Thanks for tuning in today because today’s topic is a very common scenario: inheriting a house with siblings in San Diego. My name is Brian of Trusted House Buyers and today we will explore what you can do when inheriting a property with your siblings.
Do you have siblings? If you do, then you know we live in an imperfect world, which means siblings rarely agree on everything. Tensions may rise even higher with the emotional toll of losing a loved one. Inheriting a home can be a blessing, but when you inherit a property with one or more siblings, it can cause unwanted stress and emotional turmoil for all parties. Unless the will explicitly states otherwise, inheriting a house with siblings means that ownership of the property is distributed evenly and equally among parties. But siblings do have quite a few options to decide upon when confronted with this situation.
These are options for how siblings might be able to come to an agreement on what to do with an inherited Home.
The most important thing families can do when transferring or sharing property is to be transparent, otherwise you run the risk of ruining relationships. If siblings inherit a property from their parents as an example, there are a handful of options to decide upon that will ensure that each sibling’s needs are met.
One option is to Share the House With a Formal Agreement
If all the siblings inherit the property equally and want it to keep it, it’s important to establish a partnership agreement that establishes rules, such as how often people get to use it, who takes priority and guest privileges. Nothing can cause more stress than assuming you are all on the same page and then to discover you are not when a problem pops up!
Another option is to structure a buyout:
Again, unless otherwise stated, most properties are inherited and divided equally among the parties. There can be a situation where one sibling wants to buy out the other, and this means they could finance that portion of the home’s value. The first order of business is having a fair, independent home appraisal that will let you know how much the property is worth and how much you would need, to buy out your siblings. Once that number is agreed upon, you can pay your sibling for their share, or maybe finance it, and transfer the deed into your name only.
Another idea is to rent it out and split the profits:
Siblings may agree want to turn the property into an investment, whereas everyone can benefit. And that doesn’t sound like a bad plan! Turn it into a rental property that can produce future positive cash flow for you and your siblings. The challenge here might be the management of it. A property manager is a great investment in this situation as it allows the owners to take a step back from the day to day operations and that fact in itself could quite possibly create a more harmonious environment for you and your siblings.
Another option when things get difficult is to use a partition suit to resolve a conflict:
If you and your sibling simply cannot come to a resolution, you can involve the courts, although hopefully that is the last resort for most people. A partition lawsuits asks the judge to order the home’s sale in order to terminate the co-ownership – but the legal process is rarely that simple. Typically, the judge will require a mediator to act as an almost referee between the two parties. This also comes at a price. This definitely is a stressful situation that most families do NOT want to be involved in. You may even need to hire an accountant to divide the proceeds, which can seriously limit your profits. This may seem obvious but to avoid these extra costs, try to settle any conflicts with your sibling on your own by using other avenues.
One final option is: Sell and Split the Profits
If none of the siblings want to hold onto the property, the simplest solution is to sell it and share the proceeds as part of the estate. One route is to interview several real estate agents and deal with the hassles of open houses, ridding the home of any personal items and conducting cleaning and repairs. If you choose to sell, it’s important to have the house professionally appraised as well. An alternative, especially if the home needs work, you’re of town, or if you just want to no longer have to deal with your siblings is to reach out to our company. This is a situation that Trusted House Buyers has seen time and time again. When we can come in and close in a week with no repair work needed, no cleaning and you can leave all unwanted personal belongings begins, sometimes it’s a welcomed option to get cash and move on.
Bottom line is this: whatever inheritance situation you find yourselves in, be informed about each option and find the one that most suits your situation. For more information on inheriting a property with siblings in San Diego, you can always call us at Trusted House Buyers by dialing, 619-786-0973. We’d be happy to talk about working with us as an option and how that might benefit your particular needs. Thanks for watching.