Sister buying me out of parent's vacation home

[Anonymous]

Anonymous wrote:OP here: Quick question -- I decided to ask realtors what they thought it would sell for because all of the houses in the area sell for well above their appraised value. So doesn't that seem like the fairest measure? I talked with the third agent yesterday and she thinks that there would likely be a bidding war on the house and it could go up as high as $425,000. (There are almost no lake front houses on the market.)

I think that my sister will definitely buy me out of the house -- she is having a new boat delivered next week after all. I've been very clear that I don't want to co-own the house. My family won't be using the house at all.

I'm the executor so I've been handling everything with the estate and I would handle the sale of the house too.

I don't really need the money from the house but also don't want to just give it away either. Contrary to what some people here think, this whole process hasn't been particularly contentious. I just don't want her to complain to the aunts/cousins (who live near her) that I'm being a jerk.

A couple of things here - as to the bolded: what conversation(s) have you had with your sister? Have you said point blank you aren't interested in owning or co-owning the house? Because I am getting the feeling that hasn't happened and that maybe you are a little worried about how that will go?

As to what is fair - are you working with a lawyer in your capacity as executor? If you are, then have them write up a proposal re: valuation. They should know what the accepted method is. Realtors may or may not have good advice - bottom line they want to sell the house and make a commission, so that's their viewpoint, which is why one is telling you they think there could be a bidding war.

[Anonymous]

Anonymous wrote:OP here: Quick question -- I decided to ask realtors what they thought it would sell for because all of the houses in the area sell for well above their appraised value. So doesn't that seem like the fairest measure? I talked with the third agent yesterday and she thinks that there would likely be a bidding war on the house and it could go up as high as $425,000. (There are almost no lake front houses on the market.)

I think that my sister will definitely buy me out of the house -- she is having a new boat delivered next week after all. I've been very clear that I don't want to co-own the house. My family won't be using the house at all.

I'm the executor so I've been handling everything with the estate and I would handle the sale of the house too.

I don't really need the money from the house but also don't want to just give it away either. Contrary to what some people here think, this whole process hasn't been particularly contentious. I just don't want her to complain to the aunts/cousins (who live near her) that I'm being a jerk.

Jesus Christ, she’s your sister. You don’t need the money. She would have to take out a mortgage if you go for the higher amount. Just take the $150,000 or whatever and call it a day.

[Anonymous]

This is an inherited family vacation home staying in the family. I say $100-150 in cash now no grudges and be done with it.

[Anonymous]

Anonymous wrote:This is an inherited family vacation home staying in the family. I say $100-150 in cash now no grudges and be done with it.

But the sister will have the right to sell it a week after the deal is settled so I wouldn’t take a discount under an assumption it’s staying in the family.

[Anonymous]

If it could go for 425 on the open market, then 200k with a 10 year provision that it stays in the family. If she buys you out for 150 and then sells it at the end of the summer for 425/450, you will be taken advantage of.

[Anonymous]

Anonymous wrote:This is an inherited family vacation home staying in the family. I say $100-150 in cash now no grudges and be done with it.

This is ridiculously low considering what the OP updated us on. I'm not as rich as you so to me, I'd ask for half of what the house would sell for. I'd even consider putting it on the market and letting sister buy it from the estate from a realtor - that way I know I got a fair price for it especially if there would be a bidding war on it.

[Anonymous]

Anonymous wrote:OP here: Quick question -- I decided to ask realtors what they thought it would sell for because all of the houses in the area sell for well above their appraised value. So doesn't that seem like the fairest measure? I talked with the third agent yesterday and she thinks that there would likely be a bidding war on the house and it could go up as high as $425,000. (There are almost no lake front houses on the market.)

I think that my sister will definitely buy me out of the house -- she is having a new boat delivered next week after all. I've been very clear that I don't want to co-own the house. My family won't be using the house at all.

I'm the executor so I've been handling everything with the estate and I would handle the sale of the house too.

I don't really need the money from the house but also don't want to just give it away either. Contrary to what some people here think, this whole process hasn't been particularly contentious. I just don't want her to complain to the aunts/cousins (who live near her) that I'm being a jerk.

Look at the prices of sold houses on Zillows starting from six months ago that should be close estimate.
Real estate agents usually exaggerate to get you to list it with them.

[Anonymous]

An assessment by the county is not the same as an appraisal. As an executor you should engage a licensed residential appraiser to value the property. That way you have something that is not biased you can rely on for the value, and negotiate/discount from there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here: Quick question -- I decided to ask realtors what they thought it would sell for because all of the houses in the area sell for well above their appraised value. So doesn't that seem like the fairest measure? I talked with the third agent yesterday and she thinks that there would likely be a bidding war on the house and it could go up as high as $425,000. (There are almost no lake front houses on the market.)

I think that my sister will definitely buy me out of the house -- she is having a new boat delivered next week after all. I've been very clear that I don't want to co-own the house. My family won't be using the house at all.

I'm the executor so I've been handling everything with the estate and I would handle the sale of the house too.

I don't really need the money from the house but also don't want to just give it away either. Contrary to what some people here think, this whole process hasn't been particularly contentious. I just don't want her to complain to the aunts/cousins (who live near her) that I'm being a jerk.

