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?

Why does everything have to be down to jealousy on here? The OP has done very well financially out of her own sisters misery. Why is it so hard to see that. How would any of you feel about it, if you were in the sisters shoes? Your marriage gone, your home gone, knocked down and turned into flats by your own sister who's making a load of money out of it?

@19lottie82

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?

You are seeing this is entirely financial terms. The points many of the more empathetic posters are making is that the sister is hurting not because of finances but because of her marriage breakdown, being alone and having to leave her family home, all while seeing her sister having a fab time of it.

She has a totally understandable “ick” feeling—my sister is profiting from my divorce, she and her sub and will be going on a lovely family holiday while I sit at home alone, thanks to the breakdown of my marriage. The situation is a bit screwed up, and the OP would be better to engage with her sister on the actual issue—which is not the finances of the deal.

From the way I've read this, you bought the house a couple of years before her divorce - they were selling because her DH wanted a job abroad/out of area, so completely ignore the idea that you've profited from her divorce.

If the house had gone on the open market, you'd still have bought it - yes? Maybe you'd have had to pay a bit more, maybe you'd have got it cheaper. They'd have paid a huge chunk of money in estate agent fees.

Your sister and her DH wanted you to buy it for a quick and hassle free sale.

You've done absolutely nothing wrong and need to find a way to shut down any further conversation or snide digs from your sister going forward.

I'm with your DH - you don't owe her a penny.

I'd confront her - it can be done in a nice way. The next time she says something I'd call her out on it "Yes, we will make some money on it - it's what we do for a living, but we paid the full asking price to you. Do you wish you hadn't sold to us or is it something else?

No way should she be given any additional money your DH is right.

*you'd have bought the house a coupe of years before

Seems to me that the OP leveraged their relationship to benefit from a first look arrangement over the purchase of the property without ever paying for it (that arrangement should normally come at a price as it put them at an enormous advantage over every other potential purchaser).

They then talk about paying what the house was worth, but this wasn’t tested on the market (what if someone else desperately wanted it and would have entered a bidding war if given the chance?)

The OP is also conveniently ignoring the fact that the value of the property to them as developers (able to combine with the existing plot next door) was likely considerably more than the value to someone who would have bought the house to live in rather than as a business opportunity.

If the sister was well advised she would have recognised that potential value and driven a harder bargain - I expect the OP would have paid more for it if they’d absolutely had to.

The problem is though when you deal with family you feel less comfortable driving a tough negotiation like that, which is why it is so often a mistake to mix business with family.

I think the OP happily took advantage of that and is now wilfully ignoring the fact that her sister is feeling a little bit used (and emotionally unsupported).

@LiveFromHome no they had considered selling a few years before as they were considering moving for work—but they decided to stay. Then a few years later got divorced and had to split assists, which is when they OP purchased the house.

If your husband had a different job - would you be considering giving your sister a on of his salary because she got divorced?

Which is I think where the emotions come in—OP’s sister would have very different feelings if she’s sold a house to move with husband vs due to divorce.

The house absolutely wouldn’t have gone for more on the open market. Financially my sister is anywhere from 100-160 up by selling to us.

Yes of course wanted it - but I genuinely thought when we purchased it that everybody would win.

I understand you haven't done anything wrong but this situation would have been handled differently in my family.
I have 2 sisters and whichever one of us had been in your position would have made sure the other had benefited from the development too.
You're reaping the rewards of your sister's life having been turned upside down.
It's family. It's not worth souring a good relationship with your sister over money. You say you're close yet you're discussing her on a public forum. Talk to HER.

OP - you seem to be simultaneously maintaining that you paid the estate agent’s valuation but that you also overpaid, which is it?

Did the estate agent value the property assuming a residential sale at market rates, or did they value it knowing that you were going to knock it down and combine with the plot next door?

That would have had a significant impact on the valuation.

Did the estate agent value the property assuming a residential sale at market rates, or did they value it knowing that you were going to knock it down and combine with the plot next door?

@Bluegrass I’m no property mogul but why is that relevant? You buy the property and surely what you do with it is your business (subject to council planning / law etc).

Also, OP says she lived in the house 12 or 13 years ago, so she surely has some attachment to the house too?

It was valued slightly top heavy - probably 75 k more then add to that we paid asking.

One exactly the same size at the moment is on the market for 200k less than we paid 17 months ago.

It’s not in question she got a good deal.

@notdawn sounds like you were had in a way, OP?

We were generous - but we wanted to be.

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

Hmmmm. I can see both sides on this.

You took the risk, and the costs of re-development. But presumably you did this in anticipation of a good profit (if you're experienced & successful developers).

You wanted this specific property, as it had advantages in terms of combining sites etc etc etc.

Had a really canny business person known this, they could have (should have) driven up the price - to profit from your driving for a profit after re-development.

So - your sister probably should have required a premium, for the desirability of her property for your future plans.

I can see why she'd resent you making a profit, beyond the normal capital gains one might expect (but not count on) from a house sale.

Did she know about your plans for re-development? Did she know that her property had unique advantages to you, which were not to be found in any other property?

Yes she knew exactly why we wanted the property - it’s been clean for years and only 3 years ago she was pushing us to buy it.

Next time she brings it up, ask her straight out if it's the money that's bothering her or if it's something else and she's fixated on the money as a distraction from what's really bothering her.

If it's the money, then she's a twat, and I would absolutely point out how much extra you paid and how much less stress she had due to not having to market it etc.

Just toughen up and ignore her , if she thinks property development is such an easy way to make money suggest she does it herself

@stackemhigh - if you know someone wants to buy your property to unlock development potential it completely changes the economics behind the negotiation. The two plots combined are worth more than the sum of them being sold individually so as a seller if you don’t grab some of that increased value yourself by driving a harder bargain with the developer you are being taken for a ride.

It's one of those cases whereby you haven't, strictly speaking, done anything wrong and yes she complied, but it's really not hard to see why she's upset. You're effectively profiting from her divorce. She may not be badly off financially but divorce is devastating and I can understand why it's hard to watch your sister and BIL making money from it indirectly. More so than if you'd just sold to a stranger.

I think it was naive of everyone not to foresee this.

Reading back I’m probably coming across as heartless. We really do have a great relationship, see each other 3 times a week, holiday together etc - it’s the first time in 30 something years we have ever been like this.

Perhaps I was naive - but she has always know we wanted the house and she’s always wanted to sell to us. Granted not under these conditions - but it’s where we found ourselves.

Her and her ex got 150k more than they would of anywhere else, we got the house we wanted, naively I thought everybody was winning.

if you know someone wants to buy your property to unlock development potential it completely changes the economics behind the negotiation

Yup @Bluegrass - you've put it more succinctly.

Be careful OP - I've seen a family close to me really divided in this way.

It's a situation where there is strength & reason in both points of view.