home ownership and paying off sister (1 Viewer)

[Cees Alons]

That wouldn't make a formal difference, because it only cost him $15k and no more, to achieve that.

It's the other possibility that's more problematic: if the effect was less than spent (money "wasted"). But from Donnie's post, I understand that this is not the case.

Better keep it simple anyway. Doing "business" with family is always tricky.


Cees

 

[Jeff Ulmer]

Another way to deal with the reno cost is to charge your sister half, then simply work out your equity.

The main thing is to settle on something that isn't going to cause conflict later on.

 

[MarkHastings]

That's a good idea too.

 

[Donnie Eldridge]

I'm going to presenting this offer tonight. This purposed deal is more than fair in our opinion, but opinions do vary. We do get along, but we couldn't be in two more completely different places in our lives. 27 and single vs. 37 and married. I suspect the 3k will be an issue. However, there are several upgrades noted in our break-down which we intentionally did not itemize as a gesture to her.

 

[GordonL]

I agree - this is the most equitable approach.

 

[Cees Alons]

That IS what's happening.
Just calculate both methods, it will come out the same.
(In the example: $62,500 + $7,500 = $70,000)



Donnie,

Good luck!


Cees

 

[Ted Lee]

i'm kinda in that camp as well. she didn't participate in the reno, why should she reap the rewards.

of course, she is your sister.

 

[Micheal]

Unless the person living in the house was making mortgage payments and the person not living in the house wasn't.

 

[Cees Alons]

Not really. If the person living in the house payed the other owner's mortgage payment as a sort of "rent", you could argue that the other still payed his/her half of the mortgage (but also received rent).

Just don't make it too complicated, I'd say!


Cees

 

[JonZ]

"Then if the worth of the house is $140k now, and you spend $15k upgrading it (and she didn't spend any before, nor you), then the value without the upgrade is $140k - $15k = $125k.
So you need to pay your sister $62.5k."

I agree. Sounds very fair to me.

 

[MarkHastings]

What he spent on the renovations is meaningless...Who's to say that the renovations are worth exactly what he paid (either higher or lower)? What if he got $40K worth of renovations for $15K? That means the pre-renovated house is only worth $140K.

In this case, $140K - $40K = $100K
sis only gets $50K


Actually, here's a REAL world example:
A friend of mine was trying to sell her home for $250K. She had a HARD time selling it for that much and they were saying it was worth more like $220-230K. The big reason was she only had 1 bathroom. She had a toilet downstairs in a corner, but it wasn't considered a "half bath" - The real estate agent told her, if she were to wall the toilet in, it would THEN be considered a half bath and she'd have no problem asking $250K.

Now I hardly think it would cost $30K to put up a couple of walls. So the few $$ it costs to make it a half bath, would have made it's worth go up like $30K.

 

[Cees Alons]

The difference is a potential of the house. To be attributed to both owners of the property.

In your example, the buyer could have done that renovation him/herself. So why would he/she ever pay more than the amount it cost to change that?

Stupidity of the market, perhaps, but that's not a point if you're the buyer yourself and dealing with family, like in this case.

And we even don't know if this situation exists here. So why just introduce another topic of arguments, instead of keeping it clear and clean?


Cees

 

[Yee-Ming]

Reminds me of a curiousity of the Engish property market I was introduced to: I was staying with a friend who owned a flat in London, and the guest bathroom's sink had the typical English two-tap set up (one hot, one cold), which is IMO a PITA and impractical. She'd hooked up an attachment of tubing to the two taps that took the output of both taps and mixed them to a single output -- in effect a temporary mixer.

I asked why she didn't simply install a proper mixer, as most of us in this country would have. She told me the property agent told her that it would make the property more difficult to sell in future (which she probably would in future when she and hubby pack it up there and return home to Singapore).

The weird thing is, just how much would it have cost a future buyer to change a mixer back to two taps if they really wanted it (even though IMO it's an archaic and impractical setup)? OK, then again plumber's charges are notoriously high...

 

[Donnie Eldridge]

It's over and the deal was accepted after a couple of hours of going round and round. Interest was tacked on retroactive from the time she moved out and the money will be wired to her account next week. Everyone is satisfied and relieved it's over. Thank God!!!

 

[Jeff Ulmer]

And you're still married too? Good job man!

 

[Cees Alons]

Congratulations, Donnie!


Cees

 

[Scott Merryfield]

This was the most important outcome. Congratulations on working things out to everyone's satisfaction, Donnie.

 

[Colton]

Not going to tell us who was closer as to the final closing costs? :frowning:

- Colton

 

[MarkHastings]

Congrats on the deal Donnie.

Now that it's done, I'll continue what I brought up before without feeling like I'm derailing the thread Oh my god! My brother said the same thing to me when I painted my condo walls. He kept saying "It's gonna be harder to sell it in the future if the buyer doesn't like the color" Like I'm going to stick with white walls because I'm worried about selling (years down the road). :frowning:

 

[Yee-Ming]

Heh. As if any buyer is going to keep the place in "original condition", first thing most buyers do is do major renovations on the place anyway. But I guess the problem is one of first impressions, if they don't like the way it looks, even if they're planning to renovate, the buyers don't get a good feel for the place, or will want to push down the asking price.