When your parents pass away, you might find yourself tasked with selling their house—and if you have siblings, hopefully they will offer help on this front. Problem is, in the same way you all squabbled over who had the better bedroom or more toys growing up, you may find yourself embroiled in a whole new kind of family feud as you attempt to unload this baggage-laden piece of real estate.
At best, the sale could turn into a major headache. And at worst, unresolved issues from childhood might resurface and tear your family apart.
Here's how to navigate selling a house with your siblings without drama—or wrestling each other to the floor like you did when you were kids.
First things first: Should you sell it or keep it?
Michael Mazek, an attorney in Chicago, says the most common problem when it comes to an estate is that there's usually one sibling who doesn't want to sell. This sibling may prefer to have the property remain in the family or rented out.
"The challenge is that essentially puts all the siblings into a business partnership," says Mazek. And things can quickly go south.
If siblings agree to keep the home, what usually happens is that the workload isn't even—maybe one sibling lives in a different state than the home—and soon brothers and sisters find themselves battling over money or time spent looking after the house.
"That's why it's usually best to sell the property and use those funds to purchase individual investments or simply keep the profits," says Mazek.
What to do if one sibling refuses to sell
If one sibling wants to keep the home, he or she can buy the others out for their share of the home's fair market value. However, if a buyout isn't an option, even just one sibling generally has the right to force a sale even if the majority are against it.
The process is called "partition by sale," and the net proceeds are divided among the owners.
"Generally the property will be sold at a sheriff’s sale, which is a court-ordered sale most frequently used in foreclosure auctions," says attorney Richard Winblad of WinbladLaw.com, in Edmond, OK. The minimum winning bid must usually equal at least two-thirds of a home's value. For instance, a property worth $200,000 can sell for $133,333.
Still, a partition by sale is hardly ideal, since you could have sold the house at market rate and made a whole lot more! This is why siblings should do their best to cooperate in order to avoid a courtroom drama.
Determine if you want to sell the house as is or for top dollar
Real estate agent and attorney Bruce Ailion with Re/Max Town and Country in Atlanta advises siblings to have a discussion to decide what condition to sell the house in—as is or renovated.
Selling a property as is means skipping upgrades and settling for a lower asking price. It can make sense to sell the home as is if the siblings live far away and can't oversee home improvements prior to the sale.
Another consideration is how much of an outdated wreck the home is.
"When only a top-to-bottom renovation makes sense, as is is the better option," says Ailion. Major renovations take time, money, and patience, for which some or all of the siblings may have limited capacity.
If the renovations are easy and can nab a higher asking price, do them. If only a small number of repairs is needed—e.g., painting or swapping out appliances—it makes sense to make them, says Ailion. Whoever pays for the upgrades should get a refund at closing.
Can't agree on a price? Get an appraisal
The sentiment surrounding a family home may cloud any given sibling's idea of how much the home is actually worth. The solution? Have the home's value appraised to avoid a family "debacle," says Paige Arnof-Fenn, founder and CEO of marketing consulting firm Mavens & Moguls.
Appraisers typically work for lenders in the home-buying process to decide if a property is worth backing with a mortgage. But they can work for home sellers, too, coming up with a fair price for the home.
Granted, the real estate agent you're working with can also suggest a number based on comparables. But an objective appraiser, who works for neither buyers nor sellers, will come up with the actual value of the home in a bank's eyes, all for around $300 to $400. It could be worth the expense.
If you decide to sell, pick a point person
We all know the saying about too many cooks in the kitchen. So siblings should decide on a point person who will communicate with both the family and the real estate agent, and generally manage the transaction from the selling side. If multiple siblings give instructions, your agent and potential buyers may get conflicting information that could derail the transaction.
"When my mom died, she left me and my two siblings a condo in Florida that no one wanted," says Arnof-Fenn, who, as the eldest, became the point person. She advises overly communicating with the family to avoid conflict or misunderstandings.
Source: https://www.realtor.com/advice/sell/how-to-sell-parents-home-with-your-siblings/?iid=rdc_news_hp_carousel_theLatest