Selling my Dads house in a hot market - spend $$$ to fix up or sell as is

[AdironRider]

Mine was on the North Shore of Mass, so not as hot as Seattle, but not in the doldrums either. It sat for four months.

Foundation issues scare people IME. If it was replace the water heater I'd say pass as well.

[Art Shirk]

I feel like Realtors are heavily biased to whatever is going to raise the final sale price of the home, as thats where they take their %.

As oft said, maybe the bad ones. Oft helped me buy my place and told me I should offer less than what I was suggesting, which obviously means his chunk of change would have been less and the chance of acceptance may have been a bit lower. There are shitty realtors, lawyers, mechanics, etc. Find a good one and they're more than worth their money.

[XXX-er]

Have considered using it was a rental property (the way the rooms are configured it has a very easy ability to be split into two units - even plumbing and electrical are along walls that would be shared for baths and kitchens) but not sure if I want to get into that business. I'm tempted but the siblings are wary.

A lot of the cheap and easy work (carpet or laminate, paint etc) I will be doing.

yeaH do you really wana be a LL?

Another big question might be how much do you trust your siblings to stay chill ? Splitting up the inheritance is also the most likely time for shit to go sideways in the family dynamic, RE goes up and it goes down so its a good time to get er sold fast, pay good money for a good lawyer who specializes in probate and get everyone paid off off ASAP

[Thaleia]

yeaH do you really wana be a LL?

Another big question might be how much do you trust your siblings to stay chill ? Splitting up the inheritance is also the most likely time for shit to go sideways in the family dynamic, RE goes up and it goes down so its a good time to get er sold fast, pay good money for a good lawyer who specializes in probate and get everyone paid off off ASAP

That's a really good point - A while back I over heard an estate lawyer explaining that the number one cause of siblings becoming estranged stems form disagreements and general ugliness when settling an estate. In our case one sibling (the poorest one) is living in his house. I offered to allow her to remain for up to six months which I believe she was genuinely thankful for and I do see she is making plans to get moving. (she's a single mom, finishing school, and taking the death the hardest, really didn't want to force her out immediately. Hope this doesn't burn me)

[Self Jupiter]

As oft said, maybe the bad ones. Oft helped me buy my place and told me I should offer less than what I was suggesting, which obviously means his chunk of change would have been less and the chance of acceptance may have been a bit lower. There are shitty realtors, lawyers, mechanics, etc. Find a good one and they're more than worth their money.

This. A great realtor will understand the market nuance and advise your options on what to do. In my marketplace, you can invest a few hundred, maybe get your hands a little dirty and see a 100% return on that investment.

[H0G]

I'm a Realtor here in Denver that flips as well. If it's livable, you should just list, BUT that is market dependant. I would have made the same or more money on my last 2 flips if I would have just listed "as-is." They were emerging neighborhoods, and I became the highest comp in both, however looking back, I would have saved time and money just selling them.

I'm now just buying off market and listing it unless the deal is really good.

[oftpiste]

Thanks Art.

What a lot of people who take this "higher price because the commission will be higher" POV don't stop to count the literal pennies that we might earn on a slightly higher selling price. It just ain't worth it.

As oft said, maybe the bad ones. Oft helped me buy my place and told me I should offer less than what I was suggesting, which obviously means his chunk of change would have been less and the chance of acceptance may have been a bit lower. There are shitty realtors, lawyers, mechanics, etc. Find a good one and they're more than worth their money.

[XXX-er]

That's a really good point - A while back I over heard an estate lawyer explaining that the number one cause of siblings becoming estranged stems form disagreements and general ugliness when settling an estate. In our case one sibling (the poorest one) is living in his house. I offered to allow her to remain for up to six months which I believe she was genuinely thankful for and I do see she is making plans to get moving. (she's a single mom, finishing school, and taking the death the hardest, really didn't want to force her out immediately. Hope this doesn't burn me)

random ramblings:

yeah so when the sibling is living in the house it is still costing the estate right, consider one of the siblings might not like that ?

