How to Buy Someone Out of an Inherited House Through an Inheritance Buyout Process

Author: Cory Pinter
Date: November 14
Inheritance Advice
Buying someone out of an inherited home

If you want to buy someone out of an inherited house, keep reading to learn all about it.

In the sections that follow, we explore what’s involved in the inheritance buyout process, including the steps, financing, and tips to help everything go smoothly.

Let’s dive in.

Inheritance Buyout Process

An inheritance buyout occurs when one heir compensates all other beneficiaries for their interest in a property and becomes the sole owner.

An instance where it generally happens is when multiple heirs are at odds on whether to keep, rent or sell an inherited house.

For example, in a family scenario, all but one sibling may be adamant about selling a home after the death of the parents.

In this case, the buyout process is a way to civilly resolve that conflict, allowing the heirs not interested in ownership to cash out their share of the property’s value.

What’s typically involved in this process?

  • Determining the Property’s Worth

A professional assessment determining the fair market value can give you an accurate baseline amount for the buyout.

  • Creating an Inheritance Buyout Agreement

The agreement should be a legal document that outlines the terms and timeline. Get verbal agreement and signatures.

  • Accessing Funds

As the heir buying out the siblings’ share of an inherited house, you must pull together the cash to make this happen. Options include a mortgage, personal funds, or a loan.

  • Carrying Out the Buyout

Once everyone agrees and signs the paperwork, the money transfer takes place, followed by the property title transfer.

  • Closing Out the Transaction

After the buyout is completed, the deed needs to be filed at the appropriate county office. That officially documents the transfer of ownership.

Successfully navigating the buyout process requires considering legal factors and financial matters while balancing both with emotional sensitivity.

For example, involve an attorney who handles inheritance issues to help ensure fairness. A lawyer can also be an objective facilitator if you need someone to mediate disputes.

Communicate in a clear and honest manner from the first step. Also, discuss expectations upfront. That can prevent misinterpretations that can lead to additional disagreements.

Ensure you have a clear picture of the property’s condition and estimated repair costs if you’ve inherited a house that needs work.

A condition assessment enables you to negotiate the buyout price better and determine the best financial strategy for the situation.

Be patient and avoid rushing the process. Additionally, remember that this process is more than a financial transaction to some.

If not all beneficiaries agree to sell a property and even if legally, an heir living on the property can be evicted to pursue a sale, acknowledge and respect the feelings of others to minimize potential conflicts.

Inheritance Buyout Loans

What if you inherited a house with several family members and want to buy them out but lack cash?

If you’re wondering how to buy a sibling out of an inherited house in such an instance, a loan may be a viable solution for you.

Specialized financing, in the form of an inheritance buyout loan, is available for this purpose.

Unlike traditional mortgages, these loans typically close quickly, sometimes in a few days, providing immediate access to cash.

Also, inheritance buyout loans usually have shorter terms than conventional financing and allow heirs to access a large portion of the inherited property’s equity.

A 65 to 75 percent loan-to-asset value is not uncommon. Interest rates can notably vary by lender. However, as a general rule, they are higher than standard home loans.

That has to do with the short term of the buyout loan and the increased risk to lenders associated with more lenient credit requirements and a less stringent approval process.

Similar to traditional home financing, you can anticipate paying a fee for application processing, an appraisal, and other closing costs.

What do lenders typically look at when making this type of loan? Here are some common qualifying factors they consider:

  • Property Equity

As collateral, the house needs to have enough equity to secure the loan. Lenders use the appraisal to assess that.

  • Property Condition

Lenders evaluate a house’s condition when approving a loan. So, if you inherited a hoarder house, getting financing or the most favorable terms may be more difficult.

  • Buyout Agreement

The lender wants to ensure that all heirs have agreed to the buyout terms. That means a legal agreement that spells out all the details needs to be in place.

  • Proof of Inheritance

You must present evidence that you have a legal right to the property. That could be a will or probate documents showing you are a legitimate heir.

  • Ability to Repay

While the house backs the loan, a lender may still consider your creditworthiness. That can include your income, existing debt, and credit score.

  • Outstanding Debts

Loans and liens against the property reduce the amount of equity. If there is a substantial amount to be addressed, it may impact your ability to qualify.

The Next Step

Once you’ve bought out your sibling(s), you need to decide what to do next with the house. You can hold onto the property and move in or rent it out. Or, you can sell the house you inherited.

If you are inclined to sell now or later, you’ll also have to make a decision on the approach.

As you think about how to sell an inherited house, keep in mind that engaging a company that buys inherited properties for cash is the easiest solution.

So, what happens when you sell a house you inherited to a cash buyer versus offering it through a traditional home sale? You’ll find that the process is quicker, simpler, and less stressful.

  • The typical closing for these companies is a few days compared to 30 days or more for a conventional sale. So you get cash in hand sooner.
  • You don’t have to deal with showings, negotiate with buyers, or manage complex paperwork, which can be time-consuming and emotionally taxing.
  • Unlike working with an agent where you would pay a commission, selling to one of these companies eliminates that expense.
  • With cash buyers, you don’t have to stress about financing falling through or buyer contingencies.

Keep in mind that such companies may not give you as high of an offer as a buyer brought to you by a real estate agent.

However, this difference is offset by the fact that you don’t pay a realtor’s fee (the highest of the closing costs) and that you don’t have to make repairs.

If you choose to sell your inherited house for cash, you may find that working with a company focused on this type of transaction is a highly effective strategy with appealing benefits.

To get things started, get a cash offer today so that you can promptly move forward with the inheritance buyout.

Cory Pinter

Stay connected

About the Author

Cory Pinter is a seasoned real estate investor with a proven track record of closing hundreds of transactions. Since 2018, he has specialized in inherited properties, providing invaluable guidance and support to individuals managing inherited real estate. Cory's comprehensive knowledge of the real estate market, combined with his empathetic...

You May Also Like
Cory Pinter
February 7

Selling Advice

Cory Pinter
January 31

Inheritance Advice

Cory Pinter
January 28

Inheritance Advice

Cory Pinter
January 14

Selling Advice

Cory Pinter
January 6

Selling Advice

Cory Pinter
December 30

Inheritance Advice

Happy home sellers

Request an Obligation-Free Cash Offer


  • Receive multiple offers in one place and save time
  • Save money on realtor commissions & closing costs
  • Sell your home in any condition fast and for cash