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View Full Version : Selling my inherited house - which way is best?


JamesMom
05-27-2010, 12:22 PM
Hello again, Ms. DramaQueen with another delimna (look up my old threads if you want all the backstory).

Anyways, I inherited my mother's 24 year old house. The will was probated last week. She paid $82,000 back in the day. And it's not worth that it appears...
The house does need paint inside & out and has the original kitchen (appliances & lino flooring). The upstairs bath has peeling flooring which migh suggest water damage and the roof probably needs to be replaced but that can be covered under insurance which is still in force (I know, because I wrote the check in Feb.). And it needs a water heater. The carpet is mismatched upstairs but is only about 2 years old for the replaced botton floor. Otherwise the house looks great (especially now that it is empty except for sparse furniture & stuff for insurance).

Also, paying the neighbor to water/mow and general lookout for the house costs me $150 and water/electric run about $150-250 a month (especially now that North Texas is heating up). Taxes ($1300) & insrance ($1700) for 2010 are paid up. So it costs me roughly $600 a month to maintain the house. I start paying these costs beginning in June. I will be reimbursed from the estate for the costs through May.

I contacted 3 investors (people who buy houses on the cheap to flip for profit).
I got an offer for $50,000 and another for $58,000. The third didn't give firm number (as he is a broker) but thought $58,000 as well.

I just got off the phone with a respected (many references) realtor and she thought worst case scenario we would netr $66,000 but closer to 68,000 or $70,000 with a list price of $82,000.

Wow. Ugh. It truly is a shame. I move there in a heartbeat because it is a nice house but not in a good neighborhood (probably why the values didn't budge) and we LOVE where we live now (house & neighborhood).

So, do I sign a 6-month realtor agreement and pray we can sell it within that time frame and net an extra $6-8K (when factoring carrying costs) or just dump it now and cut my losses.

budbeerlady
05-27-2010, 01:35 PM
Are there other homes for sale on the street or close by? IF so then I might do the dump it and run routine. My family has been trying to sell Grandma's condo since she passed last fall. They have lowered the price 3x and its been almost 9 months that they have been paying the electric, association fees, etc. It starts to add up and the one offer they had was so low it was insulting. But that's MI and there were 4 other condos for sale in the complex.

JamesMom
05-27-2010, 01:43 PM
The broker and realtor came up with 61 homes had activity in the area in the last 6 months. There 5 homes for sale within 1 street of her house... And there are 5 foreclosures in her development. You get the picture.

PlutoPony
05-27-2010, 01:53 PM
What is the stepped up cost basis for the house? In other words, how much was the house valued at when her will was probated? As I understand it, the amount your mother paid for the house matters in settling her estate but has no bearing on your situation. If you sell for more the stepped up value you pay tax on the gain, less and you have a loss. How does this value compare to what realtors are telling you to price the house?

minnie1928
05-27-2010, 01:53 PM
So, do I sign a 6-month realtor agreement and pray we can sell it within that time frame and net an extra $6-8K (when factoring carrying costs) or just dump it now and cut my losses.

You might get the $6-8000, you might not...it may end being $2-3000 if you end up negotiating (money towards closing, lowered price, etc.). For that small amount, I'd dump and run. It's less stress on you and less for you to worry about (roof, water heater bursting, neighbor issues that might arise, etc.). Plus, dump and run would let you put it all behind you and start to move on...I think that would be worth it for the closure.

nunzia
05-27-2010, 02:03 PM
I voted take the money and run...I guarantee there will be issues with selling the house through a realtor, buyers will want things fixed, inspectors will insist on this or that, etc. Plus, there is realtor fees, closing costs, appraisals, etc etc.

sk!mom
05-27-2010, 02:10 PM
The broker and realtor came up with 61 homes had activity in the area in the last 6 months. There 5 homes for sale within 1 street of her house... And there are 5 foreclosures in her development. You get the picture.

Given that information, I'd "dump and run." I don't like hassle and I'd prefer to get out from under the expenses for a sure thing that would also eliminate the hassle of trying to sell and having it drag out for months.