Consider that until the house is sold its gona idle along but still cost money, my mother's condo was still costing condo fees/utilities/insurance yada fucking yada probably to the tune of 500$ which is all gona come out of the inheritance until its sold

I just had diner last night with a brother and sister dealing with their crazy youngest sibling who has court orders/ court actions and the old man isnt even dead yet, there will be hell to pay when he does go cuz there is a LOT of money at stake, this kind of shit goes on all the time.

My grandmothers estate took >10 years for me to get a paltry few hundred and it ate my father up, we figure he had a stroke over it

I wasn't really that down with throwing 20K at the condo but sis presented a good case, it was only 1/3rd of 20K and the faster it all got done the faster I could pay off my mortgage, consider yeah YOU can do some of the work but are you getting paid, if you got siblings so what are they doing, why not hire tradesman/men cuz the bill will be split by the siblings ?


sis presented a good case, she also did all the work so i went along, I'm 800kms away so I don't really know if it was a good idea but the checks all came really quick and I just cashed them as they came in

So when mom passed we paid 6K to hire the head of the estate lawyers association, very good very fast, she files in a different jurisdiction way out of town becuz she knows its faster ...probate in 1 yr 9 months

[old goat]

Consider that any work you do will delay sale, and in a hot market good contractors can be hard to find. Better to let the buyers have the headache of dealing with construction.

When we sold my mother's condo my brother and I were joint trustees. I handled everything but the house. His wife handled that--she used a realtor her mother liked who grossly underpriced the house. My wife did some research, called the realtor with what she thought was a fair price and the house sold at that higher price within a month. Now my wife and my sister in law don't talk to each other, which is no big deal AFAIC. My brother and I are fine with each other. My advice re estates--keep the in-laws out of it.

A house that's having construction done for sale is paying utility bills, HOA fees, etc. Also, if the market goes down while preparing a house for sale the other beneficiaries will at best be mad at the executor and at worst will sue. Sell everything--stocks, real estate, etc ASAP. Most people will be more upset by losses incurred by delaying sales than by gains not realized if the market goes up after the sale.

[OldLarry]

People would rather buy a house with old carpet, kitchen, etc and fix to their taste then buy a house with recent remodeling that they don't like, especially since people usually cut corners when remodeling to sell. Other than painting everything off white that badly needs paint or is some other color, fixing up won't pay for itself, especially in a hot market. In a hot market a lot of people will be looking for houses that need work because they can't afford a house in pristine shape.

This

[hutash]

Not true. Many buyers want everything neat and tidy so they can just move in, not all, but a lot.

As I said, I am just the opposite. We bought the house that needed paint, major landscaping, floors etc. It dat on the market for many many months, so we got it at a steal. Spent twenty years redoing it exactly as we wanted it. Unfortunately it wasn't fire proof.

Neighbor across the street looked at a house, decided it was too much work, it was bought by a flipper who did a really shitty job of cleaning it up, and then the neighbor came back and bought it for $50,000 more then when he first looked at it, and was happy to do so...foolish but common.

[hutash]

...and an old realator trick is to bake chocolate chip cookies in the house when doing an open house.

[powdrhound]

Dad is Really missing mom. It won’t be a lot longer...
His house needs a new kitchen. It needs new windows and sliding doors.
I want to leave that to the energetic young couple that will love this Excellent Location. (Has pretty low HOA’s, for community swimming pool and security patrols.)
My brother(‘s wife) thinks we should do some of it.
I am the executor. We are both Trustees. It will be interesting.

[liv2ski]

Full day cleaning crew and just strip any old carpet down to the subfloor. Id rather have that vs. a cheap carpet job.

I it hasn't already been said, 99% of the lenders will require floor covering prior to closing, so having bare wood will require something done prior to closing.

