Family and money - help!

[notdawn]

I will try and keep this as brief as possible - but really would like some candid advice.

Towards the end of last year my sister and her now ex husband wanted to put their house on the market. Before they did my husband offered them full asking of the agents valuation. In all honesty he probably slightly overpaid.

My husband is a property developer and even when they were together my husband made it clear that if they ever wanted to sell to give us first refusal. We own the house next door (we don't live there) and with the land there was always going be a fairly decent opportunity to develop.

Anyway as it was going through my sister started making comments about how much money we would be making from the deal. The truth is she had and has no idea how much money we will or wont make as she has no idea about building costs, planning costs, marketing costs etc - and I just put it down to her going through a divorce.

Anyway the build was on hold for a couple of months - but the flats where our houses once were will be going on the market Monday and she has been quite vocal about how much money we will make and how we couldn't have done it without her.

AIBU - I mean she wanted to sell her house and we gave her asking price?

We are very close, our kids are close, I am not sure why she is being like this. I suggested to my husband possibly a smallish payment once they are sold - but he is saying absolutely no way.

Thoughts?

[Porridgeoat]

Put her right. When she says oh you’ll be making x amount laugh and say if only, it’s more like x amount. And point out it was well earned by your DH who has bust a gut and it was a massive price of work to take on

[itsovernowthen]

@Fatted

You're not being unreasonable in any way.

But I don't think it's about the house. It's about her divorce. You, her sibling, have financially profited as a result of her divorce, which is a bit pants. Also, the house has been demolished I presume. So her previous married/family life has been reduced to a pile of rubble. All while you and your DH are still happily married and doing very nicely out of it all.

It sounds to me like she is hurting about the divorce, mourning the married life she has lost and is bitter about you and your DH being ok. The money is a red herring.

I agree 100% with this.

Cut your sister some slack OP, she's just been through a divorce, and is sitting by watching you and your DH (presumably looking very happy to her) sitting on a decent return on your investment, thanks to her life going pear-shaped.

I'd probably say I wish and do tinkly laugh, then change the subject to something more comfortable for both of you if she mentions it again.

[Teapot13]

The fact of the matter is that you bore the risk of the venture, so you get the profit. If she wanted to get a cut she needed to fund part of the investment.

[Porridgeoat]

Also point out that it was a big risk due to brexit and Covid

[Girlyracer]

She does realise this is your job and you need to make money?

[itsovernowthen]

@notdawn

I am going to ask what she wants I think.

It's best not to start that conversation OP, as unless you are planning to give her exactly what she says she wants, it is not going to go well.

[grenlei]

Hmm...feels a bit icky doesn't it.

How did you come to own houses next door to each other? Presumably she bought hers first, so basically you were waiting for her to sell all along (knowing that she would at some point) to enable you to make a nice 6 or maybe 7 figure profit.

I think in your position I would never have bought the next door house. Feels a bit like you've played the long game all along. Obviously you've paid over the odds for the house apparently, but it was actually worth more to you than the average buyer so that's only fair.

I think leaving aside the financial aspect, I'd find it quite hard to see a house I'd lived happily in and raised children in demolished and replaced by flats.

[Snog]

It feels to me like you need to be technically in the clear from your actions and I think the consensus view is that you are. A sister relationship is about more than technical or financial rights and wrongs though. It sounds like perhaps you don't like her much - could there be some rivalry or envy going in both directions?

[TheTeenageYears]

If you paid full market value and possibly a bit over she has profited from the situation already. She had a hassle free sale which let's face it does have a price tag attached - generally a hassle free sale is something like a part exchange and you never get full market value. She has been aware for the last 3 years that you would be very likely to buy the house so again that has given her some peace of mind over the time. There were also presumably no estate agents fees involved which means she has saved a fortune. I don't think you need to be specific about figures but you should sit her down and explain the above and that the maths she is using in her comments that you are making a fortune are not correct. You have taken all the financial risk, if the bottom had fallen out of the market in the meantime and you had lost money on the project would she be putting her hand in her pocket now? I suspect not.

[WeBuiltThisBuffetOnSausageRoll]

You paid the asking price so she got the maximum that was available.

She got more than the maximum: an extra 6-7% over the asking price, so £60-£70K, assuming that a hitherto unknown buyer didn't do what almost everybody does when buying a house and offer well below AP.

She also saved on estate agent fees, so that could have been another £10-20K. Not to mention the hassle and stress of doing it up for sale, viewings etc.

She also had the security that her buyers were not going to pull out of the deal (either through choice or their chain falling through) or gazunder her at the last minute.

Realistically, it sounds like she got at least £100K more than she would have done if she'd sold it to a stranger. Also, unlike the sad story about the brothers and the horse upthread, you never tried to guilt her into selling by spinning her lies about how much you desperately wanted to live there and how much it would mean to you and your children sentimentally - she knew that you wanted it in order to redevelop the land and gain financially from your work on the overall project as part of your regular business.

If you ran a shop selling hand-made items, you wouldn't expect the people who made and sold their creations to you to be shocked on discovering you selling their products for more than you paid them for them.

If you'd swooped in, gaslighted her about the true value and strong-armed her into selling to you at way under its current value - and then put it on the market as it was the very next day and sold it for more, she'd have every right to be upset. But that is absolutely not what you did in any way at all - you took a lot of calculated risks and invested a lot of your money, time and energies into adding value to your property, before then selling and reaping your dividend and reward for your investments.

