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Original poster

Would you sell to you mum for 20k less if

61 replies

mrsnw · 06/04/2014 19:19

It ment you could work and have child care on tap? Long story but we tried to sell our three bed mid terrace a couple of years ago. We discovered that the garage en bloc was subsiding due to a tree. The buyer pulled out and we went through the insurance and the garage is now fixed and tree is removed. However, the house still has that subsidence claim attached to it even though the garage is over 500m away from the house and attached to other garages. Mum has offered 20k less than market value as it's all she can afford and is desperate to move from London to be closer to us. She has offered to have my children for me after school so I can go back to work. Advice appreciated please xx

OP posts:
Barbaralovesroger · 07/04/2014 09:39

Is your house suitable for her old age? Is it the best option for her or is she just being helpful? What else could she buy for 235k

Barbaralovesroger · 07/04/2014 09:40

If the house is a good option, I'd sell it to her. How many days childcare would she do?

Original poster
mrsnw · 07/04/2014 09:51

Yes we could afford something with the 20k drop as I would be able to work and have no childcare costs. Mum is 65 so this will be her last move so ironically we will still be stuck with the garage!!! Hope that is a long long way off yet ??

OP posts:
Original poster
mrsnw · 07/04/2014 09:53

I guess the only toilet is upstairs but that's the same as the house she is in now. I would be closer to her in terms of where we would live so could be of more help.

OP posts:
iseenodust · 07/04/2014 09:55

I don't think you can tie it to childcare as a 'deal'. If she wants to move close and help you out that is lovely. What if she fractures a hip and you've only had one year's worth of help? Will there be simmering resentment that the 20k is now out of reach? I hope she is a fit and well 65 but there are no guarantees.

Kewcumber · 07/04/2014 10:00

I'm an accountant so by nature I'd like something clearly agreed and in writing...

Agree between you how much of a reduction you're giving her - lets say £20,000 and "loan" her that amount. Agree how much childcare she's going to give you at a rate of say £4k per year so that the "debt" to you will be reduced by £4k per year and after 5 years she will owe you nothing and potentially you run the risk of having to pay for childcare.

Otherwise if anything happens to your mum (sorry!) you will be donating £20k to whomever inherits from her (and potentially paying inheritance tax on it).

Spot the accountant.

difficultpickle · 07/04/2014 10:01

I would be wary of saying it is your mum's last move unless you live in a bungalow. At 65 my mum was fit and well. At 73 she had knee surgery that went wrong and left her needing to walk with two sticks. Her last move at 65 won't actually be her last move as intended as she is now getting to the stage where she needs a bungalow (she already has a downstairs loo and couldn't manage without it). If that could be an issue for you I would sell your house on the open market and find your mum a house that will be easier to sell if the need arises.

Kewcumber · 07/04/2014 10:01

If she becomes unwell and can't do childcare then teh £20,000 remains due to you and can be repaid first before any inheritance tax is due (though to be fiar there may not be any.

But you will be left having to find and pay for childcare

mrsnec · 07/04/2014 10:01

We have lost 7 buyers on a house with previous subsidence issues despite the fact it's been fixed and we have proved there's been no movement in 10 years, without the child care deal in place I'd still do it and we'd consider a similar deal with any of our family.

StrokeOfBadLuck · 07/04/2014 10:02

I think you have to be a bit careful here. As Barbara says, it's only about 13k less than the expected selling price. Also, your valuation isn't based on the subsidence issue, which does make it much more difficult to sell, and will quite possibly reduce the price further. You think you are doing her a favour, but she equally might think she is doing you the favour.

Sixty five is still young, and she may quite possibly move again. My FIL started dating a new woman in his 80s, and they moved in together very quickly. Also, what if your mum becomes ill? I don't think you can depend on the babysitting - it's more of a fortuitous extra. Would you feel resentful if you sold it to her, but didn't get the extra help? If so, I wouldn't do it. I would only do it if you are just glad to be able to help out your mum, and the babysitting is just an added extra.

