How To Sell a Home With Siblings Involved
How To Sell a Home With Siblings Involved
Are you planning on selling your home with your siblings? Here is everything you need to know about selling a family home with siblings involved.
Inheriting a home as siblings can be an exciting way to keep your childhood home in the family. However, this can quickly become complicated if you want to keep it in the family, but your siblings want to sell it. The most important thing to do first is decide what you will do with the home as a family.
If you and your siblings agree on selling the home, it is vital to understand the process and how you will be dividing the proceeds from the sale. Depending on your relationship with your siblings, the difficulty will vary greatly.
When a will or trust statute states an inherited property will be split between siblings, disagreements are almost inevitable. Whether you are selling a home you bought together as siblings or inherited from your parents, it is essential to have a clear plan on what to do with the property.
Selling a home, in general, can be a difficult process; if siblings are involved, it can become even more overwhelming. However, inheriting a home can be unavoidable. If you find yourself in this position and are wondering what to do next, you have several options to consider.
Keep reading to learn all about how to sell a home with siblings involved.
Chapters
1. Prioritize Communication
Open communication is one of the most important factors in any situation. While selling a family home can be bittersweet, emotions can run high when siblings and differing opinions are involved.
Start an open discussion with your siblings to decide whether or not to sell the home. Ensure the conversation is respectful and fair. Everyone involved needs to feel comfortable expressing their feelings and concerns.
In some cases, legal aspects of ownership may influence the decision to sell the home. In this case, some siblings may feel invalidated in their feelings and/ or rights to the property. Establishing group goals and open communication will help reach a group consensus on what to do with the property.
2. Confirm Ownership and Responsibilities
Before moving and putting the home on the market, you need to determine the legal aspects of ownership. This can involve several factors and research. It is recommended that you consult with a real estate attorney to determine each sibling's stake in the property.
A real estate attorney will conduct a comprehensive title search to determine a property's legal ownership. This is needed during all real estate transactions to transfer the title to the new homeowner. Keep in mind that this process may take up to two weeks and can be done by the attorney or title company.
Keep in mind that open communication should continue throughout this process, as emotions can run high when determining who has legal ownership of the home.
In addition to clarifying legal aspects, assigning responsibilities during the selling process is essential. Selling a home can be a lengthy process with many vital factors.
Consider your sibling's strengths to determine who will do what. For example, if one sibling is the most organized, then assign them the open house; if one is better with money, then they can handle the house budget. However, it is best to talk with a real estate agent during this time because they can handle the bulk of the work throughout the process.
3. Tackle the Valuation
Many family homes that are passed down to siblings have mainly been lived in by the parents. Depending on the situation, you and your siblings may not have lived in the home for many years and are unaware of the exact value.
To set an appropriate price, you should talk with a real estate agent to attain a comprehensive market analysis. This valuation will consider comparable homes in the area, the current market conditions, and other factors to ensure the listing price is appropriate.
To calculate a home's value, you or your real estate agent will use the location, size, and condition of the home, school district, comparable homes, and current market conditions.
Depending on what you want to do with the home, you could discuss improvements that would add value to the home. Any repairs, updates, or renovations can help maximize the home's value. However, you should first determine if the cost of improvements is worth the investment. Again, keep an open and honest line of communication between you and your siblings.
4. Get on The Same Page
Throughout the entire process, ensure you and your siblings stay consistent. When selling a home, consistent messaging is essential to sell the home fast and easily, whether through social media marketing, open houses, or communication with your agent. A unified front will be exceptionally important.
When it comes to home showings, not only will one of you possibly need to be there, but the house needs to be cleaned and staged beforehand. While there are companies who can help with this stage of the process, it is much cheaper to tackle this on your own.
According to the National Association of Realtors, the most common rooms that were staged in open houses include the living room, kitchen, primary bedroom, and dining room. Approximately 82% of buyers' agents say staging makes it easier to visualize the property as a future home.
If you are low on funds or time, consider creating a virtual tour. This can be done on your own or with the help of a professional. It can create better viewings, save you time and money, increase your safety, and create a convenient way for home buyers to view the home.
Approximately 47% of buyers start their search online, and if you want to sell your home fast, then this is one of the best and easiest ways to start.
5. Evaluate Offers
Once offers start rolling in on the house, it can get a bit overwhelming. You have several options when this happens: you can accept the "best" offer, inform potential buyers that other offers are "on the table," and make their "best" offer, counter one offer by putting others to the side, and wait for a decision.
A good offer can mean several different things. As a homebuyer, you can make an all-cash offer to make your offer stand out. A seller will most likely choose the all-cash offer, even if it is at the asking price.
As the seller, keep in mind that the highest offer is not always the best. A buyer would offer you the highest amount, but if they cannot prove that they are financially able to support that number, it is useless.
