Ways exist to sell mother's home, keep peace among siblings

MAILBAG

July 31, 2005

Q. I would like to ask you if you could provide some guidance on how to best sell a family home. The goal is to get my son and his wife into my mother's house at a reasonable cost and not cause family disharmony among my brothers.

The situation now is: My mother, who is elderly, is living in her home (no mortgage, she owns it). I live next door. She would like to sell her home to my son at a reasonable price because he and his wife are young and certainly cannot afford the asking prices of homes in the area (Howard County). My mother most likely will move into my home.

Her house is in need of quite a few repairs. My son and his wife would need to put a good bit of money into fixing it up. I have two brothers who would certainly have interest in getting their fair share of the selling price of the house (understandably so). I would like to ask if you could offer a clean, fair solution. A. Your mother owns the home. As long as she is mentally competent, it is her decision to sell the property to your son and to set the selling price.

If your mother wants to sell it for a "fair" price to avoid disharmony among her children, I suggest she get a written valuation from an independent real estate appraiser. An appraisal costs about $350. It will estimate the fair market value of the property, taking into consideration its size, location, existing features and deficiencies. The appraiser should be made aware of any major repairs that are necessary so an approximate adjustment can be made in the property value.

Suppose the appraised fair market value of the home is $300,000, but your son can afford to pay only $200,000. If your two brothers object to a bargain sale for $200,000, the difference of $100,000 might be adjusted by your mother's giving or leaving money or other property to her sons. If she does not have other assets, your mother could take back a mortgage or note from your son by which he would promise to pay your mother an additional $100,000 at a future date when the home could be refinanced to provide the funds. Your mother could provide in her will that this $100,000 debt will be distributed, in equal shares, to you and your brothers on her death. You could "forgive" a third, your share, so your son would only pay $66,667 to your two brothers.

These ideas are examples. Depending on your mother's financial situation and your brothers' attitudes, there might be other ways to accomplish your mother's desire to sell her home to your son and keep peace in the family.

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