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Started By
Message
Needing advice on a home purchase
Posted on 9/27/22 at 10:19 pm
Posted on 9/27/22 at 10:19 pm
Back story:
- recently divorced at 49.
-sold our house to our eldest son in May.
- moved into my mom’s house in April because she was seriously ill.
- she passed away in the hospital in late May.
My two brothers were quick to get the ball rolling on getting her estate brought to probate. Not long after, I had the house/land appraised and it was valued at $310k.
After a conference with my brothers, they offered to sell the house/land to me for $300k (less my 1/3).
My question is whether I should buy them out or sell to a stranger (giving up family land). My 1/3 would give me a great cushion and allow me to possibly buy or rent a smaller home, while avoiding a big mortgage payment until I’m 69 y/o. The flip side is, it’s a great house and I would be getting a 33% discount.
- recently divorced at 49.
-sold our house to our eldest son in May.
- moved into my mom’s house in April because she was seriously ill.
- she passed away in the hospital in late May.
My two brothers were quick to get the ball rolling on getting her estate brought to probate. Not long after, I had the house/land appraised and it was valued at $310k.
After a conference with my brothers, they offered to sell the house/land to me for $300k (less my 1/3).
My question is whether I should buy them out or sell to a stranger (giving up family land). My 1/3 would give me a great cushion and allow me to possibly buy or rent a smaller home, while avoiding a big mortgage payment until I’m 69 y/o. The flip side is, it’s a great house and I would be getting a 33% discount.
9
Posted on 9/28/22 at 5:27 am to TrapperJohn
quote:I think you answered your own question there.
The flip side is, it’s a great house and I would be getting a 33% discount.
Don’t haggle around on the price. Something similar caused a rift between my dad and his brothers that never healed.
Posted on 9/28/22 at 5:44 am to TrapperJohn
Keep moms house and land for 200k.
No question.
No question.
Posted on 9/28/22 at 5:57 am to llfshoals
quote:
Don’t haggle around on the price. Something similar caused a rift between my dad and his brothers that never healed.
This, and you could always sell or rent it later. Could take out a HELOC or cash out refi and get the cash if that's what you're eyeing.
Posted on 9/28/22 at 6:02 am to themasterpater
There is nowhere else you are going to get an immediate 33% return that’s not even a cash on cash return.
Take the house, give it 6 months and then see if you want to sell or do something else with it.
And never make emotional decisions especially if time is on your side like it seems to be.
Take the house, give it 6 months and then see if you want to sell or do something else with it.
And never make emotional decisions especially if time is on your side like it seems to be.
Posted on 9/28/22 at 7:38 am to Im4datigers
quote:
There is nowhere else you are going to get an immediate 33% return that’s not even a cash on cash return.
He could just sell and cash out and gain the same amount.
Sell the house and find other investments.
Posted on 9/28/22 at 8:43 am to seawolf06
Thanks for the ideas guys. I was just making sure to get an outsiders perspective before hammering out the details. Now I just need to hope that the interest rate doesn’t spike before this all comes to a head in November.
Posted on 9/28/22 at 8:48 am to TrapperJohn
Personally, I think they should back off the price they're selling it to you for just for the convenience. No realtor fees, no staging of the house to sell, no time on the market, etc.
Just because it appraised for $310K, doesn't mean y'all were going to get that.
Just because it appraised for $310K, doesn't mean y'all were going to get that.
Posted on 9/28/22 at 8:58 am to REB BEER
Believe me, I was aggravated when they called and came down a whole whopping 10k off the price. Especially considering that I was the one left to help my mom while they stayed away. They’re charging me the same amount that they would charge you for it. Lol
Posted on 9/28/22 at 9:14 am to TrapperJohn
Yeah no way I would do that to a sibling of mine that’s in a rough spot. I would try to get it for less but try not to let it bother you too much.
This is a different topic for another day but I’m in my 30’s and I’ve had a grandparent recently die and others that are in rough shape and it’s so weird to see aunts and uncles fight over stuff that they haven’t even seen or looked at in decades
This is a different topic for another day but I’m in my 30’s and I’ve had a grandparent recently die and others that are in rough shape and it’s so weird to see aunts and uncles fight over stuff that they haven’t even seen or looked at in decades
Posted on 9/28/22 at 10:07 am to TrapperJohn
quote:
Now I just need to hope that the interest rate doesn’t spike before this all comes to a head in November.
