Written by Russell Harrist
Colorado Certified Residential Appraiser · Certified Probate Expert (CPE) · 25 Years of Experience
Published October 13, 2026
Selling is not the only outcome. Often one heir wants to keep the family home and pay the others their share. The number that makes it fair depends on which value is used, what is subtracted, and who chooses the appraiser.
Most guidance about inherited property assumes the house will be listed and the proceeds divided. In practice there are three outcomes, and families often spend months deciding among them.
The simplest path. The market sets the price, closing costs are real, and everyone receives the same kind of asset: cash.
All heirs stay on title. This postpones the hard conversation, and it means agreeing indefinitely about repairs, taxes, insurance, and tenants.
One person keeps the home and pays the rest their share. This is where an independent value matters most, because the price is negotiated rather than tested by the market.
A buyout is the only one of the three where no buyer competes for the property. When a home sells on the open market, the price proves itself. In a buyout, somebody has to supply that number, and the family has to trust it.
Nearly every estate has a date of death appraisal, so families reach for it. It is already paid for and it carries an official-looking number. Using it as the buyout price can quietly move thousands of dollars from one sibling to another.
The two values answer different questions:
If the estate settles quickly and the market has not moved, the two numbers may be close enough that it does not matter. Eighteen months later in a market that has shifted, they can be far apart. The heir buying at a stale low value captures the appreciation that all the heirs waited through. The heir buying at a stale high value overpays for a decline nobody caused.
A practical rule. The date of death value belongs on the tax and court filings. The buyout price should normally reflect the property's value at or near the time of the buyout. If the estate appraisal is recent and the market has been steady, it may serve both purposes. If significant time has passed, a current value is worth discussing. Your attorney should confirm what the will, trust, or settlement agreement requires, since some documents specify the date to use.
A buyout price is rarely the appraised value divided by the number of heirs. Several adjustments come first, and each one is worth discussing openly rather than assuming.
The selling cost question. The heir keeping the home will often argue that commission and closing costs, perhaps 7 to 8 percent of the price, should be deducted, because that is what the others would have netted from an actual sale. The other heirs reply that no sale is happening, no agent is being paid, and the buying heir should not pocket a discount for costs that will never be incurred.
Both positions are reasonable, and there is no universal answer. What matters is that the family decides deliberately, with the attorney's input, rather than discovering the assumption buried in someone's spreadsheet. On a $600,000 home with three heirs, that single decision moves roughly $15,000 per sibling.
Write the arithmetic down. Set out the appraised value, each deduction, and the resulting share in one short schedule everyone can read. Most buyout disputes we see are not disagreements about the appraisal. They are disagreements about a subtraction nobody explained.
It happens constantly. The adult child who lives nearest the parent is named personal representative, and that same child is the one who wants to keep the house. One person is then on both sides of the transaction: the fiduciary who owes a duty to every heir, and the buyer who benefits from a lower price.
Colorado law addresses this directly. Under C.R.S. § 15-12-713, a sale to the personal representative, or any transaction affected by a conflict of interest on the personal representative's part, is voidable by any interested person who did not consent, unless the will or a contract entered into by the decedent expressly authorized the transaction, or the court approves it after notice to interested persons.
In plain terms: a personal representative who buys estate property without the will's authorization, the other heirs' informed consent, or court approval has created a transaction that a disappointed heir can later unwind. That risk does not expire when everyone is getting along at the kitchen table.
What protects everyone. An independent appraisal ordered for the estate, not arranged privately by the buying heir, with the same report given to every heir at the same time. It is evidence that the price was set by a disinterested professional rather than by the person on the other side of the deal, and it is the kind of documentation an attorney wants in the file if the transaction is ever questioned. Your attorney should advise on whether consent, court approval, or both are needed in your situation.
Few heirs have the cash on hand to buy out siblings outright. Financing is usually part of the plan, and it brings a second appraisal into the picture, ordered by the lender and reflecting current value rather than the date of death.
The existing mortgage does not automatically come due. Under the federal Garn-St Germain Depository Institutions Act, codified at 12 U.S.C. § 1701j-3(d), a lender holding a loan on residential property of fewer than five dwelling units may not enforce a due-on-sale clause on certain transfers, including a transfer to a relative resulting from the death of a borrower, a transfer by devise, descent, or operation of law on the death of a joint tenant, and a transfer where the borrower's spouse or children become owners. Heirs are frequently told, incorrectly, that inheriting a mortgaged home forces an immediate payoff.
Refinancing to fund the buyout. Conventional guidelines contemplate a refinance used to buy out a co-owner's interest, generally requiring a written agreement signed by all parties covering the transfer and the use of proceeds, with the heir becoming sole owner receiving none of the proceeds and qualifying for the loan on their own. Fannie Mae's twelve-month joint-ownership documentation requirement does not apply to a recent inheritance of the subject property. Guidelines change and lenders apply overlays, so the buying heir should confirm current terms with a mortgage professional early, before the family commits to a price and a timeline.
Other heirs sometimes accept a promissory note secured by a deed of trust, letting the buying heir pay over time. That is a legal arrangement to be drafted by an attorney, and it still begins with an agreed value.
Disagreement about price is normal and usually solvable. A few approaches, roughly in order of cost:
Agreeing on the process before anyone sees a number is the single most effective thing a family can do. It is much easier to accept a figure you helped choose the method for than one that arrives after you have already formed an expectation.
If an heir believes an appraisal is wrong, the productive response is specific: a comparable sale that was not considered, a material condition issue the appraiser could not see, or a square footage or room count that does not match the property. Appraisers can and do address substantive errors. "It feels low" is not something anyone can act on.
Read the will or trust before negotiating. Shares are not always equal, and the document may specify how value is determined.
Who orders the appraisal, as of what date, and whether everyone accepts the result. Put it in writing before the report exists.
A written schedule of deductions, and an attorney-prepared agreement and deed. Handshake buyouts between siblings age badly.
Great Estates regularly provides appraisals used for buyouts and equalization among heirs in Denver, Arapahoe, Douglas, Elbert, and Jefferson counties. If you are unsure whether your existing date of death appraisal will serve as the buyout basis, call before ordering anything further. Often it will.
Great Estates provides real estate valuation services and does not provide legal or tax advice. Statutes and lending guidelines are summarized here for general information and change over time. Consult your attorney and tax professional regarding your specific responsibilities.
When one heir is buying and the others are selling, the appraisal should come from someone with nothing at stake in the outcome.