Buy out inherited property

[Mark Chambers]

My wife and her sister inherited their dad’s house after he passed. The house is in Northern California and we live in Pennsylvania. We want to buy her sister out of the property, but don’t know where to begin because we’ve only bought 3 properties in Pennsylvania through a realtor. 
Where do we begin?  Would it be a conventional mortgage as a 2nd home?  Will financing be easier since she’s technically already an owner?  How to we coordinate to get the title transfer?  

A lot of this would have been handled a lot better during probate but the attorney was pretty useless and we definitely don’t want to use her for trying to figure this out. 

The house was appraised at 450k and we’d be paying her sister 200k. Any help or guidance is appreciated!

[Katie Balatbat]

@Mark Chambers

Date of death was after February 15, 2021?  Just confirming to ensure you are not missing out on possible property tax savings.  In CA, most people use realtors/brokers for a sale, but in this context given the related party, you may be able to do it more privately with an attorney and escrow.  It may depend on if you want a more formal procedure, or added protections such as all the inspections that go along with a traditional sale. Also, if you're paying less than fair market value, you may need to be careful regarding gift taxes.  If you received a basis step-up at dad's date of death, you may be able to sell with little to no gains, and then choose to invest those funds in an alternate property closer to home, if desired.  Of course, all of this should be discussed with your realtor, attorney, and tax advisor.

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.