Quick house sale options?

[DrUptonsGardenGnome]

FIL has died and MIL is keen to move into a retirement complex close to us. To do this she needs to sell their house. It’s already been on the market for a couple of years, in which time it’s had one offer which then fell through.

The flats in this complex don’t come up all that often but there are a few for sale at the moment. So time is of the essence. In terms of options, this is what I have:

Continue with the open market but reduce the price (FIL was very stubborn about the price but I think MIL is more flexible. It’s just a question of how low she’d have to go.).

Sell to a house buying company (probably for 80-85% of the market value but it would be quick).

Purchase the retirement flat with a Retirement Interest Only mortgage and pay it off as soon as the house sells.

I need to speak to the EA and MIL about option 1 but does anyone have any experience of the other two options? Also if there are others I’ve missed I’d be keen to learn about alternatives.

If there are hundreds of properties for sale because of all the new builds but only tens of would be buyers then that is still a price issue. The buyers will buy if the price is attractive enough. But the oversupply will drive property prices down.

What prices does Zoopla shoe have been recently achieved for similar properties and how does that compare to your recent asking price when on for sale and the recent bids at auction?

So, to set out the whole sorry saga, here’s the pricing history but with illustrative prices rather than the actual ones to protect MIL’s
privacy.

The house is first listed at £1 million at FIL’s insistence. Two years pass with no viewings and no offers. The house is listed with three EAs during this time.

They change to their fourth EA and FIL agrees to drop the price to £900k. There’s one offer at close to asking price which comes to nothing nearly a year later.

FIL dies. MIL agrees to drop the price to £850k. She’s very unhappy about this because FIL said it was worth more. Two viewings and no offers.

After the house buying company declines to take it on (they didn’t say why but I think it’s because they can’t flip it for a quick profit), she agrees to an online auction.

It’s listed at £590k with a guide price of £600-£650k. The reserve is £650k. An equivalent new build (smaller and with no garage) sells for about £650k. Bids close at £610k.

Now, this is enough to enable her to purchase a retirement flat and move, but she won’t accept that because she believes the house should sell for more. Yes, we have explained that the market is dead right now and the days of making money through house sales might be gone.

DH and BIL are the sole beneficiaries of her will. They don’t care about their inheritance and have said so to her. Re-selling the retirement flat when she dies is their issue to deal with, not hers. We all just want her to be happy (which she definitely is not right now).

DH and BIL have even offered to “top up” the sale price to a figure she finds acceptable but she’s refused. She also refuses to use the substantial amount she’s inherited from FIL to buy the retirement property with a small amount of bridging finance (reason: that’s FIL’s money. Yes, I have gently said he’s unable to spend it now, it’s her’s).

The house isn’t old fashioned or stuffed full of old people’s furniture and doo-dads, it’s just been newly painted and had a lovely mature garden.

I know that some of MIL’s behaviour is irrational. Some of it comes from ignorance of how the property market works. Some of it is loyalty/deference to FIL. These aren’t easy obstacles to overcome when combined with the current market.

DO NOT BUY A RETIREMENT FLAT IN YOUR 80’S. JUST DONT.

Rent one for flexibility so if parent passes or has to go into a care home you aren’t stuck trying to sell it with a very small market. You also need to keep paying the service charge until sold. They are likely to be substantial I.e £600 per month plus.

Without being rude was your FIL an estate agent? Any experience with property or did he think he knew better? Some people over value their house because they don’t really want to move. Could he have been like that?

Do you know what they paid for it? Presumably they owned it outright.

How you'd feel about it would be very different if you'd paid £1 million than if you'd paid £500K.

A difficult situation for your MIL to get her head around @DrUptonsGardenGnome. But it’s good that your DH and his brother are both on same page and trying to encourage their mother to just sell for whatever she can.

£650k reserve and £610k highest bid is not that far apart in percentage terms. I don’t know how auctions work but is there any way to get the bidder details to see if the gap can be closed? Or put it back on the market at £650k and see if they come via the agent with an offer?

