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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask you to explain how buying out a sibling works for an inherited house?

70 replies

GertrudesGreens · 21/04/2023 14:30

I'm so confused!

Sibling and I have inherited a property 50/50. We have a good idea of what it's worth (had 3 valuations) and agreed for sibling to "buy me out" at the average market value.

There's no mortgage on the property but sibling will need to raise a mortgage to fund the buying out. I've been reading online and i'm more confused than ever!

Do we need 2 separate lawyers to act for us?
The property won't go on the open market so don't need an estate agent. And do we need to decalre that no stamp duty is due (house is worth less than 100k).

Or can we have 1 lawyer just sorting the legal paperwork for both of us?
Or just an online conveyancer? (1 or 2?)

We are keen to do this all above board, properly, but i'm not sure what professional to approach to kick the process off,or how many need to be involved.

(We have grant of probate/all the paperwork and valuations to proceed with sale, jsut not sure what firms to line up to make it happen. Sibling is hoping her appointment with a mortgage advisor will make next steps clear but my attempt to google aroundit beforehand today has failed!)

OP posts:
moonspiral · 21/04/2023 21:29

WestOfWestminster · 21/04/2023 21:29

.... and this is why everyone should get their own solicitor 😂

Show quote history

Yes OP, hope this has helped. Both get your own solicitor and then shit like this won't happen

House23 · 21/04/2023 21:40

33goingon64 · 21/04/2023 20:25

We're not swindling her, we have a solicitor acting for all of us.

Which is against the rules really. Your poor sister. Your share of the house should be 1/3. Not 1/2.

RuddyLaura · 21/04/2023 21:56

33goingon64 · 21/04/2023 21:11

I mean she isn't buying the house. Hence no money changing hands for that part. She is then giving us cash worth half the value of the house each. I didn't say it was exactly the same situation as the OP.

Show quote history

@33goingon64 your sister giving you and your brother cash for half the house each is her paying the full value of the house! That IS the money changing hands. She's paying out of her pocket the market value of the house in full. If she sells it for the same amount of money, she walks away with nothing, while you and your brother sit pretty with half the money each. You're robbing her blind and the solicitor handling this needs sacking!

RuddyLaura · 21/04/2023 22:01

For your sake as well as hers get this sorted out. You will lose her for life when she works this out for herself. Unless you hate her for some reason!

DrManhattan · 21/04/2023 22:23
  1. Backtracking
  2. Low key trolling
  3. Piss poor maths

I can't make my mind up

Talkingtomyhouseplants · 21/04/2023 22:27

My fiancé and I bought his brother and mum out of an inherited house in 2021. It was really very simple.

  • agree a price
  • person buying out applies for a mortgage. The easiest way to do this is to go through a broker to get you a “concessionary mortgage” that means you are buying the house for less than its value (which you will be because you already are entitled to 50%)
  • you get a solicitor each and they sort out the stamp duty situation.
alcquestion · 21/04/2023 22:33

GuinnessBird · 21/04/2023 20:01

This thread demonstrates why Sunak wants more maths education.

Grin
TiaraBoo · 21/04/2023 23:02

When DH bought me out of our house? We both had to have a different solicitor to protect our interests.

Whatthediddlyfeck · 22/04/2023 06:14

33goingon64 · 21/04/2023 20:25

We're not swindling her, we have a solicitor acting for all of us.

She needs her own solicitor because this one is clearly as rubbish at maths as you are!

EliflurtleTripanInfinite · 22/04/2023 06:29

33goingon64 · 21/04/2023 21:11

I mean she isn't buying the house. Hence no money changing hands for that part. She is then giving us cash worth half the value of the house each. I didn't say it was exactly the same situation as the OP.

Show quote history

You're making no sense. You and your brother are either stealing your sibling's inheritance or a big chunk of what is happening is missing from your explanation. Unless there's more money involved or shares or something you and your brother each getting 50% of the value of the house is the two of you stealing your sisters inheritance.

