how do you sell a house with multiple owners?

Posted on January 31, 2020February 10, 2020 4-5 min read. For example, the court might divide a three-acre farm between three co-owners by giving 1.25 acres to two of the co-owners, while the third receives the half-acre that includes the farmhouse and other structures. For those hoping to maximize profits on a home sale, posting a "for sale by owner" sign in the yard is an appealing option. If your children feel one of their siblings is getting a free ride or cheating, the property situation could get ugly. Whether you have a tenants in common or joint tenancy agreement in place among multiple owners, it’s typically expected that each owner pays their fair share of the continuing housing expenses (mortgage payment, utilities, etc.) Joint tenancy includes the right of survivorship, which TIC does not. © HomeLight, Inc. 100 1st Street, Suite 2600, San Francisco, CA 94105. If you own a house with other people and decide to put that house on the market (rather than orchestrate a buyout) you’ll need a great real estate agent to represent you in the sale to make sure you maximize the home’s value and ensure a successful sale. “It could be as long as a couple of years to get through the court systems, and you’ll need to cover all housing expenses like the property taxes and heating bills for the duration.”. It's vital to lay this out before even purchasing the home but if you haven't, proceeds will be divided evenly. “Some owners may be doing better economically than others on the title, so they may not have the same urgency to liquidate and get money out of the home sale.”. Writing for the Chicago Tribune, practicing attorney Benny Kass writes: “In my opinion, if two or more people buy real estate, they should enter into a written partnership agreement — before taking title — that attempts to anticipate future problems. READ: Cutting down capital gains tax on real estate sales Finally, when it comes to the fair division of funds once the property is sold the law is pretty clear. Clever Partner Agents around the country have plenty of experience selling jointly owned properties. Assuming you both own the house equally, you bought half a house for 150k and sold it for 250k. If need be, they can point joint owners in the direction of trustworthy attorneys, financial advisors, accounts, and more. Maybe you and your siblings inherited your parents' old home but no one wants to spend the time or money on upkeep. Some will want to sell, and some might want to hold on to the house. Is Probate Necessary For All Estates or Can You Avoid It? This varies from owning a house as community property, an arrangement in which a spouse can will their share of the house to someone else. Perhaps one family maintained the property and believes they are entitled to a larger share. To make it easy, HomeLight will connect you with three top-performing agents in your area with relevant experience for your neighborhood and property type, and from there you can select someone who all owners believe to be a good match. When one party of a multi-owner house wants to sell, but the other owners don’t, the simplest solution is for the person who wants out to sell their share — if legally allowed. Your friend did the same. Amen. That way, there is a base-level price you'll accept and a closing date that works for everyone involved. If you need legal help selling a house with multiple owners, please consult a skilled attorney. 6 Considerations When Selling a Property with Multiple Owners Determine How the Home Was Purchased. When a partition action is initiated on a property that can’t be physically divided, the court will force the sale and the proceeds from the purchase price will then be divided amongst the co-owners. Proceeds are only paid out after all closing costs, taxes, fees, and commissions are paid. If you own 50%, and your two co-owners each own 25%, then you’ll need to cover half of all housing expenses while your co-owners split the remainder. Disclaimer: Information in this blog post is meant to be used as a helpful guide, not legal advice. Determining how the home purchase was set up can help dictate how the sale needs to proceed. “I’m working with a client with three sisters on a property that’s been in the family for 40 years — with that many beneficiaries, things can get complicated,” says Ristau. Perhaps the home is especially old and rundown or needs a huge overhaul to make it stand out in a hot market. Under joint tenancy, however, an owner can still sell their interest in a property to someone else before they die. Can I Be Forced Into Selling a Joint-Owned House?. Setting up an LLC in this case has several advantages, according to a report from U.S. News and World report: 1) An LLC protects you in the event that someone gets hurt on the property (though state laws on the level of liability protection vary) and 2) You can have an unlimited number of owners and outline how the sale of shares in the LLC are to be handled in the planning documents. You may choose in this case to own the house as tenants in common. “Multiple-owner home sales are fraught with problems because you can’t necessarily always keep all individuals on the same page,” says top-selling Chicago-area agent George Ristau. With everyone physically out of the house, the legal process to split up property among multiple owners is called a partition action. Here’s How Much Money You Need to Build Your Dream Home. This legal action divides the property in question equally between all owners, giving each party title ownership of a portion that they can sell independently. However, if multiple owners want to sell, but one or more doesn’t and you can’t come to some kind of buyout agreement, then you may have no choice but to take legal action. Hire an agent who’s a neutral party. Pro tip: If you’re the one who sells your share of a multi-owner property, you’ll need to take steps to remove your legal obligation to the property. In special cases, joint owners should have stipulated who will receive what percentage at the time of a sale. As long as you can find someone willing to purchase your share, you can execute the transfer and be done with it. Owning a home as tenants in common (TIC) means you each own an undivided share of the entire property. Launching her writing career in 2007, Christine has crafted interior design content for companies including USA Today and Houzz. A Clever Partner Agent will walk everyone through the whole process. Two or more people have three ways to take title to and then own property together. What Upgrades Increase Home Value? However, when many separate groups of people buy a house together, they often don't think about the potential resale process down the line. Contact Clever today for a no-obligation on your joint-property home sale. It’s set up so that the one sibling is the successor trustee of the property for the parents. It rings true in real estate as well. In most cases, shares of the home are split evenly amongst all owners. Tom would then collectively owe $333,333 before he owns the house outright. When multiple owners go to purchase a home, they usually conduct the transaction under a joint tenancy or a tenancy in common agreement. Agree as a group to proceed with certain repairs or appoint one owner to hire contractors, correspond with the realtor, be present for showings, etc. This requires 1) that Tom is financially able to do so and 2) that the three owners can agree on how much the house is worth.