WeAreEternal · 07/04/2014 10:04

I would absolutely do it.

mercibucket · 07/04/2014 10:13

why, out of all the houses in your area, does your mum want your house?

i really think she is trying to help you out

things might go badly if you(your dh) see it as doing her a 20 000 pound favour

if you think your dh will start to feel hard done by, put the house on the market and see how things go

your price will be limited naturally by the tax bracket so a ceiling of 250 000 sounds likely, but expect haggling or cash buyers only over the subsidence issue

Barbaralovesroger · 07/04/2014 10:36

The subsidence can seriously effect what you sell for. It does sound like it could work for both of you though.

Original poster
mrsnw · 07/04/2014 10:43

To be honest the childcare is a bonus. She lives in a very run down part of East London and I'm in a very affluent area of east herts. I would really like her to have a better standard of living and be close to us. She deeply regretted selling our childhood home and moving when my dad died so she wants to be sure about the next move. She has always wanted to move where I am. I guess buying our house she will have some reassurance about what she is getting .

OP posts:
Barbaralovesroger · 07/04/2014 12:11

Go for it! Sounds good option all round

orangepudding · 07/04/2014 12:32

I would take up her offer
. I do however think your mum is doing you a big favour as a house with subsidence issues can be very hard to sell even if I your case it was on a garage that isn't attached. I also think you need to get a valuation which bears the subsidence issue in mind. I think you'll find that with that in mind and the fact you won't be paying ea fees your um is not I fact getting a 20k discount.

oscarwilde · 07/04/2014 13:22

a) I'd split the garage off the deeds - you can always sell it separately anyway if neither you nor your mum have any use for it. Mind you I live in London and they sell for 40K+ here.
b) Your mum wants to live near you but she's 65. This is viewed as her last move. Is a 3 bed house the most appropriate home for her in her advancing/declining years? Will it take a stairlift, can it be adapted for elderly living? If not, then sod the favour to you all, it's just not a good plan.
c) you haven't found a new home - if she is going to provide any childcare (for probably max 5 yrs), she needs to be able to get to you quickly and easily. You should fix on a house first.

Kewcumber · 07/04/2014 13:39

Split the garage off the deeds and rent it out. No-one will care about subsidence if they're renting. Garages around here go for £75 a month

littleredsquirrel · 07/04/2014 13:48

Your mum will need to tell her solicitor that its a transaction at an undervalue since she will probably be advised to obtain indemnity insurance to cover her in the event that you or your husband became bankrupt (in which case she could be liable for the extra money).

You really need a proper valuation on the property which takes into account the problems.

Original poster
mrsnw · 07/04/2014 16:02

Wow, this is not as easy as I thought. Why would she need indemnity insurance?

OP posts:
LondonGirl83 · 07/04/2014 16:02

Yes, the free child care is worth that alone!

If buyers were aware that the subsidence only related to the house, was fixed and would continue to be covered by insurance, I think you would sell for more or less market but you might have to wait for someone with common sense to come along who understands these things.

I'm not sure where you are in the country but in London, between babysitting and daytime child care, her childcare offer would pay for the 20k in a year easily. Also, it will be great for your children and your mother assuming you all have a healthy relationship.

Original poster
mrsnw · 07/04/2014 16:04

We still have a 30k mortgage on our house. So we would need to effectively buy the garage from our mortgage provider and insure it!

OP posts:
littleredsquirrel · 07/04/2014 16:09

the law says that if there is a transaction at an undervalue it can be undone in the case of the sellers bankruptcy. So if you or your DH were to become bankrupt (which I'm sure won't happen but your mum needs to look after her own interests) then they could come after your mum for the excess on the house. this is why her solicitor will recommend she has indemnity insurance to cover this risk.

This is of course only the case if the property is being sold at an undervalue. If the valuation isn't correct then there might not be a sale at an undervalue anyway.

Original poster
mrsnw · 07/04/2014 16:40

I've just looked on zoopla and the mid terrace behind us sold for 220000 in nov. This did need a lot of work though as it was occupied by an elderly lady. The valuation of 250-265 was without them knowing about the problem with the garage. It might be worth getting another valuation then with the subsidence being revealed.

OP posts:
Broen · 07/04/2014 16:42

Sounds good to me! Convenience, and family and quality of life, those things are priceless