Although no one likes to think of their parents passing away, this could happen, and if it does, you could be faced with having to sell your parents home. If you have siblings, hopefully, they will be of some help. However, you also could find yourself in the middle of a family feud, with the sale becoming a major headache and unresolved issues from childhood even resurfacing and threatening to tear apart your family. Here, Realtor.com offers tips on navigating the home selling process with your siblings without drama.
First things first: Should you sell it or keep it?
When it comes to an estate, the most common problem is that there’s usually one sibling who doesn’t want to sell, preferring instead to have the property remain in the family or rent out the home. If siblings agree to keep the house, the workload usually winds up being uneven—maybe one sibling lives in a different state than the home, for example—and soon, brothers and sisters find themselves battling over money or time spent looking after the house. In the end, it’s typically best to sell the property and use the funds to buy individual investments or to just keep the profits.
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. The property usually will be sold at a sheriff’s sale, which is a court-ordered sale most frequently used in foreclosure auctions. The minimum winning bid must usually equal at least two-thirds of a home’s value. For example, a property worth $200,000 can sell for $133,333. However, a partition by sale is hardly ideal, since you could have sold the house at market rate and made a lot more. This is why siblings should do their best to cooperate to avoid a courtroom drama.
Determine if you want to sell the house as is or for top dollar
Siblings should have a discussion to decide whether to sell the house as is or renovated. Selling a property as is means foregoing any 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 before the sale. Another consideration is how outdated the home is. If a top-to-bottom renovation is needed, then as is would be the better option. Major renovations take time, money and patience, which some or all of the siblings may not have. If the renovations are easy and could garner a higher asking price, do them. If only a small number of repairs is needed—such as painting or swapping appliances—it makes sense to make them. 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? Hire an appraiser to ascertain the home’s value. 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. An objective appraiser 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
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.