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?

Be nice to her, but don't apologise.

She knows what your DH does to earn a living. She took advantage of that when it suited her. The reality of what he did is now hitting here and she won't ever see the effort, experience, investment and overall risk your DH takes with each development. She, like so many others do, will it see the pound signs associated with the end result.

As I say, be nice. But don't apologise for feel at all guilty about it.

Agree that there was an additional premium and value in the property to you as a developer buying her home. Normally, profits spilt one third developer, one third land owner, one third contractor. She is owed a third of the profits so far as I can see OP. You have fleeced your sister when she has been lowest in her life. And I reckon you and your husband knew exactly what to do to exploit her misfortune. Maybe it’s ok for you to profit on your blood family’s misery. I wouldn’t be comfortable with that.

@SurferRona

Agree that there was an additional premium and value in the property to you as a developer buying her home. Normally, profits spilt one third developer, one third land owner, one third contractor. She is owed a third of the profits so far as I can see OP. You have fleeced your sister when she has been lowest in her life. And I reckon you and your husband knew exactly what to do to exploit her misfortune. Maybe it’s ok for you to profit on your blood family’s misery. I wouldn’t be comfortable with that.

That’s unkind and simply not true.

@notdawn

I’m going to speak with her today.

I think it would be unwise. Perhaps it would be better to wait until SHE brings it up again and politely put her right. She got what she wanted and a bit more, saved XX pounds in fees and isn't entitled to a stake in your profits which are expected to be less than half what she keeps saying.

To approach her to address the issue unprompted may make her defensive and feel attacked.

@SurferRona

Agree that there was an additional premium and value in the property to you as a developer buying her home. Normally, profits spilt one third developer, one third land owner, one third contractor. She is owed a third of the profits so far as I can see OP. You have fleeced your sister when she has been lowest in her life. And I reckon you and your husband knew exactly what to do to exploit her misfortune. Maybe it’s ok for you to profit on your blood family’s misery. I wouldn’t be comfortable with that.

OPs sister is none of those things. She sold the property so has no claim on it whatsoever.

@SurferRona
Congratulations, you’ve won MN today for the most amount of dross crammed in a single post

“my husband made it clear that if they ever wanted to sell to give us first refusal. We own the house next door” This muddles things a bit. On what basis did he have the right to ‘make it clear’ he needed right of first refusal? Think of it this way: the fact he has a property next door and is a developer means his interest is financial. It also means that he knows exactly what things are worth and for him the cost price clearly was a good deal. Because think of it this way: if I had a house and a property developer who owns next door came knocking, that fact alone would make me increase the price because the added value of him owning two adjacent properties would give a better negotiating position versus a random third party buyer who could also buy 4 streets down. So he got a deal. From a family member in distressing circumstances. I can see where she is coming from to be honest. He is now pretending it was similar to him having bought on the open market but it really wasn’t.

@Plussizejumpsuit

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.

Autocorrect often changes bought to brought. That's why people keep saying it on here but no one does in real life. Unlikely to be a human mistake, just a phone one.

People saying that they should have given her extra as a gesture of what they were going to make from it - they already did (and also saved her EA fees into the bargain). She also had the security of not being messed around/gazundered by strangers buying it and, I presume, she also had a lot more time to prepare, move out, move her possessions, come to terms with leaving her old home.

I also don't see how the value is affected by how valuable it can be to one purchaser over another. If one purchaser wanted it because it was 100 yards from their workplace whereas another had just looked for and found the most suitable house they could afford within a 50-mile radius of where they worked - that doesn't objectively increase the intrinsic value of the house if the first person buys it and therefore justify a discount being due to the second person. The same high-end camcorder could be bought by one person who uses it to make successful films which earn big at the box office or an old couple who just want to make a few home movies of their grandchildren - it doesn't mean that Sony can charge the first person a much higher price for it.

Also, I don't see it as profiting from their divorce. The divorce was a completely independent event and had already happened. That left them with a house they had to sell to somebody. You may as well say that people are cynically profiting from their parents' sad deaths when they inherit their money - money that they could no longer keep for themselves and which had to go to somebody.

Autocorrect often changes bought to brought. That's why people keep saying it on here but no one does in real life. Unlikely to be a human mistake, just a phone one.

I know it's a separate issue from the main one and I wouldn't personally pull somebody up for it, but I've heard loads of people say "Look what I just brought from the shop" - it's a common mistake akin to 'should of done this'. Autocorrect often changes bought to brought. That's why people keep saying it on here but no one does in real life. Unlikely to be a human mistake, just a phone one. Very randomly, a now-disgraced Australian artist did a novelty version of 'Stairway To Heaven' in the 90s and even he bizarrely and very tenuously alluded to this common source of linguistic confusion.

