Inheriting a property in joint ownership

[cyber69]

My wife and her brother have fallen out about selling a property they have both inherited well over a year ago now.

My wife worked hard to get it ready for sale and now my brother in law's girlfriend has changed her mind and they are saying they would like to move in.

They have a property which they would need to sell and they came round to us today to discuss how much they are willing to pay us.

Her brother had arranged for two estate agent valuations and took a value just above the base amount but instead of just dividing this sum into 50/50, he has taken off 1.5% estate agent fees plus vat off our half.

Agreed we would have had to pay this if we had sold the property but they are selling their own house and moving in so in reality no fee's are due - only the one's on selling their own property.

We verbally agreed at the time but reflecting on it, my wife is now thinking if it worth arguing about the false fee's he has taken off her half of the property.

It's not a great deal of money, probably enough for a week's holiday away somewhere nice.

 

[Nightglow]

You need to have you own valuation done, should have never had a verbal agreement, but proper written agreement, & I would have split fee 50/50.

I knew someone part inherited a house, it stay empty 30 years, because brother & sister couldn't reach an agreement to sale fairly, one of them then died, & house made a fraction of it's true valve at auction, due to the derelict state it had got in to.

 

[Maccapacca]

I'd defiantly get my own 3 valuations, check the asking price of similar and check zoopla or similar for historic prices and at least start with 50/50 tell him the added value is yours from the work your wife did and you're only being fair.

 

[boxman2000]

Seen a very similar thing to this recently in my extended family. Some advice, which may mean you have to start the process again:

1) Agree (in writing) on 3 independent estate agents to give valuations of the property
2) Agree (in writing) beforehand that the valuation will be an average of the three valuations
3) Agree (in writing) that all fees/charges/taxes will be split 50/50 as they are purchasing your 50% of the property
4) You may want to factor in out of pocket expenses (i.e. decorating and repairs/renewals to bathroom etc) and factor that in the split

If they can’t agree that then tell them that they will have to get a lawyer to draw up something (far more expensive for them) and if you agree to it then you will sign.

Best advice on any dispute is to get everything in writing, it means no comebacks (or little chance at least) and it should avoid ‘you said this, I said that’ arguments – sadly when it comes to money and inheritance, family relationships do tend to get strained, ultimately is it worth losing a brother or sister over for a few pounds?

I do think this type of situation brings out the best/worst in people so above all stand your ground but try not to let it ruin the family as at the end of the day life is too short and I’m sure the person that left you both the property wouldn’t want this to wreck a relationship.

 

[peterwalkley]

You need to have you own valuation done, should have never had a verbal agreement, but proper written agreement, & I would have split fee 50/50.

I knew someone part inherited a house, it stay empty 30 years, because brother & sister couldn't reach an agreement to sale fairly, one of them then died, & house made a fraction of it's true valve at auction, due to the derelict state it had got in to.

^^ This ... ^^

If the total value of the estate means that inheritance tax is due then they really should consult a Solicitor for advice. Should the revenue think they've been cheated of anything by a lowball estimate of the property value you are in for a whole world of pain and aggravation.

In terms of costs - although the estate agent's "fee" is not happening, I doubt they can get away without stamp duty. Again consult a solicitor.

You might be spending a few hundred quid on professional advice, but it's a false economy not to do it.

 

[ci_newman]

^^ This ... ^^

If the total value of the estate means that inheritance tax is due then they really should consult a Solicitor for advice. Should the revenue think they've been cheated of anything by a lowball estimate of the property value you are in for a whole world of pain and aggravation.

In terms of costs - although the estate agent's "fee" is not happening, I doubt they can get away without stamp duty. Again consult a solicitor.

You might be spending a few hundred quid on professional advice, but it's a false economy not to do it.

Technically they already own the house though, so unless their half of the house is over £125k there wouldn't be any stamp duty.

Definitely don't pay for their estate agent listing fees though, especially if you've spent money to get the house ready for sale. Or at the very least deduct these costs from their pot of money.

 

[cyber69]

Technically they already own the house though, so unless their half of the house is over £125k there wouldn't be any stamp duty.

Definitely don't pay for their estate agent listing fees though, especially if you've spent money to get the house ready for sale. Or at the very least deduct these costs from their pot of money.

Both of the estate agents valued the house at 190k tops but a realistic sale price of 185k so her brother gave us a figure of 186k which I suppose is not the average.

My wife's decided to accept their offer of 91.6k but is going to tell him she is not prepared to pay any solicitor costs etc.

Do you think this is a good compromise? She just wants to get it all sorted out now due to the way she's been treated by her brother.

 

[peterwalkley]

Technically they already own the house though, so unless their half of the house is over £125k there wouldn't be any stamp duty.

*Technically* they own half of it and there's a purchase for the other half. I don't know whether stamp duty applies, but was flagging up that they need to know for sure - hence suggesting a solicitor.

 

[ci_newman]

Both of the estate agents valued the house at 190k tops but a realistic sale price of 185k so her brother gave us a figure of 186k which I suppose is not the average.

My wife's decided to accept their offer of 91.6k but is going to tell him she is not prepared to pay any solicitor costs etc.

Do you think this is a good compromise? She just wants to get it all sorted out now due to the way she's been treated by her brother.

I'd get you're own valuation done too, however those figures look ok.