[user1493494961]

No, I wouldn't give her any more money, if she thinks you're making thousands she probably wouldn't be happy with a small sum anyway. Just ignore.

[Irisheyesrsmiling]

I think she's probably feeling the difference in your lives - your marriage, development, more money and she's struggling with what the change in circumstance has meant for her. Give her credit, this stuff is hard.

If it were me I'd point out the costs and then I'd give her a small % of my profit and say I know things are harder with being on her own now and wanted to just say how much I appreciate her house sale helped us do this and want her to have a portion. I mean if you are selling flats you are likely hardly walking away with 3k profit. So I think I would try to give 5-10% of the profit to her. So if you made 100k after all costs, I'd give her 5-10k. I wouldn't rub her nose in what you made, but just say you wanted her to have this to put away to make things easier etc.

[Irisheyesrsmiling]

(And to be clear I don't think you are in the wrong but I do think you've profited after likely a very hard time for her so that extra little help for her is probably a really nice thing for family to do!)

[12309845653ghydrvj]

I wouldn’t give her any more money, and I suspect this isn’t what she actually wants. There’s a good chance she will be offended if you offer.

This is a classic example of why you should not mix business and family. Neither if you are being unreasonable really—it’s quite telling how all your solutions to the situation are based around transactional relationships, rather than being empathetic.

Emotionally, she feels that you profited from the failure of her marriage. That’s the basis of the issue. The amounts are not really important. If you had bought her house due to her and her husband moving, it would be a totally different emotional situation for her, and she would be wholly unreasonable to be chippy about it. But in this case, I can really see where she’s coming from emotionally—she is alone in a house that she doesn’t want to live in, in a worse place financially and emotionally, and she sees you in a better place than you were before BECAUSE of her failed marriage. That just sting, a lot.

If you want to solve this: I think you need to have a sit down and speak to her with empathy. I think she’s probably feeling a hell of a lot worse inside than you think—these chippy comments often disguise the fact that the person is hurt. She needs to know that you understand her pain, that you want to be there for her and that you are so so sorry about the situation. Offering her money is not the right thing to do—if I were her and this was how someone started the conversation with me, I would (a) call them a cold hearted, patronising bitch and (b) take space from having a relationship.

Again, just why you don’t mix business and family. To you it was a business transaction, for her it feels like she is watching her happier, richer, coupled up sister dancing on the grave of her marriage.

[Sally872]

You haven't done anything wrong and don't owe sister anything. She is finding it difficult to see you profit from her divorce.

Doesn't mean she is annoyed at you or expects anything from you just that it is hard.

[12309845653ghydrvj]

I think a nice way to end this conversation would be to say you would like to put a chunk of the profits towards an all-expenses Holliday for the 2 of you, give her a bit of love bombing! Just make her feel heard and loved

[Brefugee]

I don't think you're being necessarily U but are you talking to your sister like this?
She has just had a huge change to her life, is probably significantly worse off financially and now sees you (in her eyes) rolling in money at her expense.

Did you expect her to toast you or something?

[katy1213]

Another buyer could have beaten her down on the price, caused stress by dragging it out - and still made a profit by renting it out or redeveloping. You're putting in the work, carrying the risks - you don't owe her a penny.

[Iloveacurry]

Ignore her. She was selling the house and she got what she wanted for it.

[Whatthebloodyell]

In that situation I think some families might have done it differently, and treated her property as a share of the overall development and therefore allowed her to eventually benefit from a share of the profit. Much more complicated of course, but as
It turns out your way isn’t ‘uncomplicated’ after all.

[NoSquirrels]

Isn’t this just sorted by an honest chat?

DSis, I get the impression you’re upset by us having developed the flats - is that right? You keep mentioning we’ll make £X but that’s really not true, it cost a lot too. Are you upset we bought the house off you in the first place?

[friendlycat]

It’s a difficult one because as always where emotions are concerned there are often two sides to the actual story.

I don’t think you have been unreasonable at all, but I do think you have been naive in mixing business with family or it could have been a friend and then the same result. You have done a business transaction. But you’ve done it with a family member who you see, hear their ongoing comments etc etc. If the transaction had been done with a third party you might have heard perhaps a bit of future hearsay but that’s all.

It all gets messy and muddled with emotions when mixing business and family/friends. You are experiencing the very problems that can arise. Your husband’s business paid asking price fair and square. But then your sister can see the future profit that your husband’s business will have made out of her divorce. That’s what I mean by two sides of the story.

The only way to try and get closure is to have a frank conversation and correct her on her wildly ambitious thoughts on how much you will profit from the development and try and lay this to rest.

I have mixed business and friends twice and each time money is a huge issue with no happy outcome. I’ve certainly learnt my lesson and would never ever do it again. In fact I would go as far as saying “never a lender or borrower be”.

[baller20]

Ignore her Is that really the best thing to do? Gee, no wonder some families fall out.

[Littleposh]

Sadly I think it's a case of pure jealousy

[notdawn]

To the poster who said we brought the house next door to develop - that’s not true. The house next door was our family home where two of my kids were born and we owned it 5 years before her and her husband brought next door.

We paid circa 100-120k more than the house was worth and she would have saved 20k plus on agents fees - so she really hasn’t done badly.