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?

She sold. You paid asking price. What you make or not make from this project has nothing to do with her now.

This post is too outing to be real.

@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.

Anything you say is pointless OP since some posters are determined to paint your sister as the victim of your unscrupulous,money grabbing ways.

First they "presumed" she was forced to sell to you, then that you bought the house next door and playing to long game of waiting to buy from her. Next someone will show up and say you destroyed her marriage on purpose so you would get the house.

She knew what she was doing. I bet she didn't hesitate when you offered extra or saved her money on agency and selling fees. She could've said no or pull out at any time. She made her choice , she needs to live with it.

YANBU. If they wanted to make money out of a house they used to own, they should have got their agents to insert a clause entitling them to a percentage of future development value. But then you would have paid less to take that into account.

Pay them nothing more, or they will never give up.

Some people try to ride on the backs of others who do the hard work and take the risks.

@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.

I think it’s telling that you’re talking about this entirely in terms of money—as i said before, I don’t think you did anything wrong but you and your sister are having different conversations!

It is not about the money, if she were asking you for a chunk of it she would be unreasonable. She is looking for some empathy from you, and i suspect from your posts that she is not getting it from you.

How much have you discussed this with your sister, talked about her marriage, taken interest in how she is doing and worked to prove how much you care about her? You said she’s doing fine and not in a bad place, but again painted it entirely in terms of finances—how is she doing emotionally? How is she coping with being alone?

@IncandescentSilver

YANBU. If they wanted to make money out of a house they used to own, they should have got their agents to insert a clause entitling them to a percentage of future development value. But then you would have paid less to take that into account.

Pay them nothing more, or they will never give up.

Some people try to ride on the backs of others who do the hard work and take the risks.

I think it’s really unfair to paint the sister as money grubbing here—there’s no evidence she actually wants a penny from OP. She clealry however has resentment/unresolved pain abiyt her divorce and their relationship, and I suspect the house may be almost like a symbol to her of how different their circumstances are—not just financially, but in terms of their spouses and where they are in life.

It doesn’t sound like OP has been the most empathetic here—obviously the sister should be more upfront and less passive aggressive, but it really doesn’t sound like it’s actually a money thing.

Yanbu and don't owe your sister anything, but as pps have said, it isn't hard to see how she would now feel resentful about you profiting from her sale even if you did nothing wrong and she agreed to it. It's the 'ick' factor where something is wrong and you can't articulate what. If you want her off your back, I suggest sharing what you will actually make and get rid of her fantasies about double.

As you will see from my previous post, I don’t think you have been unreasonable but family/friends and business is not a good mix.

But you paid asking price that surely was the price determined by at least two estate agents. Therefore, you are getting all into the money and emotive side of it by saying you paid circa 100k over the value.
If the house was £1 million and previously you said you paid 6-7% over (though as stated surely determined from EA pricing) then that is £60k not £120k.

As always everything comes down to money in business terms. But I do think you are now being a bit ingenious in trying to now say you paid over the odds because surely you didn’t. You paid market value for a property. You stand to make a profit. That’s what a business is about making money and not a loss or a break even! The problem is all arising out of family ties and emotions. This is a business transaction and needs to be treated as such. But it gets muddled and even you are now muddying the waters by now saying you paid over market value.

Do you see my point? You wouldn’t even be entertaining any of this conversation if the transaction had been with a third party.

You need to step back, take the emotion out and lay this to rest. It’s just going to escalate if you don’t.

I think if it had been my sister I would have offered her the opportunity to develop the properties as a joint venture.

Whilst you haven’t done anything wrong, you are profiting from her misfortune so I can kind of see why she’s not entirely happy.

She probably knows full well that she saved money selling to you, but you will still be making a hefty profit even though it may not be as much as she thinks.

If the house was £1 million and previously you said you paid 6-7% over (though as stated surely determined from EA pricing) then that is £60k not £120k.

OP said 'well in excess of £1m'. Giving a more exact value would make it much easier for people to dig and find where it was likely to be, and then the name of their company. We don't need to know the exact amount: OP was just making it clear that we're talking a very large amount of money - and thus both a massive extra bonus for the sister and also a lot of money for them to be risking if the project didn't pay off and/or the market crashed.

