When one sibling wants to keep the inherited home and buy out the others, estimate what each person's buyout share could be under the assumptions your family chooses.
Use an appraised value or realistic sale estimate. Do not use the county assessed value.
Enter 0 if the property is owned free and clear.
Include any title fees, escrow, needed repairs before or at close. Enter 0 to skip.
Enter each heir's name and their percentage share. Shares must total 100%.
The heir keeping the home. They will pay the others their shares.
A sibling buyout is often the cleanest solution when one heir wants to keep an inherited home and others prefer cash. The math is straightforward, but families frequently miss important details that change the actual amounts owed.
Get the value right. A CMA from an agent is a starting point, but a formal appraisal is often better for buyouts. If siblings disagree on value, they may agree to average two independent appraisals or use a probate referee valuation.
Confirm the mortgage payoff. The current balance shown on the mortgage statement is not the payoff amount. Call the lender and request an official payoff statement, which includes accrued interest and any prepayment fees.
Adjustments the family agrees to include. Depending on the parties' agreement and transaction structure, actual title, escrow, financing, repair, lien, or other transaction expenses may affect the amount available for a buyout. Families should agree in advance which expenses will be included in the calculation.
A qualifying parent-child transfer of a family home may preserve some or all of the parent's taxable value if the statutory eligibility, principal-residence, value, and filing requirements are satisfied. If the property's fair market value exceeds the applicable statutory threshold, part of the transferred value may be reassessed. This can save thousands per year in property tax. Use our Prop 19 Calculator to estimate your specific situation, and file Forms BOE-19-P and BOE-19-B with the county assessor.
If the keeper is not the parent's child, or does not intend to occupy the home, the property will likely be reassessed to current market value.
The keeper typically needs to either refinance the property in their own name (paying off the existing mortgage and cashing out enough to pay the other heirs), or take a probate-specific bridge loan, or negotiate a promissory note with the siblings.
Refinance qualification depends on the keeper's income, credit, and the property's appraised value. Not everyone qualifies for a large enough loan to complete a buyout.
Several factors affect real buyouts that this simple calculator does not include.
Stepped-up cost basis for capital gains. Inherited property generally receives a basis determined under federal inherited-property rules, commonly by reference to fair market value at death. If one heir ultimately keeps the property, that basis can affect the gain or loss recognized on a later sale. The precise basis following an estate or trust distribution and sibling buyout should be confirmed with a tax professional.
Reverse mortgages. If the deceased parent had a reverse mortgage, the payoff can be substantial and complicates the buyout math.
Non-financial contributions. Some families agree to adjustments for care provided to the parent before death, contributions to home maintenance, or forbearance from other estate assets.
Trust or probate constraints. If the property is in a trust or probate estate, the sale or buyout may require trustee approval, court approval, or specific procedures. This calculator assumes the transfer to heirs has already happened and the family is settling among themselves.
Wolf Allies connects families with agents experienced in trust, probate, and inherited property transactions. We can also help you find lenders who specialize in inheritance buyouts.
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