JamesMom
05-27-2010, 02:13 PM
What is the stepped up cost basis for the house? In other words, how much was the house valued at when her will was probated? As I understand it, the amount your mother paid for the house matters in settling her estate but has no bearing on your situation. If you sell for more the stepped up value you pay tax on the gain, less and you have a loss. How does this value compare to what realtors are telling you to price the house?

My attorney listed the house at $80,000 on the original application for probate. Tax records for 2009 show its value as $104,000 but I subtracted $25,000 for needed upgrades and such and it seems I was right on the money as to price. I was actually hoping to walk away from the table with $80,000 -- not the listing price...
I have yet to submit the inventory of assests. I was waiting to get an accurate value first.

BTW - the $66,000 - $68,000 realtor net was after all the fees (realtor, title, warranty), $3K for closing costs [she said the fees & costs would be around 10% of price] & $5K buyer reduction from the listing price.

Vacation Lover
05-27-2010, 02:56 PM
The broker and realtor came up with 61 homes had activity in the area in the last 6 months. There 5 homes for sale within 1 street of her house... And there are 5 foreclosures in her development. You get the picture.

I definitely think you should go the investor route and get this done and off your mind quickly. Good luck!

I remember your old thread. Do you mind updating us as to what happened with the siblings?

cornfarmer
05-27-2010, 03:29 PM
If you are paying approx $600 / month for maintenance/taxes/ins/etc...that equates to $7200 / year. And you are hoping in best case to net $80,000 on the sale ( if placed on the market ); vs $58,000 cash..that means you need to sell the home in under 3 years to come out ahead in this game.

With the number of homes in the area for sale, plus the repairs that are needed ( i'm not sure if insurance would replace your roof..the damage needs to be from a covered peril...not normal wear and tear)

Plus it sounds like the home is not close to your current location...it all adds up to taking the money now. Perhaps you could negotiate the selling price a little.

perhaps you could visit with your neighbor that is taking care of the place if he knows of anyone interested in buying?

Best of luck:thumbsup2

JamesMom
05-27-2010, 03:29 PM
I definitely think you should go the investor route and get this done and off your mind quickly. Good luck!

I remember your old thread. Do you mind updating us as to what happened with the siblings?

Thanks for the reply.

As far as the siblings go- nothing has really changed.

The brother I am closest to talks to me around 2x a month, like always. He comments that he is still angry with my mom, but not me. He doesn't know about selling the house or my trip to WDW - don't want to flaunt it - and he doesn't ask.

The other two excluded siblings didn't talk to me before, so nothing's changed there. I am still on my half-sisters bulk mail list (she sent pics of TN flooding since she lives there).

They still talk to my Aunt (mom's sister) and have expressed disappointment, the brother especially was extremely hurt, but no derogatory comments towards me (at least not that my aunt has mentioned to me).

I am still firm on my decision to send them some money once the statue of limitations runs out on the estate for creditors (mid-September, 4 months) and I can begin disbursements. Everyone knows that some money is coming, just not the amount.

I'll be visiting my Aunt next month so I am sure I'll get a more complete picture when we are face to face vs. email.

BTW - should I post this on old thread, too?

JamesMom
05-27-2010, 03:32 PM
If you are paying approx $600 / month for maintenance/taxes/ins/etc...that equates to $7200 / year. And you are hoping in best case to net $80,000 on the sale ( if placed on the market ); vs $58,000 cash..that means you need to sell the home in under 3 years to come out ahead in this game.

With the number of homes in the area for sale, plus the repairs that are needed ( i'm not sure if insurance would replace your roof..the damage needs to be from a covered peril...not normal wear and tear)

Plus it sounds like the home is not close to your current location...it all adds up to taking the money now. Perhaps you could negotiate the selling price a little.

perhaps you could visit with your neighbor that is taking care of the place if he knows of anyone interested in buying?

Best of luck:thumbsup2

Actually the SALES price is $80,000. After selling costs, closing costs and realtor fees and $5K discount, I should walk away with a check [net] for $66,000 - $68,000.

