Short answer: You generally must (1) confirm ownership shares, (2) get a current market valuation, (3) negotiate a buyout price or refinance to remove your siblings, (4) document the transaction with a deed and closing paperwork, and (5) record the deed. If you cannot reach agreement, a co-owner can force a partition (court-ordered sale or division). This article explains practical steps under Indiana law, common pitfalls, and resources to help you keep the home.
Disclaimer
This is general information only and is not legal advice. I am not a lawyer. For advice specific to your situation, consult a licensed Indiana real estate attorney and a title company or lender.
Detailed Answer — Step-by-step guide under Indiana law
1) Confirm how title is held and each person’s legal interest
Start by ordering a copy of the deed from the county recorder where the property is located or review your closing paperwork. In Indiana, most co-owners hold property as tenants in common unless the deed says otherwise. Tenancy in common means each owner holds a separate, divisible share that can be sold, transferred, or inherited.
2) Get a professional market valuation
Hire a licensed appraiser for a current market value. A professional appraisal gives an objective number to use in negotiations and in lender underwriting if you refinance. You can also get a broker price opinion, but lenders generally prefer an appraisal.
3) Figure out each owner’s monetary interest
Work from the appraised fair market value and subtract outstanding liens and mortgage balances to calculate equity. Multiply the equity by each owner’s share (e.g., 1/3, 1/2). That result is a starting point for a buyout offer.
4) Choose how to finance the buyout
Common options:
- Refinance the mortgage in your name alone and use new loan proceeds to pay siblings their share. This also removes your siblings’ liability from the mortgage. Lenders will evaluate your credit, income, and the home’s value.
- Obtain a purchase-money mortgage or personal loan and execute a promissory note to your siblings (seller-financed buyout).
- Pay cash if you have sufficient funds.
Important: if you simply have siblings sign a deed transferring their interest to you but don’t refinance, the mortgage likely remains in their name(s) and yours (if they were on it). The lender is not bound by your private agreement and could still hold prior borrowers responsible.
5) Negotiate and put terms in writing
Even among family, always use a written agreement. A buyout agreement should state the buyout amount, closing date, method of payment, who pays closing costs and taxes, and what type of deed will be used. Consider including representations about liens, repairs, and prorations for taxes and utilities.
6) Choose the deed and close the transaction
Common deeds used in intra-family transfers:
- Quitclaim deed: Transfers whatever interest the grantor has with minimal warranties. It’s commonly used between family members and co-owners to simplify transfer of title shares.
- Warranty deed: Offers stronger protections to the grantee about title defects. Co-owners sometimes use a warranty deed if they are comfortable making those warranties.
Have a title company or real estate attorney prepare closing documents. At closing you’ll exchange payment for the executed deed. After closing, record the deed with the county recorder to update the public record.
7) Address the existing mortgage and title insurance
If the mortgage stays in place with multiple borrowers, you likely have joint liability. To remove your siblings from liability, refinance in your name or get the lender’s formal release (rare without a refinance). Also obtain or update title insurance to protect against past defects.
8) If siblings won’t agree: partition actions
If negotiations fail, Indiana law allows a co-owner to file a partition action to force a physical division of the property or a sale with proceeds distributed among owners. Partition can be a costly, adversarial, and time-consuming remedy. Courts prefer sale when physical division is impractical. See Indiana property statutes for partition and remedies in the Indiana Code (Title 32 — Property) and related civil procedure provisions on partition actions. For statutory detail, review Indiana Code, Title 32 (Property) at https://iga.in.gov/legislative/laws/2024/ic/titles/032.
9) Consider tax and family implications
- Federal income tax: When you buy out siblings, the seller’s gain (if any) may be taxable. Sellers should consult a tax professional. Your basis in the home after buying a share will reflect your purchase price for that share.
- Gift and estate tax: If you pay substantially less than fair market value, a transaction could be treated as a gift for federal tax purposes. Large below-market transfers may require reporting.
- Medicaid, divorce, or creditor issues: Transfers among family can affect eligibility or expose the property to creditors; check with appropriate counsel.
Practical closing checklist
- Obtain recorded deed and determine ownership shares.
- Order an appraisal and a current payoff statement for any mortgage.
- Decide financing: refinance, loan, or cash.
- Negotiate and sign a written buyout agreement.
- Hire a title company or Indiana real estate attorney to prepare deed and closing package.
- Prepare and sign deed (quitclaim or warranty as agreed).
- Record the deed at the county recorder’s office.
- Update homeowners insurance and title insurance; inform the lender if mortgage refinanced.
Where to find official Indiana law and forms
Indiana statutes related to property and real estate are located in Title 32 of the Indiana Code. See the Indiana General Assembly site for the code: Indiana Code — Title 32 (Property). For local recording and transfer requirements, check your county recorder’s website.
When to consult an attorney
Talk with an Indiana real estate attorney if any of the following apply:
- Disputes about ownership shares or contributions to the property.
- Complex liens, unpaid taxes, or hidden title issues.
- You plan to refinance and need help removing co-borrowers from a mortgage.
- You anticipate a partition action or want to avoid one.
- Significant tax or estate planning consequences may arise.
Helpful Hints
- Start with a calm family meeting and a clear written proposal — many buyouts succeed by negotiation.
- Get a formal appraisal; lowball offers often backfire.
- Do not rely on a sibling’s promise to sign a deed later — always document and record.
- If you refinance, compare lender costs vs. seller-financing to find the best total price.
- Use a title company to run a title search and issue title insurance at closing to avoid surprises.
- Expect pro rata adjustments at closing for taxes, HOA dues, and utilities.
- Keep clear records of improvements and contributions; they can affect buyout math.
- If litigation seems likely, consult an attorney early — settlement is often cheaper than a contested partition suit.
Need help locating an Indiana real estate attorney or title company? Contact your county bar association or the Indiana State Bar Association for referrals. A licensed local attorney can review your deed, prepare tailored documents, and walk you through closing or a partition action.