[fastfred]

don't waste your time and effort trying to pimp the house out for sale, especially if your in a good real estate market

if cleaning it up and making the house boss is your kind of hobby and you think that stuff is fun then take six months of your life and do it, but it's really not worth it

Here is what I'd do, consider your price point and your potential buyer
are they going to nit pick the home inspectors report? It might be a worth the money to have a preinspection and take care of the things on their list
empty the place out
do the appliances need to be replaced? if so buy cheap, don't get nice appliances with shit cabinets and counters
paint, higher a cheap painter have them do a shitty job, don't waist money on a good paint job
do not spend a weekend installing click together dog shit laminate flooring because you'll save money, it's seems to be the new "thing" cheap laminate flooring is just that, and on top of it as easy as it sounds you'll end up doing a shitty job
purchase new cheap ass carpet and have it installed
if a toilet leaks replace it, don't buy the shittiest toilet out there either

most all fix and flips are total garbage because someone is trying to make as much money as they can with as little costs as possible. I've never seen a decent fix and flip. No matter who you are or how great you think you are at picking finishes fix and flippers suck donkey balls. Hire a professional, but people can't stomach the cost of a quality job

[XXX-er]

I bought my place cuz it was all done so i didn't have to spend a penny which was good cuz I didn't really have much $ at the time SO just move in and start collecting rent from the basement suite, I don't think everybody wants to play Martha Stewart to remodel a house and i know that not everybody should be allowed to own tools

...and an old realtor trick is to bake chocolate chip cookies in the house when doing an open house.

I used the Black and Decker breadmaker method myself

Its my understanding that having an open house's doesn't really sell that particular listing, what it does is expose the realtor to new customers & contacts

the right price is gona sell a property

[oftpiste]

Its my understanding that having an open house's doesn't really sell that particular listing, what it does is expose the realtor to new customers & contacts

This.

[SLCMunchie]

Just went through this unfortuantely. here are my items to consider:

Mortgage- remember that if the house isn't paid for then you'll have to make back your mortgage payments with improvements. in my case- $2,000/mo wasn't worth it to wait until the market got hotter or do improvements.
basis- you'll pay potentially 39% taxes on any gain you receive in the improvements you add. for example, at death the house was worth $300,000. you make improvements and sell at $400,000, you'll have to pay $39K in taxes because there was a gain to the estate in that asset. This is a big speculation and cases and details vary. in my case, this what i'm being told that it was a good thing to sell quickly.

i'm sorry to hear of your loss and i wish you well as the executor- that life aint easy...

[el hefe]

This.

2nd this. I get the new realtors in the office to host opens at my listings. Would rather be skiing.

[XXX-er]

Yeah the 1st thing the RE agent does at any open is ask if they have an agent, hand them a card try to show them other houses

as soon as the Parent dies you still get investment income but in Canada you lose the monthly OAS and CPP and so the estate will probably start to bleed red ink without that income so that money now going to pay for an empty house ... is your inheritance. There is a lot of shit to being an executor, my sister told me all the stuff that was going on so I could steer things a bit by saying yay or nay but I am really glad i didnt actualy have to do anything but cash some checks

to anybody reading this thread for whom dealing with an estate is getting close one of the best things you can do is get your parents financial affairs in order BEFORE they go, what we did is about 2 years before she passed I came down and we went to all the banks she dealt with to have our names put on the accounts which in Canada means almost all the money already belonged to the siblings when mom passed, my sister was keeping an eye on Mom but she still managed to fuck up a few things, i can't imagine how it would have been if my sister wasnt there, in any case ... I started getting checks prettty quick

Unfortunately we couldn't really do that with the condo

[highangle]

That's a really good point - A while back I over heard an estate lawyer explaining that the number one cause of siblings becoming estranged stems form disagreements and general ugliness when settling an estate. In our case one sibling (the poorest one) is living in his house. I offered to allow her to remain for up to six months which I believe she was genuinely thankful for and I do see she is making plans to get moving. (she's a single mom, finishing school, and taking the death the hardest, really didn't want to force her out immediately. Hope this doesn't burn me)

The estate can charge her a nominal rent, and take the loss.
On that note, you can also charge the estate for your services as executor/painter, which may be beneficial to the estate.