*Technically* they own half of it and there's a purchase for the other half. I don't know whether stamp duty applies, but was flagging up that they need to know for sure - hence suggesting a solicitor.

The OPs post above that the transaction is only for ~ £90k has cleared that up

 

[Macro]

I'd tend to work on the theory as others have said, 3 agreed estate agent valuations, take the average then work out if you had sold the whole property at that price (as you intended to do) how much you would have received. This is then how much they need to pay you so you neither gain not lose out compared to just selling the property to a third party and splitting the net proceeds 50/50.

I suppose the other thing to keep in mind id time scales. The housing market seems to be beginning to be on an up turn now so make sure you're happy with the arrangements. If the house is 200k now and you get 100k as your split, how would you feel if they move in and sell it in 12 months for 250k.

It's a bit of a mine field for bad feeling if you're not really careful and pragmatic.

I'd be inclined to sell it to a third party and split the money, any other route has the potential for falling out.

 

[HangTime]

Both of the estate agents valued the house at 190k tops but a realistic sale price of 185k so her brother gave us a figure of 186k which I suppose is not the average.

My wife's decided to accept their offer of 91.6k but is going to tell him she is not prepared to pay any solicitor costs etc.

Do you think this is a good compromise? She just wants to get it all sorted out now due to the way she's been treated by her brother.

To be honest £91.6k net from a 'realistic sale price' of £185k (assuming realistic) doesn't seem too bad as that is the equivalent of £183.2k even split and if you were to sell the house there would be agents fees to account for. I know they aren't actually selling the house but to realise the capital you'd have had to sell it and ultimately the fees for selling their old property to allow them to move in will factor into their decision.

While it may seem strange for your wife to have to stump up fees for selling her brother's house, if you look at it from the other side of the fence if she had just been handed a cheque for £95k she would have had a very easy life (circumstances leading to the inheritance notwithstanding of course!) compared to the alternative of needing to sell the house and stump up for half the associated fees.

If you had your time over again then a more structured approach as suggested would probably have been best but taking a sensible fee may be the best way forward to maintain good relations, perhaps just get your own independent valuation done to validate the £190k and go from there.

For what it's worth my father had a similar situation when he and my aunt inherited my grandparent's home, in that situation basically they valued the house and paid my dad 50% of the value, then my uncle who was in the building trade renovated the property and sold it for a healthy profit less than a year later. As far as I'm aware no real ill-feeling came of it though as ultimately my father isn't in the property developing business so received what the house was worth in its run down condition.

 

[Stretch]

Agents don't charge for a valuation. Not the ones I've delt with anyway.

Just get three valuations, take an average, get them to cough up half the money.

 

[Dave M]

*Technically* they own half of it and there's a purchase for the other half. I don't know whether stamp duty applies, but was flagging up that they need to know for sure - hence suggesting a solicitor.

Technically they both own 100% of it, jointly, there is no half and half. Unless the OPs mention of joint ownership was in error.

 

[Tesla]

Where has this estate agent fee come from? You shouldn't be paying an estate agent anything for this transaction.

 

[cyber69]

Where has this estate agent fee come from? You shouldn't be paying an estate agent anything for this transaction.

My feelings exactly. We all sat down together last weekend to sort this out and her brother showed us the estate agent valuations which looked fair and we accepted that the house would sell for £186k. I said to her brother then that my wife is due to expect £93k then as her share and then he piped up about these estate agent fee's of 1.25% plus the VAT which brought her share down to £91.6k.

As he is buying her share of the house, there is NO estate agent even involved in the transfer! He has to sell his own house to help buy my wife's share but he should then have to pay his own estate agent fee's.

I said at the time that to save arguments we would accept this lower figure and since then my wife has managed to speak to him again to say that she is prepared to accept this as long as he pays all the solicitor costs. We are waiting to hear back if he has accepted this.

We are not 'well off' and £1400 would pay for a family holiday this year so my wife is not happy about it now to say the least having had time to think about his actions.

Before their parents died they seemed to get on well as brother and sister but since their mum died he has spent no time at all helping my wife to decorate the house for sale and spent more time going out with his friends and going away for the weekends with his girlfriend whilst my wife has spent our weekends apart with me looking after our daughter and her over at the house.

It's created a great deal of animosity between them which is totally un-warranted.

My wife just said that if he does'nt accept the solicitor fees then she won't let him buy her half at that lower cost.

The £186 figure is not even the average between £185k and £190k. Sound like penny pinching I know, but considering it would take us a year to both save even £2k maybe she is entitled to every penny she is due?

 

[Tesla]

I agree with everything you've said cyber.

Just seems completely obvious that each sibling would end up contributing 50%. How else can it be fair?

I think it's fair for you and your wife to pay 1/2 the solicitor fee, this estate agent fee is bizarre. Perhaps your brother in law doesn't understand the process of buying and selling a house?

The best thing to do is to all talk to each other now. Don't go along with things and then hold a grudge the rest of your lives.

 

[cyber69]

My brother in law used to be a mortgage advisor! If he had'nt made up these estate agent fee's then I suppose we would have been prepared to contribute towards the solicitor costs.

He has not even sorted out the land registry fully in his and my wife's name since their parents died over a year ago. It's always been something he said he would do but never got around to it. Now he says that there is no need as the house will be transferred soley in his name once he buys my wife's share.