Just remember you can always refinance after roughly 6 months. So, even if the rates continue to rise, when they start dropping you should be able to lock in at a better rate.
You also mentioned not wanting to be paying on it until you're 69. As others pointed out, you can always sell at a later date when the time is right. But, this gives you a nice house/land at a good price (should be better, but money does weird things to people) and some stability
Posted on 9/28/22 at 10:12 am to TrapperJohn
quote:
After a conference with my brothers, they offered to sell the house/land to me for $300k (less my 1/3).
Are you looking to get something comparable (or of more value) for less than what you would pay for this? If not (which is the most likely case), stay where you are and enjoy the great deal. Depending on where you're at there's no reason to think you shouldn't be able to sell when you're close to retire (if you want to downsize then) for far more than what you'll still owe.
Posted on 9/28/22 at 8:55 pm to TrapperJohn
Ultimately land creates wealth. Property for sale at 33% discount. What?!!! Where?!!!
Posted on 9/29/22 at 2:38 pm to TrapperJohn
I'll trade you brothers.
Posted on 9/29/22 at 2:51 pm to TrapperJohn
quote:
My question is whether I should buy them out or sell to a stranger (giving up family land)
Just my opinion but I would never give up family land if I had reasonable means to keep it.
Posted on 9/30/22 at 1:22 am to V Bainbridge
Let's assume you were to mortgage 206K at 6.5% you would be looking with a tax / insurance escrow about $400 your P/I/T/I payment would be about $1700/ mth. It would take you 30 years to pay it off, it you bumped your payments up to $2000/mth, you would pay it off in 18.5 years.
My recommendation would be to approach your brothers and offer them full value, but because of your situation ask if you could pay each of them $1000 / moth (effectively 2K / mortgage). You don't pay a dollar of interest and you'd simply pay the current tax and insurance bill out of pocket each year. You could have them paid off in less than 9 years and the house would be yours free and clear. Hell, I'd offer to pay them for 10 years and they would make 120K each, they would be happy, and you would still make out like a bandit.
This keeps the family home in the family, and it is a win win for everyone.
My recommendation would be to approach your brothers and offer them full value, but because of your situation ask if you could pay each of them $1000 / moth (effectively 2K / mortgage). You don't pay a dollar of interest and you'd simply pay the current tax and insurance bill out of pocket each year. You could have them paid off in less than 9 years and the house would be yours free and clear. Hell, I'd offer to pay them for 10 years and they would make 120K each, they would be happy, and you would still make out like a bandit.
This keeps the family home in the family, and it is a win win for everyone.
This post was edited on 9/30/22 at 10:01 am
Posted on 9/30/22 at 12:07 pm to oneg8rh8r
This is a great idea! hopefully OP has a good relationship with their brothers and would be amenable so something like this.
Posted on 9/30/22 at 8:22 pm to TrapperJohn
In this market, I'd let them list the house. Then when it sits and price gets lowered you can move on a deal.
Posted on 10/1/22 at 1:25 am to dragginass
I’m not understanding the 33% discount logic? Your 100K of value via inheritance doesn’t count as a “discount” it’s just your brothers would be having a liquidity event and you would have the house.
Do you want the house? If so, then keep it. If you want the land to remain in the family, then do so. This appears pretty straightforward if you actually want to remain in the house.
Do you want the house? If so, then keep it. If you want the land to remain in the family, then do so. This appears pretty straightforward if you actually want to remain in the house.
Posted on 10/3/22 at 5:45 pm to TrapperJohn
Is $310k the number used for estate tax purposes, or something lower? If a lower number, it seems they should give you something closer to that price.
If you like the house you could still accept at $300k, but would you buy that house if you had $100k to use as a down payment on a home?
If you like the house you could still accept at $300k, but would you buy that house if you had $100k to use as a down payment on a home?
This post was edited on 10/3/22 at 5:48 pm
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