DH wants to sell house significantly below market value

[MrsLyndi]

My DH and I are 59 and 61 respectively. We have one child, she is 29.
My DHs parents passed away 10 or so years ago. About 10 years before this they gifted us their 5 bedroom house in a lovely part of London. They wanted to move back to where they had grown up having inherited his mother’s aunts home, but weren’t ready to see the house go as they raised DH and his late sister there.
DH has been renting the house out ever since, it’s been a nice earner for us as it is mortgage free. We live in rurally a few hours from London and had no intention of moving back so it made the most sense.

About 8/9 years ago we took a risk and allowed some fresh uni grads to move in. They made an impression at the time and we haven’t regretted it. They were lovely tenants. They slowly started moving out and now it’s one of the originals and his fiancé.
They are 27/30, incredibly good tenants (the house is gorgeous, we’ve allowed them to decorate as they wish. They are never late with rent, and just lovely people.
DH goes down to London once a month, he likes to sort the garden out himself and enjoys seeing the couple. He has gotten to know them. They are both from the north, one of them had a rough childhood, was in the care system etc. They are now both very successful, make good money etc.
DH was down at the weekend to do a last clear of the garden before winter. As per he got chatting to the couple, they gave an invite for their wedding next year. They also mentioned that they are starting to look at buying somewhere, joked they wish they could afford the house but it would be way out of budget etc. (We’ve been charging below market rate rent for a while now as we don’t need the income, and they are hassle free tenants who let DH potter in the garden).
They told DH they wouldn’t be looking at more than 1mil or so.
The house is probably worth about 1.5mil now potentially a little more(5 bedrooms, good sized garden, drive way, well decorated, in the catchment area for a fantastic primary, near one of Londons big parks and good transport links!).
DH has been thinking of selling the house for a few years and decided when they eventually moved out that he would sell it. He wants to give our daughter a gift that will pay off her mortgage (less than £500,000). Then use the rest of the money to enjoy our retirement. We have good pensions so that is not a concern.
Now DH has a crazy idea … he wants to sell them the house for what they can afford, around the £950,000-1mil mark, so significantly less than what it is worth!!!

His reasonings are

• The girl reminds him of his mother, he’s always said this. Very cheery, fun person
• One of them has overcome all sorts to get to where they are
• He knows they will look after the house, they are planning to have a family etc.
• “It feels like the right thing to do”

In DHs mind, we don’t need the money, even selling for significantly less, we can take care of our daughter and have a nice retirement.

I’m more on the fence. While they seem like lovely people, what if in 5 years they sell and run off with the £500,000+ profit. How does this work with a mortgage and such? We don’t know them all that well but would be essentially giving them half a million pounds!!!!
DH is a very kind and loving man but often too kind!
AIBU to think this is a crazy idea and wonder how it’s even possible?!

I’d be prepared to sell for under market value (mainly to avoid the marketing hassle) but probably around £50k given the value of your house.
You can’t offer a discount of over 0.5m. Your husband is thinking too emotionally. I’ve read a few times - what if the nice couple sell for the true value within a few months? It would be devastating to have given away that money for nothing, and you’d be left feeling like total mugs.
A proper valuation is needed, £1.5m sounds low, and then start thinking of your own family and sell the house properly.

You can just imagine the northerners regaling each other with their hardship stories: "I used to get up at 4am to lick t'road clean wit' tongue"...

Please don’t do this. It’s insane to give that much to strangers. Your husband had formed a pseudo relationship with this couple but they are just strangers. I’d feel no loyalty to him and would sell the home of it benefited my family by 500k! Most people would! He’s being really unfair to your daughter and foolish. He’s not some kind grandpa to them, he is a landlord and that relationship will end!!

Is he hoping he could still "potter in the garden" ie act as an unpaid gardener?

Does he think that they will be friends in the future and you will both perhaps be invited round occasionally?

I think he has a rosy dream about what life will be like with these two extra "children" (not trying to say he consciously thinks this way - I'm sure he doesn't, and he doesn't think any less of your own child either, but I think he's being a bit romantic about the whole thing).

I really think that in a few years he as well as you, would regret his over-generosity.

Get them a lovely wedding present. Something really nice fr their new home - but not the one they are in now.

I'm sure that can get a nice property for a million (even in London) and they have benefitted from your generosity in that they have been able to save a deposit much more quickly.

You or your DH may need nursing homes in the future - I know 20 years seems a lifetime away, but it comes round quickly, and they eat up the cash. You/ your DD may need this house to fund your care.

There is no room for sentimentality here, I'm afraid.

I also wouldn’t sell and would start charging market rent once they move! Think of your own daughters future. It’s insane she has a mortgage and her Dad is still considering giving 500k to strangers! Think of the home she could buy with an extra 500k! Or all the travels you could do!

No chance. Whoever buys the house will look after it at that price.

NO.

You can’t gift away 1/2 mil to complete strangers. Crazy. You have your own family!

Put your foot down. Silly man.

I have have a friend who sold her house at a discount to friends of hers whom she knew would look after it. She liked the idea of the house remaining a family home and being sympathetically maintained.The sums involved were nowhere near as much as this though. My friend doesn't have children either so that was another factor she didn't need to consider. It's not a like for like comparison but just a reminder that people can be kind without any cynical intentions.

I thought the shared ownership suggestion was worth looking into and it would mean that the OP's daughter would get help with her mortgage.

As a word of warning, when this happened in my family it was the start of the responsible person completely losing the plot. Happy to answer any questions by DM.

Imagine even considering prioritising some strangers over your own daughter! Shaking my head, as they say.