I live 45 minutes away. The roof was damaged in a hail storm that other homes had redone in her neighborhood March 2009. Same one that took out our roof, too.

Actually, the neighbor did know of someone looking to buy, but unfortunately the potential buyer's mother lived only 4 doors down -too close for her comfort ;)

Thanks for the reply.

MaryKLady
05-27-2010, 03:42 PM
Another vote for take the money and run. IMHO I wouldn't spend the time and effort involved in listing it. Especially knowing there are other homes listed in the area and some foreclosures. Good luck to you whatever you decide.

deerhart
05-27-2010, 03:51 PM
its really to late to take the money and run. You signed the 6 month listing contract with the Realtor and even if you sell it yourself, you still have to pay her fees based on the sale price. So now its the $58k MINUS the realtor fees

JamesMom
05-27-2010, 04:08 PM
its really to late to take the money and run. You signed the 6 month listing contract with the Realtor and even if you sell it yourself, you still have to pay her fees based on the sale price. So now its the $58k MINUS the realtor fees

Uh, I haven't signed anything with anybody yet. I just asked these people to run unconditional and free numbers for me I am taking the weekend to finalize my decision and thought I'd ask my wise Disfriends for some free unadulterated advice :)

cmjaffe
05-27-2010, 04:19 PM
take the $$ and run and get $$ back on the taxes and insurance you pre-paid. Are you living in the house? 'cause if you're not then you might have to get a higher premium insurance since the home in not occupied, then when the buyers come and when it goes to get approved by mortgage company (hopefully getting to that point) there might be delays and you'll have to stress it's "as is". A dear friend was in this position and she went through 3 offers until on finally went through with financing.

WHat I'm trying to say is "it's just not worth getting $5-10K more (which will be split up anyway) for the wear and tear on your part vs. a sure thing.
Good luck with your decision.

Luvchefmic
05-27-2010, 04:25 PM
I quietly sat on the sidelines & read your other thread, I voted take the money & run, go the investor route....IMHO you need to get a fresh start in life and put all this behind you.

lorac4disney
05-27-2010, 04:27 PM
I don't see where OP stated that she signed a contract, but was asking if she should.

If I were you, I'd take the money and run.

neatokimmo
05-27-2010, 05:32 PM
Can you sell it on your own? I just finished probate on my Dad's stuff. I dumped the realtor, and reduced the price to what we would have gotten if it had sold for full price minus 6%. It sold in a couple of weeks.

zumbergc
05-27-2010, 05:45 PM
take the money and run. WOrking with a realtor, and getting all the stuff fixed so some one will want to buy it. Lots of work, you live 45 min away, arranging all that stuff ... might wnat to move on and dump it.

micheleq
05-27-2010, 05:46 PM
Don't list with a relator if you have potential buyers that are investors (I assume they are contractors that will tear down, hence potentially no need for inspection and def. no need for a home warranty). I voted take the money and run. Save yourself the time, money and aggrivation! If you have a cash offer now, TAKE IT. You may list with a realtor and have this house sit on the market for a year or more.

Good luck!

marlynnp
05-27-2010, 06:33 PM
<snip>

The house does need paint inside & out and has the original kitchen (appliances & lino flooring). The upstairs bath has peeling flooring which migh suggest water damage and the roof probably needs to be replaced but that can be covered under insurance which is still in force (I know, because I wrote the check in Feb.).

<snip>




I am confused by your statement concerning insurance coverage.
You do realize that insurance does not cover roof replacement unless it's damaged by a storm or tree falling, etc., right?

And even then you'd be hard pressed to get much on a 24 year old roof.

Taja
05-27-2010, 07:47 PM
Normally, I'm in the hold out, make repairs and sell it later camp.

In this case, I'm with the "take the money and run" group. :)

Reason #1: Location, location, location. If it's in a bad location that is not trending toward an upswing, you could be waiting years for the price to increase, even with the repairs and renovations. Your return on investment would be slim, and you have about $7200 annual carrying costs, even without the repairs and renovations.

