Buying out my sister half of our inherited house

[Charley8268]

My parents both passed away a year ago. My sister and I inherited their house. I have just thought about buying out her half of the house and moving into it. She states that she is ok with this but that the only glitch would be that if I sell the house later, she gets half of any profits that are made over the current appraised value of the house. I don't think this is the case but I need to know if this is at all possible. It appears to me that I already own half of the house. If I were to buy out her half, doesn't that make it completely mine from that point and anything I do with the house is up to me? If I were to make modifications to the house, she isn't paying for those so how could she possibly be able to get any profits after I have bought out her half?
I great appreciate ANY and all info I can get on this matter.

Thank you!!!

 

[dee_dub]

If you agree she can share in any increase in value, then she can. Otherwise, she's out of the picture once she sells to you. The house is yours, and she's not entitled to a share of any increase (or decrease) in value.

 

[lwpat]

It sounds like she is wanting to have her cake and eat it to. If you decide to do it with her conditions, tie her down to a contract. You should get credit for the interest on the money you are paying her for her half, taxes, maintenance and improvements. Against this you would need to credit the fair rental value of the property since you are living there.

Otherwise, set up an LLC and put the house in it. You pay rent to the LLC which pays taxes, maintenance, etc.

Either way has its share of problems. I would offer her enough up front to get her out even if it is slightly more than the appraised value. Get a current appraisal since the market is depressed.