Elderly in-laws refuse to sell house that needs $200k of work, are out of money, can’t get loan

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone actually identified this new “safer place to live”? If the expectation is that your in laws will sell their home without any idea what the future options might be, I don’t think that’s realistic, or healthy, or kind. Perhaps some in — or outside of — the family could take the step of identifying for them what their wish lists and non-negotiables might be — should they leave their home, and identify a few options that might meet these criteria. This might be a long and laborious process, but it probably will be anyway. If they can see some positive aspects related to moving , that might help a bit.

Thank you. This is a very thoughtful comment. Yes, we have spent time looking at other properties in the same small town they live in and have found several really great options. Their area has not been too severely impacted by the real estate crisis; you can get a 2500 square-foot one level new construction house for under $300,000. They could even continue to have water access with a home in the range of $400,000.

It sounds like at their ages and stages, assisted living with a memory care option might be best. If they buy a new home they might have to sell it again really soon.

This was my thought. I'd abandon plans for an intermediate house and start checking out assisted living and memory care so that if/when there's a crisis, you have options in mind.

[Anonymous]

Side note...you mentioned hurricane season which suggests this house may not be a sound investment even if you can technically take it over. I'd bring that and the related insurance questions up to DH.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have a frustrating, stressful situation going on with my in laws. This will be long as it is complicated, but I would love some advice from anyone who may have been there before (my condolences).

* In laws are in early 80s, with moderate health problems, but can live independently and safely drive. They’re mentally competent but there are a couple signs of early dementia for one of them and they have become deeply sentimental at this stage in life. DH’s sibling lives nearby and regularly checks on them. We live across the country.

* They are terrible with finances — making poor “investments,” buying collectibles on eBay, going out to fancy dinners because keeping up with appearances is very important to them. They owe $100,000 on their mortgage. They are almost out of money. FIL works a few days a week for pocket money. DH and his sibling deposit a modest amount of money to their account on a semi-regular basis.

* They are deeply, emotionally connected to their large ramshackle house. They are terrible about upkeep and have always cut corners or done failed DIY projects. The house needs $100,000 in repairs to make it sellable/more livable, $200,000 to make it competitively sellable/more permanently livable. It somehow assessed for $600,000 (large lot with water access on coastal state). Even with the lower end of repair work done it would likely be a developer buy where the house would be torn down.

* They are in denial about their circumstances, and their plan is to stay in their house until the end of their days. They joke that will have to take them out feet first, even though, like the majority of people, especially those with health problems in their senior years, they will likely require assisted care at some point. For one, that could be within the next couple of years; the other could probably live independently for maybe 10 years.

* ALL of their problems could be solved by selling which would let them move into a smaller, safer, newer home; pay off their mortgage debt; and enjoy the remaining cash flow from the sale to help see them through the end of their days (or most of them).

* They absolutely refuse to sell. But the house is in such poor shape that they don’t qualify for a reverse mortgage. They could take out a home equity loan but wouldn’t be able to make the payments on it because they would need so much work done, and it also doesn’t help with daily expenses the way a reverse mortgage could.

* DH’s sibling just bought a house and isn’t in the position to give them the money they need to make the repairs. DH and I could make their home equity loan payments for them, but it would mean we’d have to stop making contributions to our 401k, for who knows how long. We are also saving to buy our own home and have kids who need to go to college one day, so it’s not ideal. DH is willing to do it, but I am not.

* Getting them to sell is the best choice for everyone of course. It buys them financial freedom, gives them a safer place to live, and cash to work with. But they are dead set on staying, even at the risk of continuing to minimally improve their living situation while worsening their financial situation, and even if their continued bad choices keep money out of the pockets of their children who keep financially helping them.

Outside of eventually having to get POAs to take over handling this horrible property and their finances when they eventually get too elderly to manage it, is there anything else we could possibly do? I have suggested that DH and his father meet with a financial planner to have a third party show them how selling would be a positive and staying would be a negative. I also suggested that he try to set up a meeting with a family counselor who can help walk through some of these very deep, emotional connections they are feeling to the house, as the reality of their situation just isn’t sinking in. He is game but needs to talk to his parents about both and doesn’t know if they will buy in to either. In the meantime, he is wracking his brain to see if there’s any other financial way for his parents to stay in their beloved (dilapidated) house but I truly think there’s no other option. Either they sell, or they stay and stay consumed with underfunded repairs they will constantly be in debt for. And eventually we will be too.

If you do not yet own your primary residence, and 401ks and 529s are not fully funded, then you CAN NOT afford to help financially. You have to bring DH around to grasp this. It is incredibly poor judgement to put your own financial future and the future of your children at risk in order to fund your in-laws' preferences. It would be a different call if you were using the funds for groceries or critical medications or to keep the heat on.

+1000

Best advice on here. OP, on behalf of your kids….don’t finance this nonsense.

[Anonymous]

Anonymous wrote:Thank you for your reply. Yes, that was something DH mentioned. That if we were to pay their home equity loan payments they would leave us the house. Other sibling is OK with it. The issue is 1) I don’t want to risk our financial future making these payments, 2) we truly want nothing to do with this property. We would never live in it, and I frankly do not see eventually having this property as any type of asset. I only view it as an absolute liability. Trying to sell it, have it torn down and sell the land, and doing it from mini thousand miles away. If that’s our first foray into real estate, I certainly don’t want it to be that. If we were entrepreneurs, or had a history of flipping houses, or made much much more money, maybe… But I want nothing to do with, the risks of this property and being saddled with having to deal with it. DH is more open but he often is.

you might be right but you would not tear it down yourself. you would sell it to a developer or builder who would then tear it down.

