Determining Acceptable Value of Inherited Real Estate?

[2manyrocks]

One thing I would consider is replacing the estate attorney with another attorney who does not have any ties to the siblings to be sure that I was receiving truly independent advice regarding administration the estate.

 

[MAX-24-Dean]

I like the way you think as I’m here paying a few bills at the house tonight.

Doubt it would fly but worth a try.

At this rate I will be working at least a few more years…

I’ve been number 2 seniority at work for a few years… when folks retire I remember when they started working here.

Opps… wrong thread about being old.

I find my mind worked this way when there was to much on the plate.
I think you are better prepared than most to work through this real estate puzzle with the family.
Been in this exact situation one time in my life, and the best thing in my case was just to wash my hands of it. Sold the property and distributed the funds per the Trust documents.
Real estate market tanked and got the family homestead back in a bargain basement deal 4 years later.

My favorite expression in cases like this, "is where two or more people are gather together there will be conflict". Which is generally true from my experience.
Communication and listening without trying to formulate a response. Vs responding right away without due consideration of what was originally spoken.
Family relationships are a sometimes delicate, then can go south after adding dollar signs to the equation.

Hoping you get this all figured out without the expense of losing relationships within the family.

 

[Torvy]

Lots of advice here seems to be ignoring the goals as I understand them.

1) OP wants to buy the house, not sell. (Or just delay sale.)

2) OP prefers to remain on good terms with siblings.

Point 1 is further complicated by CA prop 13. Time is a bigger factor.

My advice, such as it is..

Sit down with each sibling alone. Find out their objective. Max cash? Quick end? Some other emotional thing? Maybe the idea of you owning the home reminds them of their guilt for not helping mom more?

You've been a good son and sibling. Your sibs don't care that you helped mom or anything else you have done. Try to let your previous efforts go in terms of how those efforts figure into this. Those rewards will be in heaven, God willing.

As to the sale. What if they sold you the house at appraised value? One can be listing agent, the other selling agent. You take possession and clean it up as you see fit over the next X years. At that point, put the house on the market to get offers and a 'market' value. Once the offers come in, you can match them or sell. Siblings get 2/3 the difference in value, less any documented expenses for improvements or sale prep. (Including your labor).

If you decide you are done with your siblings, go the lawyer route. Squeeze everything you can out of them legally. Change your own will to leave your estate to charity or a friend. I don't think this sounds like you, but...

I would also definitely fire the estate attorney and find someone impartial who specializes in this stuff. (Find the person first, then fire).

 

[ultrarunner]

When my grandmother passed, she left one of my two uncles as the executor; the will just stated that the estate was to be split three ways (my mother & her two brothers).

The executor-uncle got everything valued and split things by value, without cashing everything out; my Mom felt she came up short but not enough to fight it; she also pretty much expected that from that brother. After a few years they were ok again.

IMO there's no good answer; ultra is screwed any way he does this. Stick to the letter of the will but don't go out on a limb trying to make the others happy because you'll come up short and if you're anything like me it'll leave a bad taste in your mouth.

Get multiple assessments of the property value, average them, tell your siblings how much they'll get. Are they going to waste a good sized chunk of the estate because they didn't get to speculate? It's on them to abide by the will, and if they refuse, they're the ones breaking the family goodwill.

As it was explained to me... appraisals are worthless unless lender or otherwise required.

Appraisals show what has happened but not what is happening and the market can turn on a dime.

I think a drawer full of appraisals would not help or be a substitute for a well executed market plan leading to a sale...

This is what I heard many times in the course of the meeting.

I'm ok with listing with right to match but that is only agreeable if the place was made ready for sale...

Trying to sell it as is will not get top dollar... and may only be suitable for a cash buyer if not eligible for a mortgage...

 

[MattB4]

One thing you could do is have your siblings read this Thread. If that don't change their minds than nothing would.

 

[Sigarms]

As it was explained to me... appraisals are worthless unless lender or otherwise required.

Appraisals show what has happened but not what is happening and the market can turn on a dime.

I think a drawer full of appraisals would not help or be a substitute for a well executed market plan leading to a sale...

This is what I heard many times in the course of the meeting.

I'm ok with listing with right to match but that is only agreeable if the place was made ready for sale...

Trying to sell it as is will not get top dollar... and may only be suitable for a cash buyer if not eligible for a mortgage...

Your first 3 sentences had me scratching my head, then it hit me you were talking about your siblings by the 4th sentence.

