If the estate is still going through the court, start with our guide to selling a house in probate in Virginia. This post picks up once you and your siblings own the house.
Inheriting a house with your brothers and sisters sounds simple until you try to decide what to do with it. One of you wants to sell. One wants to keep it. One lives three states away and just wants it handled. And the house still needs a roof, an insurance policy and a tax payment while you all figure it out.
We are not attorneys, and nothing here is advice for your family’s situation. But we buy inherited houses across Hampton Roads, and these are the questions families ask us at almost every kitchen table.
What Happens When You Inherit a House With Siblings
In most cases you end up owning the house together, each with a share. If three of you inherit it equally, each of you owns one third. That is true no matter who lives closest or who handled the funeral.
Owning it together means one big rule: nobody can sell the whole house alone. Every owner has to sign, or a court has to order the sale. The one common exception is when the will gives the executor a “power of sale.” Then the executor can sell without every heir signing. Our probate guide explains how that works.
Your Three Real Options
- Sell it and split the money. The most common choice, and usually the cleanest. Everyone gets their share and nobody is stuck paying for a house they don’t use.
- One sibling buys out the others. This works well when someone truly wants the house and can afford it.
- Keep it together. Some families rent it out or keep it as a family place. That can work, but only with a written agreement about who pays for what.
Buying Out a Sibling’s Share of an Inherited House
A buyout is simple math once you agree on what the house is worth. Here is how it usually works:
- Get a real value. A licensed appraisal is the fairest way, because nobody can say the number was picked to favor one side. Our guide on finding your home’s fair market value walks through your options.
- Subtract anything owed on the house, like a mortgage or a lien.
- Divide what is left by everyone’s share.
Say three siblings inherit a house worth $300,000 with no mortgage. Each share is worth $100,000. If one sibling keeps the house, they pay the other two $100,000 each, and the other two sign deeds giving up their shares.
The hard part is usually the money, not the math. The sibling keeping the house may need a loan to pay everyone else. Talk to a lender before you agree to anything, and have a real estate attorney or title company handle the deeds so the transfer is done right.
When One Sibling Wants to Sell and the Others Don’t
This is the situation that tears families apart, so it is worth knowing what Virginia law actually says before anyone digs in.
Any co-owner can ask the circuit court to split up the property. This is called a partition case. You can’t cut a house into thirds, so in a partition case the court usually does one of two things:
- Gives the house to one or more of you who are willing to take it and pay the others their shares.
- Orders the house sold and divides the money.
Before deciding, a Virginia court generally orders an appraisal so everyone is working from the same number. If more than one of you wants the house, the judge can weigh things like family ties to the property, sentimental value, how each of you uses it, and who has been paying the taxes, insurance and upkeep.
Here is the honest truth about partition cases: they are slow and they cost money. There are attorney fees, appraisal costs and court time, and the house keeps costing everyone money while you wait. Most families who look hard at that end up agreeing on a sale or a buyout. Sometimes just knowing a partition case is possible is enough to get everyone to the table.
Who Pays the Bills While You Decide
An inherited house does not stop costing money. While you work things out, someone needs to cover:
- The mortgage, if there is one
- Real estate taxes to the city
- Insurance. Call the insurance company early, because many policies limit coverage on a house that sits empty.
- Utilities, lawn care and repairs
Put the plan in writing, even if it is just an email everyone replies to. And keep every receipt. If this ever ends up in front of a judge, Virginia courts look at who paid their share. A co-owner who collects more than their fair share, like keeping all the rent from a tenant, can be made to account for it.
Taxes on an Inherited House in Virginia
Two pieces of good news here.
Virginia has no inheritance tax or estate tax for deaths after July 1, 2007. You do not owe the state anything just for inheriting the house.
Capital gains on inherited property are usually small. When someone dies, the tax value of their house resets to what it was worth on the day they died. The IRS calls this a “stepped-up basis.” So the gain is measured from that new value, not from what your parents paid decades ago.
Say your mother bought the house in 1988 for $80,000, and it was worth $300,000 when she passed. If you and your siblings sell it a year later for $305,000, the taxable gain is about $5,000, split among all of you, not $225,000. The IRS also treats inherited property as held long-term, which usually means a lower tax rate.
The longer you hold the house, the more that can change, especially if one of you moves in or it gets rented out. Run your numbers by a CPA before you sell. Our post on avoiding capital gains tax on a home sale goes deeper.
Selling an Inherited House As-Is
A lot of inherited houses have not been updated in years. There may be an old roof, an aging HVAC system and a lifetime of belongings inside. And with siblings in different places, nobody has free weekends to manage contractors.
You have three real ways to sell:
- Clean it out, fix it up and list it. Usually the most money. Also the most time, money up front, and decisions every one of you has to agree on.
- List it as-is with an agent. Less work, but buyers with loans take money off for anything they have to fix, and some can’t get a loan on a house with major problems.
- Sell it as-is for cash. Less money than a fully fixed-up sale, but no repairs, no cleanout and a closing date that works for everyone.
If the house is in decent shape, an agent will beat our number. We will tell you that on the walkthrough, and we have done it plenty of times.
If it needs real work, here is exactly how we work out an offer, so all of you can run the math together. We figure out what the house will be worth once the work is done. Our offer lands between 70% and 80% of that number, and that range has to cover both what we pay you and what we spend on the renovation.
Say the house would be worth $300,000 fixed up and needs $50,000 of work. 75% of $300,000 is $225,000. Take out the $50,000 of work and the offer is around $175,000, split among the owners.
No repairs, no commissions, and we pay all the closing costs. You can leave behind anything you don’t want. If some of you live out of state, we can use a remote online notary or arrange for each owner to sign where they live.
We buy inherited houses across Hampton Roads: Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Hampton and Newport News.
Common Questions About Selling an Inherited House With Siblings
Can one sibling sell an inherited house without the others?
Not the whole house. Every owner has to sign the deed. The exceptions are an executor with a power of sale in the will, or a court order in a partition case.
Can a sibling living in the house refuse to sell?
They can refuse to sign, but they can’t block a sale forever. Any co-owner can ask the court for a partition, and the court can give the house to whoever pays the others their shares, or order it sold. Talk to an attorney before it gets to that point.
How is the money split when we sell?
By ownership shares, after the mortgage, any liens and selling costs are paid off at closing. If one sibling paid more than their share of the bills, you can agree to pay them back out of the sale before splitting the rest.
Do we have to pay taxes when we sell an inherited house in Virginia?
Virginia has no inheritance tax. You may owe federal capital gains tax, but because of the stepped-up basis it is often small or nothing if you sell fairly soon. A CPA can give you the real number.
How long do we have to sell an inherited house?
There is no deadline to sell once you own it. But the taxes, insurance and upkeep keep coming, and an empty house can get harder to insure and easier to damage. Most families find it is cheaper to decide sooner.
Inherited a House You Need to Sell?
If you and your siblings want a real number to talk about, call us at (757) 337-2236. We will walk the house, give you a number within 24 hours, and tell you straight if listing it would get you more. If the house was held in a trust, see our guide to selling a house in a trust after death.