Is the estate an "undivided interest" (or whatever its Canadian analogue is called)? Or are all the heirs due a share prescribed in the will/tontine?

[old goat]

That's a really good point - A while back I over heard an estate lawyer explaining that the number one cause of siblings becoming estranged stems form disagreements and general ugliness when settling an estate. In our case one sibling (the poorest one) is living in his house. I offered to allow her to remain for up to six months which I believe she was genuinely thankful for and I do see she is making plans to get moving. (she's a single mom, finishing school, and taking the death the hardest, really didn't want to force her out immediately. Hope this doesn't burn me)

Dad is Really missing mom. It won’t be a lot longer...
His house needs a new kitchen. It needs new windows and sliding doors.
I want to leave that to the energetic young couple that will love this Excellent Location. (Has pretty low HOA’s, for community swimming pool and security patrols.)
My brother(‘s wife) thinks we should do some of it.
I am the executor. We are both Trustees. It will be interesting.

See what I said about keeping the in-laws out of it?

Just went through this unfortuantely. here are my items to consider:

Mortgage- remember that if the house isn't paid for then you'll have to make back your mortgage payments with improvements. in my case- $2,000/mo wasn't worth it to wait until the market got hotter or do improvements.
basis- you'll pay potentially 39% taxes on any gain you receive in the improvements you add. for example, at death the house was worth $300,000. you make improvements and sell at $400,000, you'll have to pay $39K in taxes because there was a gain to the estate in that asset. This is a big speculation and cases and details vary. in my case, this what i'm being told that it was a good thing to sell quickly.

i'm sorry to hear of your loss and i wish you well as the executor- that life aint easy...

If you put 30,000 in improvements in the house those improvements should be deductible from any gain realized from the improvements. But I'm pretty sure you can't deduct more than the increased value--IOW if you put 30K into the house and sell it for 20K more you can only deduct 20K. The problem is proving what the house was worth at the time of death.

The estate can charge her a nominal rent, and take the loss.
On that note, you can also charge the estate for your services as executor/painter, which may be beneficial to the estate.

Is the estate an "undivided interest" (or whatever its Canadian analogue is called)? Or are all the heirs due a share prescribed in the will/tontine?

If you charge below market rent I don't believe you can charge that as a tax loss against the estate, and in any case unless the estate is huge there won't be any estate tax to deduct from. Certain losses not deductible from the estate tax, if any, can be carried over to the individual beneficiaries' personal tax returns. Passive losses have to be deducted from passive gains. My recollection is that when my brother in law dawdled in selling my MIL's stock and it went down (the only down period in the previous or subsequent 5 years) we were able to deduct our share of the loss from capital gains on our personal return. But you can't deduct the loss against wages for example.

I believe if someone is paying below market rent they should declare the difference as income--seems unlikely the IRS would figure it out though.
Bottom line is--I'm not an accountant. If you are considering letting your sister stay and/or doing improvements you should consult an accountant ASAP. If you have a probate attorney they may also be able to advise. Also consider that the more complicated things get the more legal and accountant fees you are going to pay.

Charging more than a nominal amount for handling the estate, while perfectly legal, is a good way to break up a family.

One final suggestion-if there are significant assets other than the house, make some partial payments to the beneficiaries soon and wrap the estate up as soon as reasonably possible. The lawyers like to keep these things going to add up the billable hours. Same applies to the sale of the house--if you can give your sister a good portion of her share of the proceeds soon it will make it easier for her to relocate,

[justinspau]

Done.... good luck

Sent from my van down by the river. Using a NewSchoolers hack... sick I know.