Correct me if I'm wrong, but you want to buy the house at market value correct? Why if the answer is yes?

Correct me if I'm wrong again, but since you're single and I believe have no children of your own, you're basically leaving everything you own on your passing to the children of your siblings or the your siblings themselves?

Assuming those answers are yes to to my questions above, I honestly don't see what the problem is.

 

[EddieWalker]

This probably has nothing to do with this situation, but since it hasn't been brought up, and it's something that I've run into, I'll bring it up.

In my experience as a Contractor, the people that have the hardest time paying for repairs to their homes all live in the biggest houses, drive the nicest cars and have the types of jobs that you would think they are super wealthy. These people spend money like crazy, they are maxed out in debt, and they have to write post dated checks for a thousand dollars.

These people will do just about anything to just breath for a month and not stress over what bills they can pay, and what they have to put off. I know a surgeon that makes $50,000 a month that refinanced his house just to avoid paying his mortgage for a month. It's truly crazy how they waste money, charge and finance everything, and then don't have the cash to pay all their bills. I've gotten to the point that I don't even respond to people that live in a few "High Dollar" neighborhoods here in Tyler. Nobody takes longer to pay for work then "Rich" people!!!!!

I have a client who barely stopped her kid from stealing $90,000 out of her savings account. The kid told his mom that he needed to be listed on the account for when she passed away so he could handle her affairs. She's in good health, early 80's, and relying on that money for whatever may come up before she dies. While meeting with the bank to put his name on her account, the banker explained to her that her son would have full access to the money and he would be able to use all of it whenever he wanted. That's not what she was told by her son before going to the bank, and she realized that her son had lied to her. She changed her mind about putting him on the account. I was at her house when her son started calling her and screaming at her over the phone about not being able to get "his" money, and that she didn't need it. He had just returned from an overseas vacation that she told me that she didn't understand how he and his wife could afford going on. That was before Christmas, and I haven't been back to her house since then, so I don't know what the final outcome was. It just struck me as a really horrible thing to have a kid that wants your money so badly that he didn't care if she had enough to live off of or not.

I'm not saying this is why the siblings want to cash out on the house right away, but I'm also saying that you never really know where somebody is financially based on how they are living.

 

[CliffordK]

I missed where you said you would prefer to keep the house.

I think everyone is ignoring the utility of an appraisal.

Say you were going to sell the house. You hire a real estate agent who appraises the home and does a market analysis, then the home is listed. You get an offer, and decide if it is acceptable. Normally the offer is around the price the home is being offered for. In a really HOT market, the offer may be slightly over the asking price. In a dead market, the home sits on the market for a couple of years.

Your real estate agent will be able to tell you if they would expect an offer for a couple percent over the asking price.

Get all the furnishings appraised.

Then you sit down, make up a spreadsheet of who gets what. And you make it all happen.

What you didn't mention was whether there were assets in the estate beyond the value of the home. If that is the case, then the other siblings get more cash, and you get more house. It should be able to work out for all.

 

[Sigarms]

I have a client who barely stopped her kid from stealing $90,000 out of her savings account. The kid told his mom that he needed to be listed on the account for when she passed away so he could handle her affairs. She's in good health, early 80's, and relying on that money for whatever may come up before she dies. While meeting with the bank to put his name on her account, the banker explained to her that her son would have full access to the money and he would be able to use all of it whenever he wanted. That's not what she was told by her son before going to the bank, and she realized that her son had lied to her. She changed her mind about putting him on the account. I was at her house when her son started calling her and screaming at her over the phone about not being able to get "his" money, and that she didn't need it. He had just returned from an overseas vacation that she told me that she didn't understand how he and his wife could afford going on. That was before Christmas, and I haven't been back to her house since then, so I don't know what the final outcome was. It just struck me as a really horrible thing to have a kid that wants your money so badly that he didn't care if she had enough to live off of or not.

I'm not saying this is why the siblings want to cash out on the house right away, but I'm also saying that you never really know where somebody is financially based on how they are living.

Thank you for that story.

I feel truly blessed now with my relationship with my own father.

Here I was trying to convince my dad to spend his money on himself instead of holding onto it for me.

As parents, the best we can hope / pray for is for our children to be self sufficient on their own and wise enough to save and be fiscally responsible.

 

[Torvy]

Real estate agents should not be appraising homes. They can guess what the market will bear and help set prices. Appraisals come from professional appraisers who don't have a stake in the result.