Look at the prices of sold houses on Zillows starting from six months ago that should be close estimate.
Real estate agents usually exaggerate to get you to list it with them.

Agree with this. real estate agents say all sorts of things that don't always end up being true. OP since it hasn't been contentious and you got through the death of your parents unscathed (relationship wise), and it would probably make your parents happy that she keep and enjoy the house -- offer the $150 and if she counters with something a bit lower just take it and be done with it. It is NOT worth your relationship. And don't mention the guns. Having to deal with that is a pain you don't want so just let them deal with it, who knows if they can actually get the value you see online, very possible not.

Not being in conflict with family members is worth a lot. also I agree with other posters it doesn't sound like you have been clear that you want a buy out. You should do that asap. She may have a new boat coming, but you have no idea if she got a loan for that boat or if she used cash she WOULD have used to buy you out if you haven't communicated that... she needs to know and be able to plan. It sounds like this is important to her and would be pretty devastating to sell so I think you need to be clear now.

[Anonymous]

Two sides to this: Does the sibling and her family live driving distance from the lake house? Have they gone there every summer for years while it belonged to Grandma and Grandpa’s? What did the parents pay for it? Is the current value a lot higher? Should they maybe have left the property just to your sister and her family (because they live more nearby and have some emotional attachment to it)? Are you posting on an anonymous board to justify and assuage guilt in forcing your sibling to pay half of the current market value or else sell? Could she buy you out in installments over time?

[Anonymous]

OP here: I have been exceptionally clear that I want a buy out. All of the utilities have been put in her name, the house insurance is in her name, etc. We've only waited until this point because all of his investments have been finally been divided between us. If she wants to, she can use the money from the estate to buy me out. She mentioned that she may want a mortgage to save some of the money to improve the house/property.

As for the real estate agents, they are all family friends/church members who know both of us so I thought they would give us a fair assessment. I didn't want to mislead an agent into spending time doing an estimate thinking that they were going to list the property. I didn't think that they would give us inflated values.

But after reading some of the helpful comments here, I think the right answer is to contact our accountant and then appraisers if it's recommended. My husband would be furious if we ended up with tax complications because we (once again) let my sister take advantage of the situation.

I do want to maintain a relationship with my sister, mostly because I want to have my nieces in my life. I've only taken a couple silly sentimental things from the house. All the jewelry, furniture, guns, etc she can have. And she has told me that she will probably keep the house for about 10 years and then sell when her oldest graduates from high school. I think that she will put a lot of work into the place and will likely sell if for a lot more money, and I'm fine with that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Depending on how small of a mortgage she might need, a bank might not do that.

Is the house currently covered by a mortgage? Or is it currently owned by the two of you mortgage free? If it’s the latter, just give her a little mortgage yourself and cut her a break. It won’t kill you. Why let a bank make money off of your sister when you can make money off of her?

Never do this. The sister will feel compelled to pay the bank but will let it slide to get sister. If she gets behind it will get ugly. Ask for the $150 plus agree to divide up the contents and sell or be bought out of any you both want. I assume the agent’s pricing is for selling it empty? You could also get an appraisal but you’ll have to pay for that. What’s the assessed value? That could be very low if prices have gone up recently and/or few sales

[Anonymous]

Anonymous wrote:OP here: I have been exceptionally clear that I want a buy out. All of the utilities have been put in her name, the house insurance is in her name, etc. We've only waited until this point because all of his investments have been finally been divided between us. If she wants to, she can use the money from the estate to buy me out. She mentioned that she may want a mortgage to save some of the money to improve the house/property.

As for the real estate agents, they are all family friends/church members who know both of us so I thought they would give us a fair assessment. I didn't want to mislead an agent into spending time doing an estimate thinking that they were going to list the property. I didn't think that they would give us inflated values.

But after reading some of the helpful comments here, I think the right answer is to contact our accountant and then appraisers if it's recommended. My husband would be furious if we ended up with tax complications because we (once again) let my sister take advantage of the situation.

I do want to maintain a relationship with my sister, mostly because I want to have my nieces in my life. I've only taken a couple silly sentimental things from the house. All the jewelry, furniture, guns, etc she can have. And she has told me that she will probably keep the house for about 10 years and then sell when her oldest graduates from high school. I think that she will put a lot of work into the place and will likely sell if for a lot more money, and I'm fine with that.

It just seems like dividing the estate could have been done differently to avoid tax issues. Rather than her buy you out, you get the money/investments, she gets the house.

[Anonymous]

Anonymous wrote:Fine or be decent and reduce it more so she does not need a mortgage.

+1

You mention you are more well off. How about $100k?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Have you asked her what she thinks a fair price for her would be? Not based on the appraisals, but how much of a family discount she thinks is fair?

This is idiotic. If the estate had $350k in a savings account, should the OP ask her sister what she thinks the appropriate split should be, because they're family? OF course not. Why is this any different?

+1 Get an appraisal, or two and take the average of the two appraisals, and charge the sister who’s keeping it half of the appraised value. Sister also keeps the contents. The end.