How to Manage an Inherited Property With Your Siblings

So you’re inheriting land with your siblings—now you just need to figure out what to do with it. Do you sell the property? Keep it up? It’s a complicated issue, as this type of inheritance most often comes into play due to the death of a parent. There may be strong emotional attachments to the ancestral home, but you and your siblings might not be in a position to actually dwell there. So what do you do? 

How to Manage an Inherited Property Split Between Siblings 

When inheriting land with siblings, the most important thing is to ensure that all inheritors are in agreement about whether to keep, rent, or sell the property. This means you’ll all need to get together and have a candid conversation about what is to be done. If you aren’t in agreement, or if you don’t all have the same expectations, the property can become a source of tremendous conflict.

Your general options include: 

Establish a formal agreement to share the home

If all siblings share an equal stake in the home and agree to keep it, you will need to establish a formal partnership agreement that covers usage rules, occupancy, and how the expenses will be shared. This type of agreement can eliminate any disputes if all siblings want to use the house as a vacation home, establish residency within the home, or rent it out to tenants. 

Structure a buyout

What happens if one sibling wants to keep the home and a second sibling has no interest in it? In these situations, a buyout may be the optimal solution. The executor of the estate can determine the monetary value shared by each sibling and determine an optimal buyout for the siblings who want to surrender their shares. If one sibling doesn’t have the capital to buy out the home, they may qualify for a home equity loan on the property. 

Sell the home 

If the siblings cannot come to an agreement on how to manage the home, or if everyone agrees that the home isn’t worth keeping, it may be in everyone’s best interest to sell the home and split the profits. Unfortunately, selling a mutually inherited home is a bit more complicated than your typical real estate transaction. 

Selling Your Inheritance Property 

If you decide to sell the inherited property and split the cash, the property will first need to go through probate. This is the process by which the court validates the will of the deceased and determines the value and rightful ownership of the inheritance property. 

The probate process can take several months, often more than a year, but if you’re eager to sell, the house may qualify for a summary probate—an expedited probate process. This option is available in most states for small- to modest-sized homes. When the probate process is complete, the executor of the will can settle all outstanding debts and commence with the sale process. 

Before you can sell, all siblings must formally agree to the transaction. If one or more siblings disputes the sale, you’ll need to enter a negotiation process. But if everyone is in agreement, the executor can petition the court to allow the sale. Once the sale is approved, the rest of the process is similar to any real estate transaction. 

The only major difference is that all of the siblings will have to agree on key details such as:  

  • The process by which the home will be sold (via a realtor, FSBO, auction, or short sale)
  • The asking price for the home 
  • Whether or not to make any specific repairs or renovations prior to selling the home 
  • Who will oversee showings of the home 
  • Whether or not to accept a particular offer on the home 

In many cases, the inheritors will assign one sibling to oversee the process. This can simplify the sale, but it can also lead to conflict if the other siblings aren’t kept in the loop throughout every stage of the process. 

Can Siblings Force the Sale of an Inherited Property?

In the event that the siblings cannot come to an agreement on what to do with the home, one sibling may try to force a sale of the property. This is typically done with the help of a partition action. 

This type of extreme measure should always be a last resort, as it can be a tremendous source of conflict. When a sibling files a partition action, they’re effectively petitioning the court to force a sale of the house.  

When such a motion is filed, the court will typically rule in one of three ways. 

  • It may allow one sibling to buy out the others
  • It may physically divide the property between the siblings
  • It may rule that the house be sold and the money be split between the siblings 

Once the partition action is filed, it cannot be reversed. One way or the other, the property will be sold. It’s best to avoid this type of conflict in the first place. 

How to Avoid Conflict When Selling Your Inheritance Property 

When inheriting land with siblings, the last thing you want is for your inheritance to become a source of familial strife, but sadly, it happens all too often. If you decide to sell, remember the following golden rules for conflict mitigation: 

  • Transparency, transparency, transparency. Make sure that every detail is on the table, and everyone is in the loop. 
  • Don’t be afraid to compromise. It’s highly unlikely that everyone will agree on the details. Acknowledge this up front, and agree to meet in the middle where possible. 
  • Get everything in writing. It’s extremely critical that you draft a formal agreement that outlines all aspects of the proposed sale. 
  • Don’t let the sale drag on for months. The longer the process goes on, the more likely it is that conflict will arise. So consider being flexible with the sale price and entertaining all reasonable offers.  

If you just want to liquidate the house and move on with your lives, a short sale may be in your best interest. For instance, at Get Fair Home Offers, we buy houses in Los Angeles for cash, and we can close in as little as a week. There are no obligations, and we take care of everything from the repairs to the inspections. Working with an investor who offers cash payments is the easiest way to close quickly with minimal headaches. 

Whether you decide to keep the house or sell it, the important thing is to remember that you’re all in it together. Make sure that everyone feels good about the decision and is able to achieve the closure they deserve.

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