Sorry, not sure how the quote got repeated within my comment there!

@SurferRona

You are getting confused as well.

While it’s not uncommon to cut a land owner in on profits that’s with details pre drawn up. You certainly would never pay above asking for a property or land and then cut the owner in. I’ve never heard of that once in 14 years in the business.

I agree with PP that the money is a red herring. You arent being UR but its a bit of a crap situation for her

You certainly would never pay above asking for a property or land and then cut the owner in. I’ve never heard of that once in 14 years in the business.

Property development schemes, like any other business plan, don't always pay off and can, on occasion, turn a massive loss. Nobody would dream of going back to the original seller and expecting that they bear a percentage of the loss you made when your large-capital-outlay plans for developing the property/land you bought from them didn't pay off.

@cochineal7

“my husband made it clear that if they ever wanted to sell to give us first refusal. We own the house next door” This muddles things a bit. On what basis did he have the right to ‘make it clear’ he needed right of first refusal? Think of it this way: the fact he has a property next door and is a developer means his interest is financial. It also means that he knows exactly what things are worth and for him the cost price clearly was a good deal. Because think of it this way: if I had a house and a property developer who owns next door came knocking, that fact alone would make me increase the price because the added value of him owning two adjacent properties would give a better negotiating position versus a random third party buyer who could also buy 4 streets down. So he got a deal. From a family member in distressing circumstances. I can see where she is coming from to be honest. He is now pretending it was similar to him having bought on the open market but it really wasn’t.

Nothing stopped the sister from asking for more money. Or putting it on the market and gamble that way. Or try to keep the house.

She made her choice 3 years ago. She was happy with the offer ,and if she wasn't she should've said something back then. Too late to have second thoughts or grumble now.

I’m meeting her at 3 - wish me luck!

Be firm OP. You can do this. Your DH is right.
You DO NOT owe her anything.
She got more than she would've done selling to anyone else, the point is simple.
She got paid well.That is the end.

Don't apologize for your life choices or hers.
If you feel the need then tell her that you love her and will support her emotionally all you can BUT there is no more money.
I'm sure you won't say this but she is a CF and she is taking the piss. Don't let her draw you into this
Good luck OP. 🍷💐

Nothing stopped the sister from asking for more money. Or putting it on the market and gamble that way. Or try to keep the house.

She would probably have felt like a cow if she'd refused OP's offer. Would anyone in the family have thought badly of her if she had, especially with the high offer? It's entirely possible.

It may not have been a completely free choice.

Would she have wanted to share the loss, if the development plan had not worked out? Or still doesn't, if the flats don't sell?

Just tell her -

• look this has gone on long enough, I need to tell you how it really is, and then we can put it to bed:
• she didn’t have to prepare for house viewings
• no stress of a chain of buyers and the ups and downs of that
• you made the sale easy for her (acknowledge that the situation is stressful for her as well)
• you have had to deal with the legal issues
• you have had to deal with the planning authority
• dealing with raising finance, organising contractors, materials, budgets and risk with the project
• you have had to shoulder the worry and sleepless nights through it all...

I think acknowledge that she didn’t want to leave her family home and she will be sad and stressed, but don’t waver on giving her a “donation” - is what I would do

I really don't see where some PPs are interpreting 'made it clear that we would like first refusal' equates to him forcing or blackmailing her into doing so.

Apart from anything else, 'first refusal' in a transaction like this usually carries the implication that you will match the best offer from anybody else, but you are asking for the chance for you to buy it for the best price in preference to an unknown person offering the same price. If they offer more than you're willing to pay, that's effectively tantamount to your having literally used your first refusal to refuse the deal and step away.

I really don't see where some PPs are interpreting 'made it clear that we would like first refusal' equates to him forcing or blackmailing her into doing so.

If your sister asks you to do something, there's a bit more pressure and expectation than if a total stranger did the same. She would have caused some kind of reaction if she'd refused.

It’s abit of a low blow for your sister. The fact is that you HAVE profited from the breakdown of her marriage. That is a fact and she is entitled to feel however she likes about that. Your husband “made it clear” he was to have first refusal and now “you are making clear” that her feelings are unreasonable. It’s patronising and cold hearted.

I think some people are really confused on what “first refusal” means.

Good lick OP. Stick to your guns.