How to Sell a House in Alabama When There Are Multiple Owners

Owning a house with other people has a number of marked advantages: the financial burden of bills and repairs can be shared, and the labor of, say, yard work and maintenance is usually spread among multiple owners. But problems can come up when it’s time to sell. While the actual selling process is pretty much the same as with a single-owner home, bitter disputes – concerning, for example, what price to ask, when to sell, and how to sell – among the owners can arise that make selling no less than infuriating. Add in even more contentious situations, such as selling a house during divorce, and the process gets complicated even further.

Find Out Exactly How the Title Is Held

The first step in selling a home in Alabama with multiple owners is to clearly establish how the title is held. This is essential because different types of ownership come with distinct legal rights and responsibilities. If the property is owned by more than one person, it’s crucial to review the deed and determine the ownership structure. The way the property is titled directly impacts the process of selling, as each type of joint ownership has its own set of rules for transferring ownership and dividing proceeds. Understanding this will guide you through the selling process and prevent disputes down the line.

The two most common types of joint ownership are “joint tenants” and “tenants in common.” Joint tenants are co-owners who hold equal shares in the property, and in the event of one owner’s death, the surviving owners automatically inherit their share. For a sale to occur, all co-owners must agree, and if one owner refuses to sell or disagree on the terms, the process could be delayed. In such cases, if an agreement can’t be reached, legal action may be necessary. On the other hand, tenants in common hold distinct, undivided interests in the property, and each co-owner’s share can be sold or passed on to heirs. This type of ownership offers more flexibility when one co-owner wants to sell their portion, but all parties involved must still come to an agreement before the entire property is sold.

When it comes to joint tenants, since the property is owned equally, a mutual decision must be made about selling the home. This can be a point of contention if one party wishes to sell while the other does not. The property cannot be sold without the consent of all owners. However, if a dispute arises, and an agreement is not reached, the court can intervene and order a forced sale. In some cases, the court may also decide how to divide the sale proceeds, based on each party’s share of ownership. This makes it essential for joint tenants to communicate effectively and reach a consensus to avoid potential legal complications and costly delays in the sale process.

In cases where the property is owned as tenants in common, the process of selling may be slightly more complicated, but it still allows flexibility. Each co-owner can independently sell their share of the property, without needing approval from the other owners. However, if the goal is to sell the property as a whole, all parties must agree to sell. The sale proceeds are then divided according to the ownership percentage of each tenant. Another option is for one owner to buy out the other’s share, making it easier to complete the sale without external interference. This method can often simplify the process and help avoid legal disputes, especially if the co-owners wish to move forward with selling quickly. Understanding the nuances of ownership types is crucial to ensuring a smooth and efficient sale in Alabama.

How to Reach an Agreement

The first step when selling a property in Alabama with multiple owners is to understand how the title is held. The way the property is titled determines the rights and responsibilities of each co-owner, which can significantly affect the sale process. For example, if the title is held as joint tenants, both owners have equal shares in the property, and both must agree to the sale. Conversely, if the property is held as tenants in common, each co-owner owns a percentage, which may not necessarily be equal. This knowledge will help you understand how to move forward with the sale and ensure that all parties are on the same page.

Once you’ve established how the title is held, the next step is to determine how decisions, including the sale of the home, will be made. For joint tenants, the decision to sell must be unanimous, as all owners have equal rights to the property. If one owner refuses to sell or disagrees on the terms, it can lead to a delay or a legal dispute. In situations where a consensus cannot be reached, a court order may be needed to force the sale, and the proceeds will be divided based on each party’s ownership share. On the other hand, tenants in common have more flexibility. Each owner can sell their individual share without requiring consent from the others, although selling the entire property still requires agreement from all co-owners.

In cases where a sale agreement is difficult to reach, one co-owner may consider buying out the others. This can be a more straightforward approach if one party wishes to retain ownership while the others wish to sell. However, when selling as tenants in common, the proceeds from the sale are divided based on the ownership percentage of each co-owner. This division can sometimes complicate the sale, particularly if one co-owner has a larger share or if there are disagreements on how to value the property. Understanding these differences is essential to moving forward with a sale in a way that is fair and legally sound, helping avoid unnecessary delays or costly disputes.

Legal Issues 

If you to sell a house in Alabama when there are multiple owners, you also need to be aware that there are typically more legal issues to deal with (at least potentially). In fact, “[l]iens, loans and unfavorable legal judgments belonging to one seller can complicate and even derail an entire house sale for all involved.”

“Whether married, divorced, or single, a home seller who owes creditors may incur liens against their name and real estate owned. Tax liens, mechanics liens, unpaid child or spousal support, and other major delinquent debt resulting in legal judgments against one seller can affect the sale of a home. For example, an IRS tax lien would have to be repaid before closing or at closing with sale proceeds in order for the house sale to close. If paid at closing, this additional cost would impact the total net sale proceeds due to the sellers after closing.”

If such legal issues are a concern when you’re trying to sell a house in Alabama with multiple owners, be sure to contact a real estate professional at 251-312-5100 for some guidance.

The Investor Advantage

Ultimately, then, selling a house with multiple owners can involve a number of problems, and the process is littered with potential pitfalls. Although the selling process is no different from that for a single-owner house, outside factors can ratchet up the difficulty in completing the sale. That’s why it’s vital to work with an experienced Alabama homebuyer. We’re no strangers to helping resolve the many difficult selling situations that arise and can help you navigate the whole process. So if it’s your goal to sell a house in Alabama with multiple owners, contact us today at 251-312-5100.