You and your real estate agent should evaluate the contingencies, timelines, and fees involved in the selling process. This will equip you to make the best decision. Ensure to look at the potential buyer's financial status, including their loan status, down payments, current housing situation, ability to bridge an appraisal gap, and many other factors.
6. Division of Proceeds
Dividing up the proceeds may be the most challenging part of the home-selling process. This should be brought up in the initial conversation; that way, there are no surprises if one sibling gets a larger payout than another.
There are several ways to divide the proceeds. However, it is up to you and how you want to tackle this. Here are a couple of factors to consider during this step:
- Again, review the title and determine each sibling's ownership share of the home. This is a vital step in determining the division of proceeds.
- If your parents left a will or trust, review it with a professional to ensure everything complies with any stipulations regarding property sales.
- Determine the total proceeds by deducting selling costs, agent fees, repairs, and closing costs. This will give you a better idea of how much everyone will be left with at the end.
- Have a mature conversation with your siblings about any contributions made towards the home and how that might impact their share of the proceeds. This includes mortgage payments, maintenance, and more.
- Consider the tax implications of the sale. In this case, you should consult a tax professional for advice and guidance.
7. Consult a Trusted Real Estate Agent
Real estate agents are licensed professionals who represent buyers and sellers in different types of real estate transactions. While you can sell a home without a realtor, otherwise known as for sale by the owner (FSBO), many decide against the latter.
As an FSBO seller, you would take on all the responsibilities that a realtor would, which entails a good amount of knowledge and patience. Meanwhile, a realtor is more likely to sell your home faster and for more money than you can. According to the 2021 report for the National Association of Realtors, the typical FSBO home sold for about $260,000 compared to $318,000 for an agent-assisted home sale.
Whether or not you want to sell fast, working with an agent will take a massive load of stress off you and your siblings. Giving you more time to focus on what is important.
Methodology
We used information and data from several different sources, as well as our own data, to determine everything you need to know about selling a home with siblings involved. Most of the data was sourced from the following sources:
FAQ: Selling a Home With Siblings Involved
Here are some commonly asked questions about selling a home with siblings involved.
How do I sell inherited property with siblings?
As a beneficiary, you can sell your share of the inherited property or allow one of your siblings to buy out your position. Real estate cannot be divided; if one party wants out, they can do so for the sale of the property in order to receive their share of the profits.
What happens when siblings inherit a house with a mortgage?
If you inherit a home with a mortgage with your siblings, most likely, you'll need to sit down together and discuss everyone's plans for the house. If one sibling wants the house and another doesn't, they must buy the remaining siblings out of the house.
How does inheriting a house with siblings affect taxes?
If you inherit property, typically, you don't owe taxes until you sell those assets. Capital gains taxes are calculated after the sale using what's known as a stepped-up cost basis. Essentially, you pay taxes only on an appreciation that occurs after you inherit the property.
How do you avoid paying capital gains tax on inherited property?
To avoid paying capital gains tax on inherited property, you can sell the inherited property quickly, make the property your primary residence, rent the inherited property, or disclaim the inherited property.
Does inheriting a house count as income?
Inheritances are not considered income for federal tax purposes. However, subsequent earnings on the inherited assets are taxable.
Sell a Home With Siblings Involved - The Bottom Line
While it can be, selling a home with siblings doesn't always have to be stressful. If you foster open communication, patience, trust, and collaboration, you can easily navigate any challenges that may surface.
High emotions and differing perspectives may be inevitable; they don't have to stand in the way of you and your sibling selling your family home. Embrace the chance to work with your family, and remember that this isn't just about selling your home. This is also about honoring the family legacy and creating lasting memories.
As you start selling a home with siblings, we recommend meetings with a trusted real estate specialist. If you are considering moving to a new city, you should check out the Raleigh area in North Carolina. Feel free to contact one of our helpful real estate specialists, as they are eager to help you find the perfect home. We know that buying a home can be overwhelming, but a real estate agent can walk you through the entire process.
Ryan Fitzgerald
Hi there! Nice to 'meet' you and thanks for visiting our Raleigh Real Estate Blog! My name is Ryan Fitzgerald, and I'm a REALTOR® in Raleigh-Durham, NC, the owner of Raleigh Realty. I work alongside some of the best Realtors in Raleigh. You can find more of my real estate content on Forbes, Wall Street Journal, U.S. News and more. Realtor Magazine named me a top 30 under 30 Realtor in the country (it was a long time ago haha). Any way, that's enough about me. I'd love to learn more about you if you'd like to connect with me on Facebook and Instagram or connect with our team at Raleigh Realty. Looking forward to connecting!
Related Blogs