CheshireDing · 22/04/2023 06:42

GertrudesGreens as seen on this thread some people are not always clear as to the process ! I have messaged you

EliflurtleTripanInfinite · 22/04/2023 06:47

The change of title and dispersement of funds has to happen in the one meeting if there's a new mortgage involved. The bank should meet with both of you or your solicitor/s for settlement, it all happens quickly. Theoretically it has to be title changes hands first as bank will need a charge on the property before drawing down the mortgage, they'll have a cheque written to you ready to go and any money that needs to go to anyone else too if that applies, usually including things like land transfer fee. It happens fairly simultaneously, the mortgage provider should be very familiar with the situation. A conveyancing solicitor might be a good idea and shouldn't cost a lot. It's fairly straightforward if you've agreed on value so I wouldn't feel I needed 2 solicitors.

TerfIngOnTheBeach · 22/04/2023 06:51

Sorry the OPs thread got derailed, but I can’t believe @33goingon64can be that thick!

Annfr · 22/04/2023 06:54

Me and my mum both had shares in my Grandads house (although mine was only small). I was happy for my mum to have my share and it was sorted out with the probate solicitor.

SMabbutt · 22/04/2023 07:14

S0upertrooper · 21/04/2023 20:35

@33goingon64 so if you and your brother are getting half the value of the house each but no money is changing hands, where are you getting 'half the value' from?

In simple terms this us why it isn't fair.
You each inherit an equal share in the house which is valued at £600,000. If this was a cash inheritance instead of property you would each get £200,000. You and your dB do bot want to keep your share of the house so your dsis is going to buy you out. T do this she needs to give you a cash equivalent of your share ie the £200,000 less any costs. The costs also need to be split 3 ways.

The way you are doing it she ends up paying for the house as if she hasn't inherited any share in it.

Imagine you each inherited the cash equivalent and used that to buy the house with your ds and dB. You now have the same situation as inheriting the house direct. You each own 1/3 of the property with no mortgage and have no cash in the bank.

Now let's put you in the position of your dsis. They then changed their minds and you buy them out by taking a loan and giving them £300,000 each, as you suggest your dsis does to buy you out.

They paid £200,000 then sold to you and received £300k as cash in the bank.

You now own the asset. You also decide to sell and receive £600k. BUT you need to pay back the £600,000 you borrowed to buy out your siblings so you end up with nothing on the bank. You effectively gave the value of your share to your siblings who now have £300,000 while you have nothing.

You don't own her share of the property. You only own 1/3 valued at £200,000. You can't sell her what you don't own.

33goingon64 · 22/04/2023 09:03

It seems I am wrong - checked with siblings and in fact were not doing it the way I thought we were. We'll be doing the thirds thing. We haven't started the process yet, it's early stages as we're still sorting the probate and haven't had chance to discuss it yet. So I'd done some poor maths, as many of you pointed out. Once again, apologies for distracting attention from the OP. I'm not a troll!

alqpabnm · 22/04/2023 09:10

33goingon64 · 22/04/2023 09:03

It seems I am wrong - checked with siblings and in fact were not doing it the way I thought we were. We'll be doing the thirds thing. We haven't started the process yet, it's early stages as we're still sorting the probate and haven't had chance to discuss it yet. So I'd done some poor maths, as many of you pointed out. Once again, apologies for distracting attention from the OP. I'm not a troll!

🤦‍♀️

PicaK · 22/04/2023 09:35

Back to OP. You have inherited you now own 50% of a house.
Is this your second home? There might be all kinds of tax implications and higher rate stamp duty etc to factoir in. You really need a solicitor.
My ex and I did a simple signing over thing - but it was part of the divorce process and under different legal rules.
Please get it checked with a solicitor

Northernlurker · 22/04/2023 15:20

Well this thread is a thriller!

Op it's as well for you both to have a solicitor because that safeguards you and your relationship. As the farrago on this thread shows it's easy for people to misunderstand and a lot can be at stake.

Winter2020 · 06/05/2023 21:14

@33goingon64
I see you have reconsidered.

Here is an analogy.

Give your sister a pizza. Ask her to cut half for you and half for your brother. How much pizza does she have left for her own dinner?

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