Whether or not it's the sister's intention here, there are indeed plenty of folk who genuinely think that people's time, labour, materials and overheads cost/are worth nothing at all (except their own, of course). They also massively struggle to understand the difference between overall turnover and net profit.

It's not uncommon for people to expect a tradesman friend/family member to work (and therefore turn down all other jobs) unpaid for a week or two in their house - and then genuinely believe they did him a huge favour by 'agreeing' to pay him back for the cost of the materials and thus 'making it well worth his while'!

BOUGHT

phew, I feel better.

She's upset that you'll benefit from her divorce I bet. I think the way she feels is completely understandable but her making you feel bad about it isn't. It probably wasn't wise to mix family relationships with money/profit but its done now. I'd just have a word with her, ask her to stop mentioning it. Anyone could have bought the property and she was happy taking the money!

Your sister is being unreasonable, your husband has brought the house at the price she has asked for, it is yours to do as you wish, if you did nothing to it and sold it 3 years later for a profit would she still be going on about how much you have made? You brought the house, took the risk and it has paid off, nothing to do with her she has not sold it to you at a discount or anything, if you brought it off someone else, you wouldn't have them knocking at your door if you developed it and made a profit, your sister is no different.

OP it is bought not brought. They mean different things. I wouldn't normally point this out. But as this word must come up a lot in your property development work I wanted to let you know.

You sound quite cold towards your sister, despite claiming to be close. You also sound a little bit glad you're in a better position than her. You should never have mixed money and family. But you obviously knew you'd make money so couldn't pass up the opportunity. It's going to cause resentment. You need to offer your sister something it sounds liek you can afford it. Perhaps talk through he costs with her so she understands profit vs costs.

Actually YABU, because no other buyer paying the market value except you would’ve been able to redevelop the site into flats, due to you owning the other property, so that price set would not have been reflective of its development potential. Which clearly is not only an extra 5%!

So actually you getting the house at market value was a much better deal for you than it would’ve been for anyone else- and this is why PP are right in saying you did profit from your sister’s marriage breakdown.

Not because you made money from the flats, but because the price you paid for her house was too low bearing in mind it’s unique value to you alone- so you made additional profit that way.

It's clear she's jealous but is not fair for her to expect anything out of it. Had it been sold to any other builder, they would have done the same n would she expect a piece off that profit... No then why this.

*BOUGHT

phew, I feel better*

Thank god someone said this. I can sleep easy now

If this scenario is real then in my opinion no, there was nothing wrong with buying the house for the asking price your sister wanted. If you still make money on the development, well that’s the point of being a property developer isn’t it? And no, I wouldn’t reward your sister’s bitterness with any extra money.

@ShopoholicIn no actually no other property developer could have done this as OP already owned the other house on the site.
So the ‘market value’ price was actually too cheap, as it did not reflect the profit that could be made by OP.
If it was a random vendor I’d say well done getting a good deal. But it was your sister OP, whose life was imploding.

Why didn’t she ask for an overage clause?

Instead of focusing on the money / houses / profit etc, why haven't you directly asked her why she keeps bringing this up?

It may be that she's bitter about having to sell or that you're treating her divorce like a business opportunity, it may be plain old sibling rivalry / jealousy or it could be something else - you're never going to know if you don't ask.

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
All this.
She's not jealous or money grabbing, she's hurting. The entire situation feels gross.

I’d tell her how much you’ve made, no it’s not her business but does it really matter...

She got the price she wanted. You made money from putting in time/effort etc. Unless she expects to share the profits of her time/effort (in whatever way she makes a living) with you then I think she's being unreasonable to expect anything from this.

However, feeling aren't logical and people do get really weird about things like this. I can see why it's too close to home and personally I'd keep business/family more seperate in the future. And maybe try to talk to your sister - see if you can find out what's bothering her?

Your sister sounds at worse, jealous and nasty, and at best, a bit dim.

She's not jealous or money grabbing, she's hurting

But surely she she have the common sense to realise she’s no worse off than if some random buyer bought the house? In fact she’s more than likely better off..... less fees to pay, might not have not the full price from someone else.

Even if she is upset it seems quite childish to keep bringing this up and risk her relationship with her sister and in-laws. As someone pointed out, if the OP and her DH make a loss on their development l, would she be happy to take a share of that?