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Inheriting Vacation Home.
Old 05-16-2014, 11:39 AM   #1
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Inheriting Vacation Home.

It's been a couple of weeks since I first signed on, Couple of years since my first sign on but forgot the UN. FireCalc has been very helpful in giving me a higher degree of confidence of making it to, the end. Have I stirred the pots enough? I think I donated $25 to FireCalc. If the mods are nice to me, I will donate positively $25. Soon, but just not now.

Age 64 and wife is 67. We were forced into retirement. Me because of a change in technology (hardware electronics) ten years ago. I had no desire to learn a new skill set and commute 4 hours/day. Also my mother living alone and got to a point where we need to have someone with her (currently 97 and meets ADA requirements for last 8 years. Wife was RIF'd, 4 years ago in a company that is a primary supplier to Boeing 787. She has her mother at 95, who is staying at our home. (houses are 3 miles apart).

Scene: Inheriting the family coastal house (CH), Oregon, when Mom passes. Will get the step-up. Will stipulates my sister and I will receive the CH. House is dated to last remodel in early 70's. Good repair but I have deferred maintenance on the decks. No debts. No mortgages. Nothing in arrears. House has a walkability score of 10. Out of the Tsunami zone, Out of the fog zone. View of town and ocean and coastal range, very rare. Biggest house, biggest lot. Private road.

The Problem: Sister, although she has more money and assets, does not want to buy me out. House is 40% below peak of 2007, if it can be sold on open market. I expect the pricing will rise in 2 years but that is a big IF. So, how do I buy her out? Money is tight with us and annuities will not optimally be mature for 5 more years, where we will double out income.
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Old 05-16-2014, 11:49 AM   #2
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Need more info. What is your end game? End up with house? End up with cash? End up with use of house? What is your sister's desired end game?

I live in a summer resort area and we see many variations on this issue.

One situation I know the son and his wife use the home for June and July and the daughter and her husband use it for August and September and they switch the following year. It works for them.

Other families have a schedule where heirs sign up to use the house certain weeks. Others are informal and any of them and their families are welcome to show up anytime.

I recall another situation where the sister could afford the property but was not interested in it and the brother was interested in it but could not afford it so they sold the property and split the proceeds.

I'll be facing this sometime down the road as the 5 of us will inherit a vacation home and there are varying degrees of interest in keeping it.
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Old 05-16-2014, 12:45 PM   #3
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It is easy, decide on the value of the house and pay your sister half that amount.

But, as they say, the devil is in the details... you are better off having your mother change the will to state that the house must go on the market when she passes priced at 10% below the average of three appraisers (one pick by you, one by your sis and one picked by the two appraisers).

Both you and and sis have option of buying 50% of both want it, if one does not want it, the other can buy 100%, if both don't want it, it goes on the market with the price dropping 1% a week until sold.

That is what I am trying to convince my parents to do.
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Old 05-16-2014, 03:25 PM   #4
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Reverse mortgage. Problem solved.
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Old 05-16-2014, 04:02 PM   #5
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Need more info. What is your end game? End up with house? End up with cash? End up with use of house? What is your sister's desired end game?...
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Old 05-16-2014, 04:17 PM   #6
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Does sister has emotional attachment to the CH?

( I am glad my parents are broke, and I have only one child. No need to split anything. )
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Old 05-16-2014, 06:40 PM   #7
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pb4uski asked the real question in the first paragraph of his question.

Do *not* delay getting the title changed to both of your names when your mom's will is probated or her trust executed. My husbands family is dealing with a vacation house that was left to 5 kids almost 30 years ago. They never changed the title. 3 of the siblings have died. Now they're trying to unravel and clear the title so they can sell it. It's a mess. And folks in their 90's are unclear as to how to proceed.

As far as your inheritance I see 4 options:
- You buy out your sister.
- Your sister buys you out.
- You sell it and split the proceeds.
- You share it - splitting the bills. (If you go this way make sure you have a clear agreement on the split on bills/use/taxes/etc.)
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Old 05-17-2014, 07:14 AM   #8
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Reverse mortgage. Problem solved.
Good idea, just give it away....NOT!
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Old 05-17-2014, 10:27 AM   #9
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How would a Reverse mortgage work in a buy out?
Why is it a NOT?
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Old 05-17-2014, 11:34 AM   #10
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Quote:
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Reverse mortgage. Problem solved.
Quote:
Originally Posted by pb4uski View Post
Good idea, just give it away....NOT!
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How would a Reverse mortgage work in a buy out?
Why is it a NOT?
I think I now see what heeyy joe meant - a mortgage rather than a reverse mortgage. IOW, your sister sells her 50% interest in the property to you in exchange for a mortgage loan and then you make payments on the mortgage loan to the sister. I can see where that would work if you can afford the payments and if sister is willing to accept payments rather than cash today. For that matter, if you can afford the payments then you might be able to just get a conventional mortgage and pay off the sister.

But you never answered the question of what is your end game and your sister's end game?

I thought heeyy joe meant have your Mom do a reverse mortgage - it made no sense for a 95 yo to do a reverse mortgage - not even sure if she could given that she doesn't live there.
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Old 05-17-2014, 11:39 AM   #11
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I'd just sell it for whatever the going market price for it may be, since that is what it is worth. Then split the proceeds with your sister, and go on with life.

But then, maybe I'm not as sentimental as most. Plus, nobody in my family has ever had a vacation home so perhaps the sentimental attachment to such a place eludes me.
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Old 05-17-2014, 11:43 AM   #12
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We spent every summer (from the day after school got out to the day before school started again) at our family vacation home so there are lots of memories of our formative years in those walls. I have trouble with the notion of it not being in the family but there are 5 of us and I don't care to co-own (even though we get along fine) - to me it is all or nothing and most likely will be nothing unless the other 4 have a change of heart.
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Old 05-17-2014, 12:14 PM   #13
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Refinance the house, and give your sister the money from the refinance. You pay the mortgage to the bank. Easy, clean, and everyone is happy.

Once you have the appraisal, you may not want to do the refinance, and can you back out with a minimal cost.

Just do a straight re-fi, no reverse mortgage (which would probably not be available to a non-owner occupied home).

Then, decide on what you will do with it. Live in it? rent it? Sell it? Mothball it?
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Old 05-17-2014, 04:25 PM   #14
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Gosh, maybe Mom has other plans and will live a few more years...After mom passes get it appraised and either take a mortgage out on it to pay off the sister or sell it.
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Old 05-17-2014, 09:24 PM   #15
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Gosh, maybe Mom has other plans and will live a few more years...After mom passes get it appraised and either take a mortgage out on it to pay off the sister or sell it.
OP's mom is 97.
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Old 05-21-2014, 11:41 AM   #16
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Update:
Niece has an attachment to house. Surf and snow bunny. So maybe sister will buy me out,

I have attachment in that it is a place with great recreational opportunities. A world renown salmon and steelhead rivers, lake fishing, ocean fishing, clamming and crabbing. Able to get broadcast OTA TV. etc. Mountains and beach within minutes of each other.
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