To feel uncomfortable about family buying us out

[ShabbyChic999]

Would love to know what people think of this situation. My mother in law passed away recently - her house and other assets will pass jointly to my husband and his brother. My brother in law is saying he would like to buy out full ownership of the house. In theory this would be fine. However my brother in law is pretty strapped for cash so will be looking for the best deal - thinking about it, it could put us in a difficult situation - he already is saying it's worth about 100k less than a similar house on the same street sold for. We would obviously need to get the house independently valued. I feel this could be very tricky to get through without one brother feeling hard done by!!! Has anyone been through similar?

Three viewings and independent valuations. Take the average. Knock off a little for lack of needing surveys/estate agents etc.

If you can’t agree a price, then you sell it. That would establish the price. Don’t get sucked into him paying you back gradually. See what his mortgage capacity is first.

I would ask for 3 separate valuations.

completely agree with @IhearyouClemFandango Your Kate MIL would want both her sons to fully benefit from the property sale so he needs to give your DH a fair price. Plus it’ll almost certainly appreciate over time so he’ll do well out of it in the end.

He may have to take out a mortgage to buy your DH out-so be it.

Get a RICS accredited surveyor to do an independent valuation. Pay for this from the estate. Tell the surveyer that there are conflicting interests so you just want a non biased valuation. - discuss this with BIL.

Then BIL accepts the valuation and raises a mortgage or you sell. Don't agree for him to drip feed repayments. Either he can raise a mortgage for the amount or he can't.

It's nice for him to keep the house if he wants to but only if he can raise the money.

If he already owns a property he will need to pay second property stamp duty on the share he purchases I would think.

Definitely get three separate valuations, and go with the average, then divide it between the two of you, I.e worth 250,000 on average there for he pays £125,000 to your dh as that would be his share. Explain to him while you understand he’s struggling financially you still need to do it above board and based on the current market value of the house

If you inherit & sell aren't you liable for CGT??

My sister and I agreed that if 1 of us wanted to buy the other out, we’d put it on the market and the buyer would beat the best offer by £1.
we ended up selling it on the open market anyway

No, you have a year from the date of death to sell, and after that you’re liable formCGT ONLY on the difference in value between the sate of death and the date of the sale

Independent valuation then take off estate agent fees as per what your local ones charge and another small amount as it is a hassle free sale.

Ah, so they’d better get on with the valuations, etc. as it must be sorted out before a year is up.

My brother did the same. We both filled in the Probate forms, saw a Solicitor and got the house put in both our names until my brother paid me half. My brother was/is still living in the house now 10 years after my Dad passed away. I did agree to him paying me yearly amounts, Solicitor recommended if he did this I should charge interest, but I didn’t, but he’s happy to leave me on the house land registry as 50/50. We went with a reasonable valuation that we were both happy with.

Whatever you do don't accept payments. Either all or not at all as he will use every excuse under the sun to not pay.

Oh watch out for this. My aunt did it to my dad. Totally scammed him by telling him the place was only worth £15k so she gave him £5k (as she also subtracted "solicitors fees"). For a flat in Manchester city centre. In 2012. And he trusted his sister so wouldn't listen to me telling him this was an obvious scam.

BIL could also investigate raising the money by remortgaging his own home, might get a better deal.
I'd also say something like "we can get estate agents to give us free valuations and/or pay for a surveyor, just to make sure it's a fair price and you're not paying too much or too little".

Yes we have been in the same situation, but we were the ones doing the buying out.

Agree with what everyone else has said. We got 3 valuations and went with the average. We paid the solicitors costs as well.

@produ - Capital Gains would be due if the value of the house was more than the probate value so if the house was sold for less than probate value than there would be a capital loss

And no to part payments.

The estate will need to get accurate written valuations for probate, OP, so you will be advised to get 3 independent valuations from reputable estate agents.

Get 3 independent estate agents, to value it. Pick the middle of the three values. Discuss with a solicitor because they'd both have to pay tax on it. If the brother cannot afford it, then put it up for sale. If the brother drags his feet, a court order can be made to force the sale.

@2022NewTimes i just assumed there would be a difference.

I would get a minimum of 3 valuations, 5 or more would be better and less likely to be contested by BIL.

We looked into doing the exact same when my nan died- but from your BIL's side. DH and I were in a good position to buy, my aunt and cousins were not. My mum was very supportive, but in the long run, what little gain we'd get from no reality fees wasn't worth the long term issues with family.

IF BIL, doesn't have the funds and can't buy/get a mortgage- then sell it! Don't let them pay back in parts etc just because its family! Good luck.

We did it. 3 valuations plus a cash only instant valuation which was lower.
Agreed a price that was somewhere in the middle.

Sister wanted me to pay full market rate. I said no.
Mine was a cash sale , no hassle, no viewings, no clearing out, no cleaning. No stress, no delay, no waiting for the money. (My sis lives 300 miles away so she really didn't want to be bothered with the selling and clearing out process.)

Gave them the option. We sell on the market - all fees come from the estate and we share the costs and work of prepping the house for sale. Or you sell to me with no work at all.

In the end they knew a good thing when they saw it. They didn't have to do anything. Money just appeared in the bank - My eldest sis realised when she then tried to sell her house and it took a year, she had to clear out her stuff, pay removal fees, £5k or whatever in agents fees, loads of stress and answering queries from difficult buyers, time off work etc etc.

And easy sale has real value. Don't underestimate it.

3 independent valuations organised by you.

PS - obviously not suggesting you give it away - but a discount for an easy sale is reasonable