For instance, if they both inherited shares of a residence and a holiday home, each sibling could keep a property. Of course, if they are worth roughly the same amount.
- If the siblings can’t reach an agreement, they might involve the court and use a partition suit to resolve the conflict. Unfortunately, as conflicts between siblings are very common, this is usually the most used method to decide on inheritance division.
Ways to sell inheritance property with siblings
If you decided to sell your inheritance to a third party or if one of your siblings decided to buy it out from the rest, further in this article you’ll find out the necessary information that will help you make this process easy and quick.
Most properties are inherited evenly. This means that you and your sibling are likely to get 50/50 ownership of the property. In case one of the siblings wants to keep the property, they will need to buy it out from the other sibling. Basically, they would need to finance half of the home’s value.
Have in mind that the most important part of this process is having a fair home appraisal (or property valuation). In this process, the appraiser will determine how much the property is worth and thus, how much a sibling needs to pay to fully own the property. Once you know the value, the siblings can process the buyout and deed transfer.
If you are the one sibling that wants to keep the property, have in mind that conventional lenders don’t usually offer this type of refinancing. However, you can consider asking hard money lenders for a loan.
Sell inheritance property with siblings and divide the profits
In case you and your sibling have decided to sell the home and split the proceeds, the next step is to hire an appraiser to determine the property’s value. As mentioned, this is the most important part of the process. It will determine how much profit you can expect from the sale.
You’ll also have to determine who in or outside your family will get the right of first refusal. This is a clause in a lease or contract that allows the holder to “do business” with other contracting parties before anyone else.
In simple words, this means that an interested buyer has the right to be the first party to give the offer. In case another party expresses interest, this buyer will have an advantage over the second interested party to purchase the home. Alternatively, they can back out and allow the seller to consider other offers they’ve received.
What else to be mindful of?
When selling an inherited home, you and your siblings should also decide which things you want to keep and which to sell with the home. It’s worth looking at as older homes can be a source of hidden treasures and unique pieces you’d love. If you do decide to keep some belongings, don’t risk damaging antique pieces but make sure to hire experienced movers to transfer them in the safest way possible.
Caption: Make sure to consult an experienced real estate agent who will help you handle the entire process.
Alt-tag: Two people sitting on the couch in an office and talking
Lastly, keep in mind that capital gains tax is something you must pay when you sell an inherited property if it has gained value since the time you got it. This means that, in case you manage to sell your inheritance quickly, you might not need to pay the capital gains tax as the value of the property didn’t have enough time to change.
The bottom line
We hope our advice helped you sell inheritance property with siblings. Even though these processes tend to get emotional and sometimes even overwhelming, it’s important to remain rational and fair. If you get sentimental, remember that you’ve chosen the best option for you and your siblings.