Selling my inherited house - which way is best?

[JamesMom]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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

 

[JamesMom]

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]

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

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]

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]

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]

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]

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]

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]

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]

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]

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.