[Anonymous]

if the house is going to be torn down, it doesn't actually need a new roof.

[Anonymous]

Anonymous wrote:if the house is going to be torn down, it doesn't actually need a new roof.

But it might to get through another potential decade of hurricane seasons before they pass and it is sold.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Thank you for your reply. Yes, that was something DH mentioned. That if we were to pay their home equity loan payments they would leave us the house. Other sibling is OK with it. The issue is 1) I don’t want to risk our financial future making these payments, 2) we truly want nothing to do with this property. We would never live in it, and I frankly do not see eventually having this property as any type of asset. I only view it as an absolute liability. Trying to sell it, have it torn down and sell the land, and doing it from mini thousand miles away. If that’s our first foray into real estate, I certainly don’t want it to be that. If we were entrepreneurs, or had a history of flipping houses, or made much much more money, maybe… But I want nothing to do with, the risks of this property and being saddled with having to deal with it. DH is more open but he often is.

you might be right but you would not tear it down yourself. you would sell it to a developer or builder who would then tear it down.

Yes, we won’t be responsible personally for tearing it down. We don’t want the hassle of having to deal with the liability of the property and sale of it, and doing it from a different side of the country. DH is more willing to do it if we need to do it, but agrees that the house and land are not an asset in our eyes and it would be challenging to be mixed up in it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Thank you for your reply. Yes, that was something DH mentioned. That if we were to pay their home equity loan payments they would leave us the house. Other sibling is OK with it. The issue is 1) I don’t want to risk our financial future making these payments, 2) we truly want nothing to do with this property. We would never live in it, and I frankly do not see eventually having this property as any type of asset. I only view it as an absolute liability. Trying to sell it, have it torn down and sell the land, and doing it from mini thousand miles away. If that’s our first foray into real estate, I certainly don’t want it to be that. If we were entrepreneurs, or had a history of flipping houses, or made much much more money, maybe… But I want nothing to do with, the risks of this property and being saddled with having to deal with it. DH is more open but he often is.

you might be right but you would not tear it down yourself. you would sell it to a developer or builder who would then tear it down.

Yes, we won’t be responsible personally for tearing it down. We don’t want the hassle of having to deal with the liability of the property and sale of it, and doing it from a different side of the country. DH is more willing to do it if we need to do it, but agrees that the house and land are not an asset in our eyes and it would be challenging to be mixed up in it.

I think you are overthinking that part. It’s very easy to say as is condition and absolve yourself of liability in the sales process. In the meantime i think you need to put your kids first and close the flow of money to the in-laws if you have do not even have a house. You are finding someone else’s house. A few months of tight finances may be the wake up they need.

[Anonymous]

I think DH and sibling have to stop depositing money into Mom and Dad's account.
Send them a gift card to a grocery store if you are worried they don't have enough to eat, for sure.
But no more cash.

Pay for a home inspector to come and give a complete picture of what will need to be repaired to make the home liveable, and to get an idea of what it will all cost.

If a new roof is needed, see if your In laws have any county or state programs to help elders afford a new roof. Use the information from the inspector and try to connect your in laws to programs to help elderly with repairs.

But do not use your own money. At all. You don't have enough money to support his parents in crazy financial decision making.

Let the police know your In laws are elderly and have a bad roof and may need to be evacuated in a hurricane. but YOU don't fix their roof.

[Anonymous]

let them run out of money, the only thing is worth is the land of the house which they can't get to anyways

[Anonymous]

I would think about doing some kind of cash for equity in the house exchange. I understand why you don’t want to do it, but honestly selling a house (especially an as-is that will be torn down) is not that much of a hassle. You just need to instruct a realtor.

I agree you should do nothing that jeapardizes your own financial situation, but this would get you an asset in exchange. And washing your hands of the situation may prove untenable.

We had to do something similar to bail out my inlaws - we gave up our interest in a family trust so they could close it down and get the cash. In exchange we made them put the house in a trust which we are administering for their benefit (so we don’t have to bail them out again).

[Anonymous]

Anonymous wrote:Fix the absolute necessary things only and sell the house as is when the time comes. Let them stay in their house and stop being a bully.

Did someone's parents find the thread?

No. You don't pay the bills for competent adults, and if they're not competent, you make the decisions for them.

OP, I'm sorry you and your husband are going through this. I hope he can channel his feelings into finding a better place for them to live.

[Anonymous]

You need to follow his brothers lead and not be in a position to give them money. I’m curious how much you are currently giving them? What is a modest amount? You aren’t in a position to do this. Financing their home when you don’t even own one is crazy town and will lead to a ton of resentment in your own marriage.
They will figure it out or they will have to sell if they can’t. Buying crap and expensive meals out would clearly be an easy way to lower expenses. Your husband would really jeopardize college funds for his parents’ whims?

[Anonymous]

Anonymous wrote:

Anonymous wrote:would they sell you half the house for less than market value so you can fix it up and allow them to live there until they pass? With the agreement that you inherit the house entirely at that time?

The bigger issue is we don’t want the house or anything to do with it. We don’t even own our own house yet and we don’t want the liability of theirs, even if it may be “deal” at some point. Just not an option.

I don't understand how it is a liability? And if you don't own a house yet.... but you are able to get one for half off, that's a good deal. As an investment/flip. You don't have to live there.

[Anonymous]

Also hire a home inspector to inspect it and give you a list of must-dos. Evaluate whether or not it is too much based on a list of facts, not your fears. I had a guy come in and do this for me for like $250.