Detailed answer: How the buyout process usually works under California law

When a parent dies and a house becomes part of the estate (or otherwise becomes owned by multiple heirs), heirs often end up as tenants in common—each owning an undivided percentage of the property. If one heir wants to keep the house, that person can often buy the other heirs’ shares rather than sell the property. The core steps are:

1. Confirm how title passes and whether probate is required.

   First, determine how the property is titled. If the parent owned the home jointly with right of survivorship, or used a living trust or a transfer-on-death deed, the property may pass outside probate. If the parent owned the property in their sole name and no transfer instrument applies, the home will usually pass through probate or a small estate procedure. For basic information about estate administration and probate in California, see the California Probate Code: California Probate Code (leginfo.ca.gov).

2. Obtain a clear market valuation (appraisal).

   Get a licensed real estate appraiser or a broker price opinion so all heirs agree on fair market value. A neutral appraisal reduces disputes and supports any eventual court filings or bank financing.

3. Calculate the net equity and each heir’s share.

   Net equity = market value − mortgage balance − other valid liens − reasonable estate costs that must be paid before distribution. Each heir’s share equals that net equity multiplied by their ownership percentage (often equal shares unless the will or intestate law says otherwise).

4. Make a written buyout offer and negotiation.

   Present a written offer to buy each sibling’s interest for their share of the net equity. You can offer cash, a promissory note, or some combination. Put the terms in writing: price, payment schedule, interest (if any), and what happens on default. Consider using escrow to handle funds and recordation.

5. Title work and payoff of liens.

   Before closing, order a title search and obtain a preliminary title report. Pay off or otherwise resolve mortgages and liens consistent with the agreement. The buyer should make sure the seller will provide a deed (usually a grant deed) transferring their undivided interest and a recorded release of any lien rights.

6. Close the purchase through escrow or a lawyer.

   Use an escrow company or attorney to handle the funds, record the deed, and provide a final title policy showing the buyer owns the property free of the sold fractional interest. If the property is still in probate, the personal representative may need to approve or obtain court approval for the transfer; that depends on the stage of the probate and the estate’s inventory.

7. Alternative if siblings refuse: partition action.

   If heirs cannot agree, any co-owner can file a partition action in California Superior Court under the partition statutes. A court can order a physical division (rare for residential lots) or a sale with proceeds distributed among owners. See California’s partition statutes: Code of Civil Procedure — Partition (leginfo.ca.gov). A voluntary buyout is usually faster and less expensive than a contested partition sale.

Special considerations when probate is open

If the house is part of a pending probate case, the personal representative (executor) must follow probate rules for selling or transferring estate property. Some transfers may require court approval, depending on whether the transfer is an ordinary administration act or a sale of estate property. Check the Probate Code and consider asking the personal representative to transfer an undivided interest to heirs so they can privately arrange a buyout. Relevant California code resources: California Probate Code.

Financing a buyout

Common ways to fund a buyout:

• Cash from the buying heir.
• Refinance the mortgage in the buying heir’s name (cash-out refinance) to pay siblings.
• Promissory note from the buyer to siblings, secured by the seller’s interest until paid.
• Seller financing where siblings accept payments over time with a deed of trust or reconveyance on full payment.

Tax and basis issues

When a parent dies, heirs often get a stepped-up basis in the property to the date-of-death value (this affects later capital gains calculation). A buyout can affect basis and capital gains for both buyer and seller. Consult a tax advisor about capital gains, gift tax, and income tax consequences of the buyout terms.

When to involve the court or a lawyer

If siblings dispute valuation, refuse reasonable offers, or there are unresolved liens or creditor claims against the estate, get legal advice. A lawyer can help structure the buyout, prepare deeds, use escrow, obtain court approval when probate is involved, or file a partition if necessary.

Helpful Hints

• Start by getting clear title information and knowing whether the property is in probate or passes outside probate, such as by trust or joint ownership.
• Use a neutral, licensed appraiser for the market value so the buyout price is defensible.
• Put all terms in writing (price, payment schedule, interest, security, default remedies, costs allocation).
• Use escrow or a title company to handle funds and record the deed transfer to avoid future disputes.
• Consider refinancing the property in your name to pay siblings off in one transaction rather than carrying multiple promissory notes.
• If you expect resistance, understand that a partition action can force a sale; the threat of partition often motivates a negotiated buyout.
• Talk to a probate or real estate attorney for complex estates, contested inheritances, or when court approval may be required.
• Consult a tax advisor about stepped-up basis, capital gains, and any tax consequences for buyer or seller.