Cousin buying grandparents' house way below current market value

MrBrindle

Wasn't sure whether to post this under the house buying section or here, but it's more of a family affair than the actual house.

My brother has been living at my grandparents' house for around 4 years. Two bed bungalow on a big plot - enough for three houses if you demolished and built again. House is owned by my mother and her sister (my aunty). They pay cheap rent and the bills.

My cousin (my aunty's daughter) wants to move back to the area after having a child, and would like to buy the house. She wants to extend upwards and outwards. They've had a valuation from a surveyor who did a report on the house, which has come back very surprisingly at £175,000. This is the 'true cost' of the property - needs rewiring, some asbestos removed, new heating system etc. 

Now here's the snag, I've looked at other bungalows for sale within a 5 mile radius and they're going for £220-240,000 in the current climate. One recently sold for £250,000+. We knew £175,000 was far too cheap anyway.

I'm not particularly happy, because this is my inheritance - my mother/aunty spoke a few years ago that when they sell it, the money will be shared between the four cousins. Life has been financially tough the past few years, and we could really do with a bit of cash for a new car, some house work/repairs, and pay off a private loan we have. On one hand, it's nice the bungalow will be kept within the family, but I know I'll feel quite aggrieved about this for a long time.

Unfortunately, my father passed away suddenly 4 weeks ago and my mum doesn't care and doesn't want to argue with her sister about the cost of the house.

What would you all do in this situation? Should I just leave things be and forget about it? I don't really want to argue with my cousin and my aunty, but does this all sound fair?

elsien

Before you consider your “inheritance” have mum and aunt looked into all the tax implications of selling and gifting the money? If they are older and in poor health there may be deliberate deprivation of assets to take into account as well. Circumstances may be different and the decision they made a number of years ago years ago may have changed in the meantime. 

Aside from which, if they’ve had a proper survey done, it is likely to be more accurate than the over optimistic estate agent prices. 

It’s no use looking at what they are asking for, you need to check for what things actually sold for. Then you need to check you are comparing like for like. There are houses very similar to mine within a 5 mile radius which sell for a lot more than mine would because they are just in a better area. And not next to a retail park. You need to do your homework more thoroughly if you do want to make a fuss. 

But it’s mum’s house and mum’s decision. If she doesn’t want to argue that’s her choice. You need to be thinking about the impact of all this on her, not about what you want to do with the money if it came to you. Which it may not. The best option might be to suggest that everyone just lets it lie till mum is in a better place. No-one should be harassing her when she is grieving. 

sassyblue

Can you ask to get a couple of estate agent's round yourself and compare them with the surveyor's valuation? Take the average of all three valuations.

The other bungalows could be in better streets, sounds like that bungalow does need quite a bit of work, you need to guess how much and remember other bungalows may be £250,000 but it doesn’t mean they sell for that much….

MalMonroe

I'm sorry for your recent loss. I can understand your Mum not wanting to be bothered by things like this. 

The thing is, the property in question isn't even yours. It's nothing to do with you. And even if your Mum and your aunty had been discussing, in the past, the possibility of them splitting the proceeds of any sale with the four cousins, that was just talk and may not now be relevant. Plus, if one of the cousins actually buys the house it skews the whole inheritance plan because then there would be one cousin living in the bungalow with three cousins splitting the proceeds of the sale instead of four of you. It wouldn't be fair shares.

But that's all moot and you can feel as unhappy and aggrieved as you like, for as long as you like. Because it is not your inheritance at all, it's your Mum's and your aunty's. If they are still wanting to share it with their children then that's all well and good but unfortunately you don't get to have any say in the matter.

You say "What would you all do in this situation? Should I just leave things be and forget about it?"  What I'd do is realise that this is a matter solely for my Mum and aunty to sort out between them. What else can you do other than leave things be and forget about it? Or - you could trust your Mum and aunty to work something out that suits everyone. Your Mum, as elsien says, is grieving. Leave things be. Or you could find yourself without any 'inheritance' and worst of all, without any family.  

MalMonroe

sassyblue said:

Can you ask to get a couple of estate agent's round yourself and compare them with the surveyor's valuation? Take the average of all three valuations.

The other bungalows could be in better streets, sounds like that bungalow does need quite a bit of work, you need to guess how much and remember other bungalows may be £250,000 but it doesn’t mean they sell for that much….

That's a terrible idea.

It's not even the OP's property and doing as you suggest is bound to just antagonise everyone and make matters worse. Plus the OP's father has just died and his Mum is suffering and grieving. Nobody wants to start family arguments when there's absolutely no necessity.

74jax

I'm not sure how an estate agents valuation will help? EAs will price to put on the market, you usually then have a survey which indicates a more realistic value.A property is 'worth' anything someone wants to buy it for.

I think they have done it the right way, maybe 2 quotes would have been good but 1 perfectly fine.

OP I'm confused - you say it's your grandparents house but owned by your mother and aunt with your brother living in it. Where are grandparents? Are they looked after in this house? Where will everyone go when your cousin buys the house and moves in?

I know you will have a lot to deal with, with your dad's passing, however take this opportunity to carefully look at your mum's will.  How is the house owned. Does your mum own half, and when she dies aunty can continue to live there? Or are mum and aunty joint tenants so it passes to aunty?

If your mums share, in her will, was to pass to you and not her husband, does your dads will leave anything to you and not his wife? This is what you can safely call your inheritance, however with mum still alive it's not inheritance yet.

