Detailed answer — how heirs can keep a house instead of selling it

When a decedent’s real property passes to more than one person, the heirs commonly hold the property as co-owners (often as tenants in common). Each co-owner holds an undivided share. That shared ownership creates the possibility that one or more co-owners can force a court-ordered sale through a partition action, but there are several alternatives that let the family keep the home.

1) Confirm how title is held and whether probate applies

Start by checking the deed and the probate status. If title was in joint tenancy with right of survivorship, the property may have passed automatically to the surviving joint tenant(s) and not to heirs. If the property is distributed by probate or intestate succession, heirs usually take as tenants in common. You can check probate basics at the California Courts self-help pages: California Courts — Probate Self-Help.

2) Buyout (one or more heirs buy the others)

A common way to keep the home is for one or more heirs to buy out the others’ shares. Steps typically include:

• Order a professional appraisal to determine fair market value.
• Calculate each heir’s share based on ownership percentages or the probate distribution.
• Arrange financing (mortgage refinance, new loan, personal funds) to pay sellers their share.
• Execute a written buyout agreement and record a new deed clearing the selling heirs’ interests.

3) Enter a family settlement or co-ownership agreement

Heirs can sign a written family settlement agreement that sets rules for use, contributions to taxes and maintenance, rent if one heir lives in the home, and conditions for future sale or buyout. Such agreements can reduce conflict and reduce the chance of a partition lawsuit. Keep the agreement in writing and record any changes to title when appropriate.

4) Refinance or take out a loan secured by the property

If the goal is to buy out co-owners, the heir who wants to keep the house may refinance the mortgage in their own name and use the proceeds to pay the other heirs. A lender will generally require clear title to the borrower’s share and proof the borrower can repay the loan.

5) Rent the property and share income

If heirs agree, they can rent the house and split net income. Create a written operating agreement that assigns responsibilities for repairs, taxes, insurance, and the distribution of rental income and expenses.

6) Convert ownership structure (trust or LLC)

Heirs may agree to transfer the property into a family trust or an LLC and take proportional interests in that entity. This can clarify management, create buy-sell rules, and simplify future transfers. Consult an attorney and tax advisor before changing title because of tax, creditor, and probate consequences.

7) Mediation or settlement to avoid litigation

If heirs disagree, mediation can produce a voluntary resolution that avoids a partition lawsuit. A mediated agreement can cover buyouts, timing of sale, shared occupancy rules, and payments for upkeep.

8) What happens if heirs cannot agree — partition actions

If negotiations fail, any co-owner may file a partition action in civil court. Under California’s partition laws, the court can order:

• Partition in kind — the court divides the property into physically distinct parts if division is practicable and fair.
• Partition by sale — if physical division is impractical or inequitable, the court orders sale and divides the proceeds among owners according to their interests.

California’s partition statutes are in the Code of Civil Procedure. See the Partition chapter here: Cal. Code Civ. Proc., Partition (Ch. 3). A partition lawsuit can be expensive and result in a sale even when some owners want to keep the home.

9) Practical issues to expect

Whether you try to buy out co-owners or hold the property jointly, prepare for these realities:

• Appraisal and title search costs.
• Mortgage payoff or refinance requirements.
• Property tax and insurance responsibilities.
• Poor liquidity — owners who keep the house may face difficulty paying others without borrowing.
• Court costs and attorney fees if disagreements lead to litigation.

Example hypothetical

Three siblings inherit a house as tenants in common after probate. One sibling wants to keep the home. They get an appraisal showing a $600,000 value. Each sibling’s 1/3 share equals $200,000. The staying sibling refinances and borrows $210,000 (to cover closing costs) to buy the other two heirs’ shares. They record a deed showing sole title and assume the mortgage. The other siblings receive cash and release their ownership interests. This avoids a partition sale and keeps the house in the family.

When to consult an attorney

Talk to a California probate or real estate attorney if:

• You cannot confirm how title passed.
• Heirs disagree about selling or keeping the house.
• You need help drafting a buyout, settlement, or co-ownership agreement.
• You face a partition lawsuit or anticipate one.

Helpful hints — quick checklist and tips

• Check title and probate status immediately. A deed search will show whether the property was joint tenancy, community property with right of survivorship, or otherwise.
• Order a professional appraisal — use it as the baseline for any buyout offer.
• Get a title report to confirm liens, mortgages, and other encumbrances.
• Ask for written offers and record all agreements in writing.
• Consider mediation early — it is cheaper and faster than court.
• If you plan to keep the house, prepare a written co-ownership or family agreement that covers expenses, occupancy, maintenance, and exit rules.
• Talk to a tax advisor about stepped-up basis, capital gains, and gift tax issues before finalizing a buyout or transfer.
• Keep a clear paper trail: appraisals, receipts for improvements, property tax payments, and communications about agreements.
• If facing a partition lawsuit, know that the court may order sale if the property cannot be fairly divided. See California’s partition statutes for more: Cal. Code Civ. Proc., Partition (Ch. 3).