Settling your inheritance after the death of a loved one can be an incredibly stressful time for a family, especially if you are in a rush to sell it off so that you can split the money between you and your siblings. Also, having to deal with things such as organizing the necessary maintenance work before you list the property up for sale can be quite demanding. Add the endless paperwork, lawyers, and court proceedings, and you just might even become completely overwhelmed. For this reason, we will talk about the issues that may arise if you are selling an inherited property with siblings and ways you can solve them easily.

Decide whether you are going to sell the place

The first hurdle anyone who has ever inherited a property has to overcome is the question of consent. Your family ought to sit down and make this critical decision – the sooner, the better. And these can be very emotionally charged disputes.

For example, one of your siblings might struggle financially and insist on selling the home and the items inside as soon as possible. As harmless as this may sound, sometimes families driven by financial urgency make the mistake of selling to the first interested buyer for a lower price than the property’s market value.

Also, some renovations may improve your return on investment quite a lot, so it is not such a good idea to rush into selling. Sometimes, family members insist on bringing in contractors as soon as possible. However, your inherited home may need a thorough decluttering before you jump into construction work. Placing the items in a safe storage unit might be a better idea until you decide what to do with them. So, storage is the perfect solution if you plan on doing a major remodel in the inherited home.

On the other hand, you might be convinced that your sibling’s suggestions are not in the family’s best interest. These discussions can quickly turn into straight-up arguments. You might ruin or exacerbate your relationships if all sides do not go into this with patience and camaraderie.

That is why you should not postpone negotiations with your siblings. As each of you might have a different plan for the property, you will have to make an effort to find a solution that will be satisfactory for everyone.

Legal options when inheriting a property with siblings

First, you have the option of selling the place and splitting the money equally. This is probably the most painless, convenient way to approach selling an inherited property with siblings. However, you also have the right to resist any relative’s insisting they want to keep the home.

If you and your siblings decide to sell the home, the following steps are just the same as if you were selling your own. So, you can list it on an open market through a real estate agent, a property auction, or sell it for cash through a fast sell company.

Buying out other siblings

If you cannot reach an agreement, the sibling who keeps the property has to purchase their siblings’ parts of it. If the property is large, the sibling who is in favor of selling might even sell it to a third party. However, keep in mind that real estate agencies and homeowners rarely decide to buy only a small proportion of a property. So, this is a realistic solution only if the property has more than one housing unit.

If you decide on this course of action, the siblings will have to settle on a single value. You might even have to pay cash for your siblings’ share. But, in some cases, you might be able to take out a mortgage. If this is not an option for you, you might close a deal with your sibling to make them your lender.

Therefore, you can purchase the property by paying a monthly fee to your sibling until you buy off their share. It is advisable to make the payments through a legal channel to avoid possible family disputes in the future.

Joint tenants vs. tenants in common

Of course, you can avoid disputes of this kind fairly easily. The best way to dodge getting into long, drawn-out inheritance fights is to draw up a will that delineates the proportion of the property and the rights of each sibling.

So, if your parent or other family member decides you are joint tenants, this means that each sibling holds equal rights to the property. In case of the death of a sibling, their share of the property is transferred to other siblings automatically.

On the other hand, there is also the option of labeling each sibling as a tenant in common. Translated from legalese, this means that all siblings own a clearly specified proportion of the property. So, if the siblings make a joint decision to sell the home, they will split the money according to the percentage they have been appointed in the will.

Keeping the property as a rental investment

However, selling off the home to your relative or a third party is not the only solution to your inheritance problems. Namely, you and your sibling(s) may decide to treat the property as a source of extra income. So, by being a co-owner of a property, you can earn extra money by renting instead of selling the place. This is the perfect solution for people who want to keep the home in the family.

This is something people decide to do even in the ‘one sibling buys shares of the other’ scenario. So, if you want to purchase the property from your family, you may suggest buying it off in installments with your share of the rent money. This can be a good deal for everyone, especially if you commit to repairing and improving the property before renting it out. If your plans not to sell the home change in the future, the remodeled property will be much easier to sell for a good price. So if you want to avoid selling an inherited property with siblings as a fixer-upper, this is the strategy for you.

Selling an Inherited Property with Siblings by Sally Norton