What is a fair price in this scenario?

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Two brothers have inherited their mother’s house. One wants to buy the other out to keep the property as an investment.

House has been valued at £85-90k. Or could achieve £95k if a bit of smartening up is done. The work to do this would cost about £1500.

Estate agent and solicitors fees to sell on would be about £2k (if house was sold to someone else)

What sale price do you think would be fair to both brothers? Interested to know what impartial people think.

You can’t sell much under market value. I think £85K would be fair.

£88-90k.

£45k - brother1 who keeps the property will reap the rewards of the value in the future, brother2 who sells gets a lump sum.
Any less than 50% split could cause resentment in the future if brother1 makes a vast amount of equity from the sale in the future. Any more, and that's just plain unfair.

going by your numbers.
not knowing the area, type of house, or current state of the house or what the houses currently are selling at and that the place is mortgage free.

£87k
its not worth 95 and I doubt the brother that wants to sell will put anything towards improvements.

£3k for knock down of price, 2k for solicitors 42.5k each.

90k.

One brother gets the slightly higher end of the profits from the valuations ie: half of 90k not 85k.

The other brother has the opportunity to do it up at a small price and get the potential opportunity to make a small profit.

Personally I would never do this. Breeds contentment.. house prices go up or down etc.

In this position we would do up the house and pay half each... then sell and take half each. The brother wanting an investment opportunity can they buy another property.

I must be confused - there won't be estate agents fees etc as private sale between the brothers? So it won't be sold full market value, just the proportion that belongs to Brother2?

Agree though it’s a recipe for a falling out.

£43,750 if selling bro to bro.

I had the same scenario with my sister.

The house isn't in an area were there is much property growth.

So we got a valuation and took off the costs needed for selling. That included removing rubbish etc.

Should have said it was me who bought her out.

There shouldn't be resentment because unless it's in a very desirable area, it could be March before there's any interest in the house.

I should clarify: £85K sale price, £42.5K paid to brother to own outright.

If I were buying it from my brother, I’d offer to pay the solicitor fees too, to recognise that I was getting a good deal.

If both brothers are inheriting then surely one brother pays the other one half as he already owns half.

Whatever it’s worth now of course before it’s done up so. If it’s valued now at 85-
90 then half of that or 45k at the most.

Vienetta I mentioned the estate agent and solicitors fees as these would apply if sold to a third party but not if sold brother to brother. Just in case anyone factored them in to their figures.

Jefferson it’s in a very poor area with very limited scope for growth. No mortgage outstanding.

Other brother is thinking of taking his share and investing/buying a rental property in different area

Bath9000 yes, one brother will pay the other half but it’s working out what that half should be. What the starting point is and what costs should be factored in when reaching an actual final figure

The brother purchasing will have solicitors fees as there is a mortgage but there shouldn’t be any solicitors fees for the estate to incur as it’s not necessary as being sold brother to brother

Half of whatever it is worth in its current state. That is the only fair option I can see - OP what other options have been suggested by either brother? My DH and his sibling initially bought our house, and we had 4 estate agents round for valuations, they agreed on the median valuation and we paid them half of the amount of the equity of the house. But in the scenario you describe the house doesn't still have a mortgage right?

Kintan but is the house worth £85k or £90k?

The brother buying has offered £40k, the brother selling thinks £44k

If it's valued between 85-90k I'd spilt the difference and settle on 87500. I wouldn't factor in estate agent fees as thats not applicable.

Fair is fair but the most important thing to me would be to ensure it wouldn't damage my relationship with my sibling. Especially for the sake of a grand or two.

I think if it were my family we'd take the middle of the estimate (87.5k) and halve that.

The fact is that unless you put it on the market and wait for offers, you won't know for sure what it's worth, so (as long as you haven't got reason to doubt the valuation) the middle of the range seems fair.

You can't know what the house is worth exactly without testing the market. So split the difference st £87,500.

If one brother thinks £40k and the other thinks £44k, surely they should just agree to split the difference at £42k?

Take the average of the valuations, and then split in half.

Other points to consider are crockery, cutlery, pots pans furniture etc - as well as costs getting junk cleared.

I took the opinion that it was absolutely not worth falling out about, so I took a few bits but otherwise we agreed roughly through the valuations needed for the probate form and split it on a taking turns on what we actually wanted.

If your in an area where property value goes up and down , make it clear you're always going to use the point of death valuation otherwise things get complicated and it takes time to renegotiate mortgage deals etc.

I think the brother selling should meet the brother buying in the middle then. I hope they wouldn't let a differing opinion of £2.5k come between them!