Your brother has benefitted by 'cheap rent', as he had been renting, landlords must keep a property to a certain standard with checks in place. Is it possible if has been priced with a sitting tenant? 

tooldle

I've recently bought a bungalow which in many ways is similar to what you describe. It has been empty -ish for some years following an inheritance. The inheriting family have allowed their adult kids to live in it for a token rent over the last 10-12 years. It sits on a very large plot of roughly half an acre. Bungalows in the area are as rare as hens teeth and currently sell in the 250-300K range. 
Now the reality of the situation. Having a lot of land is meaningless unless you can or want to develop it. If development were possible and it often isn't for a variety of circumstances, you are effectively selling the land including the costs of getting rid of the existing structure. Unless a developer intended to keep the existing building, it is a cost rather than a benefit to them.
The place i have just bought has asbestos amongst a number of other issues that might not be obvious to the untrained eye. We estimate roughly £100K is needed, and years of work to get it back to modern day standard. It is liveable as it is and if on the open market may well attract offers in the range mention above. However, as soon as a surveyor gets involved, the sale price is going to come crashing down due to the 'cost' of the necessary works. Asbestos removal for example can cost thousands. We had to send a sample for lab testing to confirm the type, and from those results the removal plan was determined. If you have to completely seal the area, costs are going to be considerably higher.
Bungalows tend to appeal to the older person, most of whom will shy away from 'projects' as they are most likely looking to downsize or in someway make their day to day living experience easier. The place we've purchased has been to auction twice and not sold. We agreed a price in the region of 50% of the potential market value if the place were pristine.

billy2shots

First of all you have to take responsibility for your own financial position. 

You would like a new car , do some house repairs and pay off a private loan ....

Not wishing to sound harsh but you call it your inheritance. It's not, your mum and Aunt are still alive, there is no inheritance. Once they die there might or might not be some inheritance for you. 
The fact you have a personal loan suggests you are are not living to your means, the fact you have factored in 'inheritance' would back up that point. Forget about what you might or might not get and turn your life around yourself. 

Now having said that, is there a chance that mum/aunt might be planning on "gifting' some money to loved ones when the sale goes through? Again , don't plan for this but you might be getting upset over nothing. 

Looking at it from a more practical pont of view. 

Value of property in your mind £220k
Agreed price £175k

Difference £45k

If shared between 4 that would be £11,250. Is that worth the upset?

I feel horrible working out a split of baked in "inheritance' like that but this is just to illustrate the point.

MaryNB

If your mother knows about the difference between the surveyor's valuation and yours, and still wants to go ahead with the sale then there's nothing really wrong with what's happening. She's not being conned. It's still her property and she can decide what she wants to do with it. 

My friend's mother has been having a hard time with her sister over the sale of their mother's property and it's causing her a lot of stress. She just wants rid. 

Sea_Shell

You could always put in a higher counter offer and buy the property yourself!


By all means give your Mum support (lend an ear - put in your two penneth) in making any decisions about the sale, but at the end of the day it's their decision as to what they do.   If they do sell it "cheap" then so be it.    If your Mum is happy to only get £87,500 out of the sale, then that's up to her.

I'm assuming they inherited this property from their parents, is that right?

What she then does with that money is also then up to her, but she should be mindful of the implications of gifting large amounts from it.

If this sale (any sale) goes ahead, is your Brother happy to move out, or will he dig his heels in and make life difficult for everyone?   Can he afford to move out without his "cut"?

I also have to agree with Billy above, in that you have to take responsibility for your own financial situation, and not hold out for an "inheritance" to solve your problems.    

You need to act as if there is NO inheritance (or gifts) due to come your way.    IF you get anything, it's a bonus. 

NSG666

MrBrindle said:

Wasn't sure whether to post this under the house buying section or here, but it's more of a family affair than the actual house.

My brother has been living at my grandparents' house for around 4 years. Two bed bungalow on a big plot - enough for three houses if you demolished and built again. House is owned by my mother and her sister (my aunty). They pay cheap rent and the bills.

My cousin (my aunty's daughter) wants to move back to the area after having a child, and would like to buy the house. She wants to extend upwards and outwards. They've had a valuation from a surveyor who did a report on the house, which has come back very surprisingly at £175,000. This is the 'true cost' of the property - needs rewiring, some asbestos removed, new heating system etc. 

Now here's the snag, I've looked at other bungalows for sale within a 5 mile radius and they're going for £220-240,000 in the current climate. One recently sold for £250,000+. We knew £175,000 was far too cheap anyway.

I'm not particularly happy, because this is my inheritance - my mother/aunty spoke a few years ago that when they sell it, the money will be shared between the four cousins. Life has been financially tough the past few years, and we could really do with a bit of cash for a new car, some house work/repairs, and pay off a private loan we have. On one hand, it's nice the bungalow will be kept within the family, but I know I'll feel quite aggrieved about this for a long time.

Unfortunately, my father passed away suddenly 4 weeks ago and my mum doesn't care and doesn't want to argue with her sister about the cost of the house.

What would you all do in this situation? Should I just leave things be and forget about it? I don't really want to argue with my cousin and my aunty, but does this all sound fair?

From your post 
Arguing over a house move - who's being unreasonable — MoneySavingExpert Forum
You are on your 3rd house since 2013 and your other half wants to move again. She has 2 liveried horses.

You are free to do what you want with your life and your money but please don't be crying the poor tale.