It sounds like the area’s market has changed significantly (and possibly permanently) since they bought with all those new builds saturating the market and driving down the achievable selling price. It can take time for any owner to accept that reality especially someone older and who has spent a lifetime deferring to someone who now isn’t here so can’t modify their opinion on the local market. It’s tough.

They paid just over £700k about a decade ago, so she will make a “loss” if she sells below that. We’ve tried to reconceptualise this as having had many years living in the house and now its value to her should be thought of as an enabler to help her move on to the next stage. One problem is that her entire experience of house selling is that you always sell for more than you bought it, so she’s having trouble getting her head around that. But she also won’t allow her sons to make up the balance so she doesn’t make a loss.

Not rude at all! FIL’s approach to property was, shall we say, idiosyncratic. He never took advice and MIL was not the sort to challenge him.

@Choux, we’ve instructed the auction company to see if the bidders will make an offer close to the reserve. It’s just a waiting game right now.

We have the option of relisting at the next auction and if we do, we will work hard with MIL to lower the reserve.

Sorry if this offends you @DrUptonsGardenGnome (hopefully you kinda agree) but your FIL was an idiot and MIL not much better.

Who keeps a house on the market for 2 years without a single viewing?? It's absolute madness. I would have reduced it to 950k within 2 months not kept it on at the same price for 2 years. Then reduced it to 900k, then 850k and so on.

Finally your MIL understands that the house is worth a ball park figure of about 600-650k (the guide price). But after years of it languishing on the market, with no interest whatsoever, she won't accept an offer of 610k.

At least you know the price at which people will make offers on it now. Your husband just has to work on her to relist it in another auction, but put the reserve lower than 650k. Ideally it would be 600k to get rid of the property once and for all.

So if she sells at what she can likely get now she will make £100k ‘loss’ - which won’t financially impact her life at all. But she will be able to get her much wanted retirement home and enjoy life more.

When her sons inherit, that £100k loss will be reduced to only £60k after inheritance tax (unless your in laws have got a trust it sounds like they would be over the £1m allowance for two estates with that extra £100k). Divide the £60k by two and each brother would have an extra £30k if the property market were as she wishes it was. Compared to what they will inherit, the £30k each won’t add anything much to their lives.

So no one will be impacted by the financial loss but MIL, and everyone involved in supporting her, is being impacted by her current loneliness and wish to move. Hopefully the bidder comes back and hasn’t bought any of the other properties at auction or for sale by agent. In the meantime every time MIL expresses loneliness or frustration at the lack of a sale it’s time to gently say ‘you can definitely sell it, you just need to agree to what buyers are willing to pay”. Good luck.

@Twiglets1 I could fill an entire thread with FIL’s questionable property decisions! We gave up trying to make sense of it all. It was ok while he was alive because they had each other and the urgency to move was not there. He was in good health right up until the sudden end. In the 25 years I knew him, they moved 7 times, 3 of those within the same town… MIL is very passive and just went along with what he decided. It’s a struggle to change the behaviour of a lifetime.

@Choux, yes, yes, yes. I haven’t been so blunt as to ask MIL what she plans to do with this extra £100k, it would probably send her into a tailspin and I don’t think she really knows why she’s holding out for it other than the deference to FIL’s views on property value and her experience that property never goes down, only up.

FIL sounds like he didn’t really know what he was doing.

Moving 7 times and 3 within the same town is barmy. That would have cost in terms of stamp duty, solicitors fees etc.

Sounds very frustrating @DrUptonsGardenGnome

The auction could have been the answer but she sounds very stubborn in her own way.

Does she really want to move?

In depth article from the Telegraph on how rising interest rates in recent years, lack of wages growth, buy to let laws and the Iran war are all impacting the housing market.
https://archive.ph/rrg6j

That article is a sobering read. If MIL gets an acceptable offer I will be biting the buyer’s hand off to accept it!

I wonder if you can help her look at it in terms of having already made lots of money on the housing market? I bet their first property was in the 10s of thousands? So they already made a fortune, and it was just overinflated last time they bought? Might be worth a try.