If its worth 1.5 then it should go on the market at 1.5. At a push, I'd consider taking 1.4 from the current tenants. But no less!

Of all the people in the world that need a handout, he picks this couple?

I think he is suggesting it because it’s not real money but I doubt he would hand them over 500k just for being friendly! Of course they are friendly m, they have save a fortune on rent!!!!!

Get the house valued. That’s my advice anyway.

If I was the tenant I'd buy it and sell it. Don't let your DH do this. Why would he pillage your retirement or your DDs inheritance? Is he losing his marbles?

Haha, so your husband got a free massively expensive house worth more than most people will see in a lifetime, from which you’ve financially benefited through renting it out and from which you will financially benefit through selling it, and your daughter will financially benefit regardless, but heaven forfend someone else should catch a financial break from your husband’s generosity. Such a landlord mentality.

Is the house in both your names? Do you have the ability to block the sale? He is out of his tiny mind IMO and I would be furious (and assuming he has a crush on the young woman to be honest).

There's something a bit smelly here.

This couple are 29 year old graduates so have been working full time for a maximum of 8 years and have no family wealth.

Even if they had gone in to the type of professions that are very high earning down the line (City, Corporate law etc..) the idea that they could, in their late 20s, with no inheritance or family wealth, have a budget of £1M, seems pretty far fetched.

Unless there is a spoiler here and they are very successful in an area like sport or showbusiness.

If he went ahead, I would bet my own house that it would be back on the market within a year. The couple would be insane to just sit on a half a million gift - they'd sell, buy the one million property as planned and halve their mortgage. They'd be crazy not to!! Your DH will lose the house completely to strangers and half a million quid too. Lovely idea but totally romanticised and unrealistic. Better to find a way to lend them the difference, while locking it all down legally through solicitors. I'd bet the couple would politely decline if you offered this though.

That's an absolutely bonkers thing to do. A couple in their late 20s who can afford to buy a million pound house do not need your charity.

I don't think your PIL intended to gift you this house so you could make a generous financial gift to some near strangers instead of your own daughter.

Suppose your retirement fund doesn't stretch as far as you think it will? Is your daughter going to bail you out because you gave some of your assets away to someone else?

What if you need care in the not too distant future and the council decides this was deliberate deprivation of assets and treats you as though you still own the half a million pounds that you gave to some unrelated well off couple in their 20s?

Absolutely nuts.

I’m in agreement here with those saying this couple do not sound at all needy.

As for being good tenants. Don’t almost all tenants pay rent on time, that’s just normal isn’t it… you set up a direct debit for the day you get paid and don’t think about it much. Not really a reason to be gifted £500k+.

If your family have plenty of money spare give it to charity. There are an awful lot of homeless families for whom even £5k would be life changing.

I came on here to make exactly this point and couldn’t do it better than @SunRainStorm has done.

I’n sure they are lovely people. Who obviously genuinely appreciate what you’ve done for them. But if your DH wants to use his windfall to help others less fortunate than himself, half a million quid could have a real impact on the lives of,
say, 10 less privileged UK kids who wanted to train to be doctors but simply couldn’t afford to train. Or a whole village of kids if he put it towards sponsoring a school in the developing world. I think his logic is flawed on this one.

Better to find a way to lend them the difference, while locking it all down legally through solicitors. I'd bet the couple would politely decline if you offered this though.

@NotObligedToArgueWithStrangers makes a really good point here. And I agree - I bet they wouldn’t want to do that.

Yanbu. Just sell at market value. They benefited from cheap rent and you had a great tenant. Huge win win both sides.

Imagine your or your husband has a stroke tomorrow and suddenly needs 24-hour care. You're in the right age group. How would you feel then?

Bless your DH for having such a lovely heart but it's a batshit crazy idea!

They obviously don't need any financial help if they have a budget of £1m!

He's looking at it through rose coloured glasses, imagining the couple with have a family there, he will be involved and seeing their kids grow up there and it becoming a family home that's it's always been to him. In reality they will sell it, make a massive profit and sail off into the sunset never to be seen again.

You're only young, you never know what's round the corner. You may be in a strong position now but that might not always be the case.

Sell the property at the correct market value! Anything else is just utter madness

Well these comments are very sad

I would be with your husband and let them have it for what they can afford or at least make some kind of part rent deal where they buy a share and pay the rest off later

The point is that you and your family don't need the extra money. You'll still have plenty. You've said so yourself. Just because you could make more money why do you have to?

It's unearned money. A windfall. He happens to be lucky that his parents bought a house in London. It's not like it's money from the sweat of his brow. He wants to share it and benefit 2 families rather than just one and I think that's a beautiful thing. He wants to do a kind generous thing to honour the memory of his parents.

My grandad was left a piece of land, completely unexpectedly in the will of a lady he gardened for and that act has transformed the fortunes of our family for generations. Grandad was one of a huge number of siblings brought up in rural poverty. His dad was an illiterate farm labourer. He was clever but not allowed to go to grammar school as they couldn't afford the uniform and needed him to work. The land allowed him to start a successful business, buy his own home and for my dad to go to uni. He was always so thankful, tended her grave and kept her memory alive.

I've been thinking about something similar myself. Now I have my own house bought with my own money and will inherit another 2 properties from my mum and dad's families. I don't need all that. I am thinking of putting some of it into a charity. Maybe something to give local kids bursaries for uni or grants to start a business or something like that. I think it's what my parents and grandparents would want and my own kids will still have all the advantages they already do. They don't need yet more.

He has probably given them a fortune already with the cheap rent. Add it up. No wonder they are lovely!