Reason #2: It sounds as though this inheritance is causing you stress with your family (did not read previous post). And you're likely to net about the same amount of money either way, unless the market changes suddenly and drastically!

It's a great idea to spend some time--the weekend--to think things through. Put the various scenarios in writing--complete with $$$$$ so you have a clear picture.

Good luck with your decision!

deerhart
05-27-2010, 08:54 PM
Uh, I haven't signed anything with anybody yet. I just asked these people to run unconditional and free numbers for me I am taking the weekend to finalize my decision and thought I'd ask my wise Disfriends for some free unadulterated advice :)

ahh misread what you wrote. I thought you said you signed the contract. If you didn't then by the time you pay a realtor, pay all the expenses while the house sits there until it sells, your not going to net much difference then if you just sell to an investor now.

dd50
05-27-2010, 09:31 PM
I would take the money and run. The stress alone isn't worth it for not that much more money. Make sure that when you sell that you are selling "as is".

DisMN
05-28-2010, 06:17 AM
I'd take the money and run. My thoughts would be that *I* didn't pay for the house so anything less than what your mother paid for it isn't really your loss anyway.
Right now all you're doing in paying for upkeep is spending down any money you'll actually GET selling the house.
What I'm saying is that for you there is no loss, no real need to compare what was paid for the house and what you'll now actually get for it.

Good luck!

Bren's Mom
05-28-2010, 08:47 AM
Given the current housing market, it's highly unlikely that you'd be able to list for $82k and sell for $80k. Most likely the sales price would be lower, and with additional concessions. Plus, you have no clue what might show up in a home inspection. And you're paying carrying costs in the meantime. And if the house is on the market for a long time, you have to worry about infestations, potential damage or a big ticket item giong wrong...not worth it.

Sell it the one of the investors. $58,000 as is.

Irin997
05-28-2010, 10:54 AM
Sell it the one of the investors. $58,000 as is.

:thumbsup2:thumbsup2:thumbsup2

A "potential" extra $6k-$8k isn't worth the hassle of dealing with a realtor and listing the house and then hoping it will sell fast. SELL NOW! An investor will be a cash transaction - no financing, nothing. You can close super quick and be done with it.

Good luck!

bettymae1121
05-28-2010, 02:47 PM
take the $$ and run and get $$ back on the taxes and insurance you pre-paid. Are you living in the house? 'cause if you're not then you might have to get a higher premium insurance since the home in not occupied, then when the buyers come and when it goes to get approved by mortgage company (hopefully getting to that point) there might be delays and you'll have to stress it's "as is". A dear friend was in this position and she went through 3 offers until on finally went through with financing.

WHat I'm trying to say is "it's just not worth getting $5-10K more (which will be split up anyway) for the wear and tear on your part vs. a sure thing.
Good luck with your decision.

:thumbsup2:thumbsup2:thumbsup2

A "potential" extra $6k-$8k isn't worth the hassle of dealing with a realtor and listing the house and then hoping it will sell fast. SELL NOW! An investor will be a cash transaction - no financing, nothing. You can close super quick and be done with it.

Good luck!

Ditto. Super ditto. Infinity ditto. :thumbsup2 :thumbsup2 :thumbsup2

stitchlovestink
05-28-2010, 03:26 PM
I am confused by your statement concerning insurance coverage.
You do realize that insurance does not cover roof replacement unless it's damaged by a storm or tree falling, etc., right?

And even then you'd be hard pressed to get much on a 24 year old roof.
she said the roof was damaged in a hail storm....that would be a covered insurance peril.

Could you go back to each of the two investors offering the same amount and see maybe if one of them would be willing to cough up an extra $1K or $2K?? just a thought....

JamesMom
05-28-2010, 03:36 PM
OP, here

Thanks for all the replies. Overwhelming y'all agreed with what my gut is telling me: SELL!

I contacted the investor who gave me an offer and asked for a contract. I should have it by this evening. On Tuesday, I'll run the contract by my lawyer to make sure nothing hookey is going on and hopefully will be done with this problem in two weeks.

It just a cotton picking shame that it has come to this. I guess I'm not done mourning yet...