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Old 07-20-2009, 11:37 AM
 
802 posts, read 2,007,234 times
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Okay, the short version: I am executor of parents estate, house to sell, had an investor come by and look at the house. We discussed $$$ but nothing firm. Now, my nephew wants to buy from the estate, financed through the estate (can't get mortgage - lousy credit - foreclosure due to divorce). Lots of pressure from family to do this....

How do I sell this house to a relative, financing him? I have no experience in buying/selling a house, no idea where to start.
Where do I begin? An Attorney? Title Company? can anyone give me the basic steps?

I have spent the last 36 hours hashing out the cons in my mind, and tehre are many and there's only 1 or 2 pros for this, I'm at a loss.
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Old 07-20-2009, 11:51 AM
 
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I'm assuming you have an estate's attorney, right? I'd start there.

And for what it's worth, having been through several estates in the last few years, there is no way in hell that I'd do what you're considering.

Who will do you wrong quicker than friends? Family. Every.single.time.

Sad but true.
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Old 07-20-2009, 11:52 AM
 
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You almost certainly should get an attorney to at least go over the details.

Personally I would be more than a little worried about a nephew with lousy credit. If he is going to be responsible for making payment back to the estate that is a HUGE hassle to any other benefactor's of the estate and what happens if he defaults? That is going to be a costly / ugly situation.

The pros are almost certainly heavily stacked on the side of the credit challenged nephew.

It might be much easier to give this a thumbs up for a low price and standard financing -- just how credit challenged is the nephew? Is his level of irresponsibility so bad that is risk that he won't maintain the property? What about insurance? Taxes? Utilities?

If you just sell it outright to some unknown party would any of the benefactors just gift their share of the proceeds to the nephew? Would any of the benefactors be willing to cosign a loan for a house for this kid for another house?


Lots to consider...
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Old 07-20-2009, 11:52 AM
 
Location: Nashville, TN
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Potential mess here. You named it-lots of 'cons' and very few 'pros'. IMO, the estate would be taking a huge risk financing your nephew to buy the house if he can't qualify for a mortgage. If you pursue this I would suggest going to an estate attorney. My guess is that this attorney will give you all of the reasons you shouldn't have the estate finance your nephew's purchase. It would probably then be easier for you to present this to the other relatives as to why it is not a good idea. Rather than you taking all of the heat, you can fall back on doing what is responsible and right based on expert legal advice. I've been an executor in a couple of estates and I appreciate the sensitive position you are in. Good luck and go with what you feel is right and based on good legal advice.
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Old 07-20-2009, 11:55 AM
 
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More thoughts ...

If the estate is financing the house, I'm going to assume the estate will have to remain open until the the house is paid in full.

And if the nephew defaults on his loan - the estate will have to foreclose. Are you prepared for the fallout from that situation?

If you're still considering this, I'd tell the nephew to retain his own attorney and present the estate's attorney with an offer to purchase. If he can't/won't ... well, you're off the hook.
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Old 07-20-2009, 12:38 PM
 
Location: NW. MO.
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Pressure those who are pressuring you into selling to him, to go cosign for a loan for him to pay off the estate. If they think he's a good risk, they can show it right there.

Oh and ps I rented to a cousin once and it was ugly.
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Old 07-20-2009, 01:33 PM
 
802 posts, read 2,007,234 times
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believe me, I'ave thought about all of this. The forclosure was due to him losing his job and his wife kicking him out and not paying the mortgage. He's working again and getting back on his feet, but do any of us know our jobs are safe. No. He would share in the proceeds from a sale, but wants to have a "home" with room for his kids if he can work out visitation. It's VERY DOUBTFUL that he'll ever get that.


I really don't want to do this, as I've said, family pressure. It got ugly this weekend over this and I've kinda resigned myself to it. Unfortunately, the other family member has no income or way to assist him either. I wanted to sell outright so we'd all have a little $$$ and go our merry ways, but they all exploded on me. As I said it was U G L Y.

I have an estate attorney and will contact her to see what she says.

I gather from what you all said, talk to the estate attorney, see if she can come up with some way not to do this and get me out of this predicament is the best advice.

any other advice that will bolster my side is appreciated!!
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Old 07-20-2009, 01:55 PM
 
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Is this only a "3 way split" or are others involved? While the other two may feel that "two are more than one" if you are executor it does not matter if there are 30 in favor and the executor is opposed -- executor wins.

I guess there might be a question as to what were the wishes of the deceased -- for everybody to a slice of the benefits or one person to make out great and other to get left holding a bag that could be very empty if "default boy" goes down the path he did before...
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Old 07-20-2009, 02:49 PM
 
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No advice, but I'm sorry you're going through this. Families can be brutal with this kind of thing. As far as I'm concerned, if you can't pay up, shut up. If your sibling wants nephew in the house so badly, they can find a way to make it happen. It's not your problem.

I'm probably just bitter because my little family is still suffering from my husband's generously "helping" his lying, conniving mother to refinance her mortgage back when he was just a babe of 23. Guess who's paying that mortgage now, as well as the one on a home for his own wife and child? Yep.

If something offers you nothing in the way of gain and everything in the way of sacrifice, I say forget it.
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Old 07-20-2009, 03:17 PM
 
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Quote:
Originally Posted by littlelou View Post
believe me, I'ave thought about all of this. The forclosure was due to him losing his job and his wife kicking him out and not paying the mortgage. He's working again and getting back on his feet, but do any of us know our jobs are safe. No. He would share in the proceeds from a sale, but wants to have a "home" with room for his kids if he can work out visitation. It's VERY DOUBTFUL that he'll ever get that.


I really don't want to do this, as I've said, family pressure. It got ugly this weekend over this and I've kinda resigned myself to it. Unfortunately, the other family member has no income or way to assist him either. I wanted to sell outright so we'd all have a little $$$ and go our merry ways, but they all exploded on me. As I said it was U G L Y.

I have an estate attorney and will contact her to see what she says.

I gather from what you all said, talk to the estate attorney, see if she can come up with some way not to do this and get me out of this predicament is the best advice.

any other advice that will bolster my side is appreciated!!
He wants a house? Well, I want a Jaguar. It's my want - but I don't except anyone else to suffer for my want except me.

Believe me when I say, and I speak from loads of experience with death, estates & greedy family members with their hands out, that nothing good will come from this. If it's gotten ugly already ... well, you haven't even scratched the surface on how ugly it's going to get.

It's not that your nephew can't have the house - he just needs to purchase the house. I'm reading that it's a 3 way split - you, other family member and the nephew? Have the estate pay for the house to be appraised (if you haven't already - we always had all property appraised for tax purposes) and then the nephew can just buy the two of you out ... or just you if the family member has such a big heart and wants the nephew to have the house so badly.

What a deal the nephew gets - either a house for 2/3's of the appraised value or 1/3 of the appraised value.
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