Selling Mother's House Within an Equal Estate Split

[Dirtclods]

Will and Last Testament was short, and to the point. All assets in her name was to be liquidated, and distributed evenly among all 5 of her children.
My older Brother has expressed interest in purchasing her home(where we all grew up), not an issue with me, nor the 3 other siblings but, we doubt brother can afford it without all of us are willing to ‘give a deal’ on the purchase price.
How have others navigated choppy waters like this. 4 of us are in our 60’s, youngest brother is 53.

So......what ever happened??

 

[Gary RV_Wizard]

So......what ever happened??

It's only been 36 hours since the original report, so stay tuned...

 

[Mr Lars]

We as a family group, decided on who the PR should be. Next step is to get approval from the Probate Court on our choice.
Once the PR has approval, the process will commence, per Wisconsin Probate laws.

 

[Mr Lars]

By the time everything plays out, and is all said and done, it will be about a year or so.

 

[Kittykamper]

By the time everything plays out, and is all said and done, it will be about a year or so.

Hang in there, Mr Lars. It’s so difficult losing a loved one, and then all the STUFF that comes afterwards. It sounds as though you and your sibs are in agreement about things, so that’s a good thing.

 

[Mr Lars]

I would not exactly say we are ‘all in agreement’(yet). Our Mothers death was no surprise to any of us.

 

[NY_Dutch]

By the time everything plays out, and is all said and done, it will be about a year or so.

Yes, not an uncommon time frame. I'm the executor of my wife's estate, and here in NY, the minimum time to settle an estate is seven months. I'm required to wait that long to ensure there are no outstanding debts that need to be paid from the estate account before I can close it with the probate court. In my case, since nearly everything was held in joint accounts, the distribution is pretty simple, but I still have to wait out the seven months.

 

[BizCrate]

Mr Lars - My condolences to you and your family on the loss of your mother. On top of the personal loss there is the settlement of your mother's affairs; which is difficult enough - but now the negotiation of a large and complicated asset with another family member on top of it all. I am sorry that you all are going through this.
There are many recommendations offered here - get full price, get a realtor, get a lawyer and don't do it are all here for varied reasons. I won't bother repeating all that. Any and all of it is good advice.
May I suggest reframing this and perhaps giving the situation a different lens?
What if a trusted, good family friend was interested in the home? How might you and you siblings approach this? Probably you'd get comps and see what a full list price might be. Then you'd consider what costs would go into prepping the home and what all of your seller costs might be. You'd also consider how long homes in this area take to sell and how far they get negotiated down below list before a sale is complete. Much of this is ballpark sort of calculations but you should be able to come up with something reasonable with a bit of investigation.
In this scenario, despite being a good family friend, you would expect your buyer to come up with his own financing. Also, his own downpayment. After all, your family deserves to be able to close the estate. The property cannot be left in your deceased mother's name in any case. After considering all of this maybe your family would like to give the friend a discount on the sale price to sweeten the deal and get a fast close. Maybe you won't offer it.
Bringing all of this back to your brother. Maybe he can afford the home, maybe he can't. He is an heir and a portion of the proceeds of that home are his. Should your family determine a sale price that reflects a discount in lieu of those closing costs I mentioned earlier plus maybe a few dollars more (or not) to sweeten the deal then that is the number he has to go to the bank with. He needs a sales amount in order to apply for a mortgage. He also needs a down payment. Remember that he is also an heir and that portion of the sales price can be attributed to his downpayment. Maybe this will get him qualified for the purchase from the estate. But then again - maybe not. If not it will have nothing to do with any of his siblings. It will be his ability to afford the mortgage payments, his credit, what ever - but it won't be because you took the chance to try away from him.
In the end, you will delay the sales process by maybe a month - just as long as it takes for the bank to make an initial decision on his qualifications to support the loan. If it falls through, then you have a home to sell. If it closes, then you've sold it and the remaining sibs get their split sooner rather than later. Either way, you maintain your relationship with your brother with no judgment or hard feelings.

 

[Mr Lars]

Thanks everyone. Everyone wants our older brother to able to purchase the property, for whatever the market dictates. He does have a house to sell, to be able to swing the deal. One of the hiccups is, he believes if he submits a bid, for the ‘asking price’ all marketing of the property should stop, even tho he has ‘contingencies’ on his side. ‘Bidding war’ and getting ‘bumped’ he considers dirty pool, and he has stated those should be illegal.

 

[TheBar]

If everyone wants him to have it temporarily stop the marketing. With a time limit. But don't let him move into the house until he closes on it.

The best time to sell a house is from March to the middle of July. If he hasn't sold his house by then he may be asking too much.

 

[rjshiflet]

Hopefully all will agree and things will move smoothly. When my Dad died (10 years after Mom died) my brother and sister and I were faced with disposing of his home too. My sister wanted to purchase it, my brother and I were in agreement. Best I remember we took the value of the house on the tax rolls and simply deducted that amount from her 1/3 of the inheritance. That's been 14 years, my brother has since passed and it never became a problem for any of us.

Times like this are hard on everyone and hopefully you have a loving family that can work their way through this amicably.

 

[TheBar]

est I remember we took the value of the house on the tax rolls and simply deducted that amount from her 1/3 of the inheritance.

Depending on the area tax rolls are usually under the actual market value to reduce complaints. Sometimes not being updated for many years.

 

[Oldgator73]

Depending on the area tax rolls are usually under the actual market value to reduce complaints. Sometimes not being updated for many years.

Correct. Tax rolls are normally thousands of dollars below market value. We purchased two pieces of property in SW Virginia. One was 11 acres and the other was 4 acres across the street. Our son was going to live on the 4 acres. The guy that lived across the creek decided he wanted the 4 acres because his wife liked to get in the hot tub on his deck naked. He said he looked up the value on the tax rolls and said he would give us $17k. Nope. I told him $22k. That’s what he paid. Now our son lives on the 11 acres and we purchased 40 acres with a cottage. We have to hurry and rehab the cottage because at 75 I don’t have much time left to enjoy the mountains.

 

[rjshiflet]

Depending on the area tax rolls are usually under the actual market value to reduce complaints. Sometimes not being updated for many years.

We looked into "comp" values and both my brother and I were completely satisfied with the tax roll value. Was it undervalued...probably slightly. Was that OK with us...it was.