Nov 21, 2022 - 10m read
A Guide to Inheriting a House With Siblings
Dealing with an inheritance is oftentimes a challenging situation. While asset division might be simple when only money is involved, things become more complicated when a house is passed down to siblings.
Even if you have happy and lasting memories in this home, you and your siblings may not agree on what to do with it. Whether you want to keep or sell the home, it’s highly recommended that you focus on minimizing conflict with your siblings to make sure that the entire process is handled with care.
Anthony Reinoehl
Co-Founder
Dealing with an inheritance is oftentimes a challenging situation. While asset division might be simple when only money is involved, things become more complicated when a house is passed down to siblings.
Even if you have happy and lasting memories in this home, you and your siblings may not agree on what to do with it. Whether you want to keep or sell the home, it’s highly recommended that you focus on minimizing conflict with your siblings to make sure that the entire process is handled with care.
Let’s say that you and your sibling have agreed to sell a home you’ve inherited from your parents. You may, however, disagree on the need for renovations. If your sibling wants to make major renovations but you want to focus on saving money, you could compromise by agreeing to a smaller and less expensive renovation that will still increase the value of the property before it’s sold.
There are invariably times when siblings don’t get along well, which can be a problem if their parents assumed that they would cooperate with one another when deciding what to do with an inherited home.
Regardless of how well you currently get along with your siblings, choosing to minimize conflict should make it easier to come to an agreement that both parties can be satisfied with. The following is an in-depth guide on inheriting a house with your siblings and what options are open to you.
You’ve Inherited a House With Siblings – Now What?
Now that you’ve inherited a house with one or more siblings, there are certain steps you should take to make sure that everyone’s on the same page. Being in this situation can be overwhelming, which may make it more difficult for the right decisions to be made. Once you and your siblings have taken some time to deal with your recent loss, you can regroup and begin to consider your options.
Have a Family meeting
The first step you should take is to have a family meeting with all of your siblings as well as any interested parties or stakeholders. You should have a lengthy and honest conversation that discusses where everyone stands and what each person wants to do with the inherited home.
Each individual should be given a specific role to undertake while the process of selling or maintaining the home is ongoing. For instance, one sibling could be tasked with handling the property renovations that need to be done. The other sibling could take care of any legal matters that might arise. In the event of a disagreement, try to collaborate and eventually agree to a compromise.
Manage Utilities and Insurance
Once you and your siblings have become to some basic agreements about what will happen with the property, it’s now time to manage any utilities and insurance that are tied to it. If there are any unnecessary utilities that no one will be using, cancel them immediately to save money.
Any utilities that need to stay on should be transferred to your siblings or yourself. You should also get in touch with the homeowner insurance provider to determine if a different insurance plan is needed or if the existing one should be transferred to your name. Make sure that you inquire with your real estate agent about any considerations and timelines that must be taken into account when you sell your home.
Decide What to Do with Belongings
Once the utilities have been taken care of, you and your siblings should decide what to do with the belongings or items in the home that weren’t listed in the will. This situation can be a complicated one if any of the belongings are sentimental items for you or your siblings.
If there are numerous pieces of furniture and other large items that you don’t want to haul away, consider holding an estate sale, which allows you to get money for any items you and your siblings don’t want. This money can be split between each sibling or used to renovate the inherited property.
Make Necessary Repairs
Before you attempt to sell an inherited house, you should think about making some important repairs. If the home’s HVAC system is malfunctioning or a portion of the foundation is damaged, you may be unable to sell the property at your preferred price.
Despite the expense, completing necessary repairs should help you garner more interest from potential buyers once the property is listed on the market. It’s highly recommended that you inspect the home to identify its current condition. Look for any:
- Insulation problems
- Water leaks
- Structural issues
- Malfunctioning home systems
Whether you want to move to the property or resell it, these repairs should be made before any additional action is taken.
Run a Title Check
The final step in this process is to run a title check, which will allow you to determine if there are any outstanding debts, liens, or unpaid utility bills tied to the property. If one of these issues is present on the title, you should get in touch with a lawyer to discuss what you and your siblings should do.
Options for Inherited Property With Multiple Owners
There are several options available to you when trying to decide what to do with an inherited house. These options include everything from selling the home and splitting the profits to keeping the home in the family.
Selling and Splitting the Profits
The first and most commonly used option involves selling the home and splitting the profits with your siblings. This option may be ideal because it allows you to avoid the management responsibilities that come with owning a home.
If you decide to sell, it’s essential that you have the home professionally appraised, which will give you a better idea of what the property is worth and what the listing price should be. Your family members could also have right of first refusal on buying the property at market value.
Even if you and your siblings decide to share the home for the meantime, it’s still a good idea to create an agreement about what conditions must be met for the home to be sold at a later date. It’s at this time that you can determine which of your family members have right of first refusal to buy the property outright.
While it’s possible to list your inherited home on the market, this process can take some time since you’ll need to wait for buyers to make an offer and go through a lengthy closing process once an offer has been accepted. Consider selling your home with CC Capital instead. We offer fast, clear cash offers that allow you to sell your home quickly. We can close on your timeline.
Renting and Splitting the Income
Another option that might be of interest to you and your siblings is to rent out the home and split the income. If this property is set to be used as a vacation home in the future, you can rent it out during the months when you’re not staying there. When turning this home into an investment, consider creating an LLC that will hold the property’s title, which means that any rental income will go through the business.
Make sure that you enter into a partnership agreement of some kind. In this scenario, you might want to hire a third-party property manager who has the expertise needed to manage the property, find tenants, and make necessary repairs. This agreement should also detail the type of tenant who will be allowed to rent out the property. You can also determine if you and your siblings prefer short-term renters or long-term renters.
Property managers tend to charge a small fee that equals a percentage of your rental income. In return for this fee, the manager will make decisions on a daily basis and handle any routine maintenance requests that tenants make.
Keeping the House in the Family
Your third option is to keep the house in the family. You and your siblings could choose to have a loved one move in or use the property as a vacation home during the year. If you decide to keep the home as opposed to selling it, every decision you make should be included in writing. Determine who’s name will be attached to the utilities and title.
Make sure that you and your siblings also agree on who will be responsible for maintaining the property and how this maintenance will be paid for. Additional costs like homeowners insurance and property taxes should also be taken into account.
Inherited homes are usually cherished by the beneficiaries who receive it, which may cause some strife among siblings who don’t fully agree on what the next course of action should be. In the event that you’ve inherited a home, review all of your options before coming to an agreement with your siblings.
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