How you buy some one out in real estate?
Tuesday, 22. June 2010
Okay so my mom and her sister own a house together. It was my grandparents house and they inherited it when they died. My aunt has been freeloading and living in there for FREE for the past year and a half. She doesn’t even have a job. Anyway my mom is ready to finally buy her out since her sister doesn’t have the means (obviously) to do it herself. What is her first step? Its not going to be an easy road since my aunt is playing the victim card and cant believe my mom would be trying to buy her out. Does my mom need to get a lawyer? Or just a real estate agent? What should she do first? Is this going to be generally easy? Also, does my mother need to qualify for a loan to buy her out? (since there is equity because the house is paid for)
Thanks for the help!
To answer your question- my mother does want to buy her out. I’m pretty sure that her sister will begrudgingly agree because she doesn’t really have a choice you know? Her sister isn’t holding on for any reason other than its a free place to live. So my question is I guess can she just go find a real esate agent to do an estimate and what not? I guess if she doesn’t agree then she’d have to get a lawyer and all that. Supposing that wont happen what steps should my mom take?
They both do no live in the house. My aunt lives there with her cousin…and she charges her cousin rent! And nothing is paid to my mother at all. Her cousin also pays for all of the utilities.
ThePadBuyer.com Says:
Here are some steps to consider.
First – your mom and sister need to agree on a method of placing a value on the property. This is usually done by getting recent sales comps (in this market I would not go back more than 3 – 6 months). You will want to make sure that the house is compared apples-to-apples to others that have sold. Keep in mind age, condition, square footage, special amenities, etc.. Most appraisers will use this method. Even if your sister does not agree to this method – it will most likely be used in case of arbitration or if it would go to court.
Second – You need to establish that your Aunt can’t live there for free and that she will have to shoulder her share of the expenses. This gives your mother grounds to start some sort of collections action if she fails to pay. Unfortunately, the past 1.5 years may not be able to be used as any basis because your mom and her sister do not have an agreement. If your mom is paying for all utilities, food, taxes, etc.. she is liable for those things that are in her name. Taxes and other things that are joint – she should have a right to collect on immediately. Going forward from here on out – she needs to tell your aunt she is responsible for her share.
Third – I would try to get your aunt to agree to an arbitrator if she does not agree to a reasonable price and time for sale. Getting a lawyer involved is costly. If you get a lawyer involved, I would have the issue raised to a forced sale. In other words – force the sale of the house and then either party can purchase it.
Your mom can get a loan as long as there is a standard purchase and sales agreement between the two parties. If all else fails, depending how the property is owned, your mom can actually sell her share of the property (equity splitting) to an outsider – (maybe another family member who won’t be so charitable).
The ease of the process is going to depend on how hard your Aunt wants to play – but the immediate issue is to start making her pay her fair share on all of the bills. Collecting for taxes and other things like that can be done in small claims court without a lawyer.
Dizzy_Lizzy Says:
If your aunt doesn’t want to sell her share, your mom needs a lawyer who can talk to her about her rights and what can be done here.
Landlord Says:
Your mom can’t mortgage the house without the sister agreeing to it. Also, the sister does not have to agree to the buy out if the probate has finished. If probate is still going on your mother can force the sale, but not a buy out. She can not force the sister to give up her inheritance.
heyteach2 Says:
I would contact the county bar association and ask for a referral to a real estate attorney. For about $50 for 30 minutes you should be able to get accurate, qualified advice.
My GUESS is that the attorney can arrange for the appraisal (essential to determine value of what she should offer her sister) and arrange for an offer and sale.
If your aunt absolutely doesn’t want to sell, he can tell your mother what her rights are.
When you say your aunt is free-loading, I assume she is not paying utilities, taxes, insurance, maintenance for the home? Again, those are legal issues that a lawyer would best advise her on.
Is it going to be easy? Absolutely not, that I know. She probably will need a loan but if she’s buying out a half-interest, she’s going to have a good equity stake so she should be able to get a decent one.
Good luck.
Luke 6:37 Says:
She can buy her sister out. Yes, she would have to get a loan. It’s best to talk to a real estate lawyer because I do not know where you live nor do I know the specifics. One thing is certain a sale of the house can be forced by the court if she refuses. Meaning the sister would have to buy you out or be willing to let you buy her out or you can demand rent based on your half ownership. She will not lose her inheritance but can’t just live off of the sister’s either if the sister is not happy with the situation. Why doesn’t your mother just force her to buy out. Is she hanging onto her half for some reason?
WOW! Yes, if it can’t be handled amicably then she needs to get a lawyer and go to court. She needs to be prepared for the consequences of taking a family member to court though. The sister owes your mom rent too. The sister is wrong on so many levels.
BriarKat Says:
Your mom can’t buy her sister out unless the sister agrees. She can’t sell the house either if the sister does not agree. Your mom should talk to an attorney. Do they both live in the house? That would be beneficial to know.