My father died recently and left me and two siblings with a house without a mortgage. I am about to be declared an executor. My brother goes home every weekend for a "stay", but my sister and I live in other states and can only return to our hometown a few times a year.
My sister and I think this is the right time to sell the house and split up our inheritance, but my brother thinks we should keep it as it is increasing in value. Of course, there are some expenses for maintenance, insurance, taxes, and electricity.
Is it a better climate to hold or sell as an investment and then put the money in stocks or retirement accounts? I'm 65, brother and sister are 60 and 57.
Dispute over the family house
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I am so sorry for your loss and I can understand the uncomfortable situation you are in now. My colleagues at MarketWatch often hear from readers in similarly stressful situations. As the executor of your parents' estate, you have the unenviable job of dividing up your possessions while balancing the emotions of others – all while grieving alone. I hope you take the time to yourself to process your emotions surrounding your father's death.
As to business, I understand that you suspect your brother has an ulterior motive in suggesting that the family keep the house. After all, he's the one who essentially inherited a vacation home that he can use alone, and he seems to be only partially responsible for the upkeep and taxes. You are undoubtedly upset with this facility.
The real estate market remains hot right now, and homes in many parts of the country are seeing multiple offers driving the final sale price even higher than you might list. In the suburbs in particular, the housing market is so scarce that buyers will bid for virtually every property that comes on the market.
This could be good news for you and your siblings as it may mean you won't have to do a lot of work to finalize the apartment list. Of course, all properties are local. They don't say where your father's house was and that could be a factor in whether or not it is worth selling. In a hot market like Boise, Idaho, it's practically a no-brainer that you should sell. However, this may not be the case in rural Iowa.
Homes in many parts of the country are seeing multiple offers driving the final sale price even higher than you might list.
Basically, your brother is right in his assessment that the home will continue to increase in value. It remains to be seen whether a bubble will form in real estate. Lots of economists say no, but some, burned by the recent crash in the real estate market, advise Americans to be more cautious about the real estate market. Some watchers believe the housing market may cool as buyers become increasingly concerned about affordability.
But even if the bubble bursts, that doesn't mean you will lose money on your home. You don't have to worry about a mortgage, and if you can hold it on long enough, you will see its value grow whether or not there is a downturn.
Given all of this, I want you and your siblings to sell the house unless you live in a part of the country where the real estate market isn't that hot. Then you can split the money among you to do what you want with it.
If your brother uses the house more, he should pay more maintenance and property taxes.
Let's say your brother decides that he really wants a second home or just an investment property over the weekend. Then he can use his share of the proceeds from the sale of your father's house as a down payment on one. If he really wants to keep your late father's house that bad, he can offer to buy you and your sister out. Then you and your sister can move the funds from the sale of the house into more liquid investments, which can come in handy as you near retirement.
If you keep the house you need to set clear boundaries and have a coordinated plan of what to do with the property. It is not appropriate for your brother to use it as a vacation home for himself while you and your sister pay equal parts for maintenance, utilities, and taxes. If he uses the house more, he should pay more.
Should you all keep the house, I strongly recommend converting it into an investment property and renting it out – either to long-term renters or through a platform like Airbnb
With your brother around, he could help manage the property – perhaps for a larger sum of profits – and then hopefully all of you can have a nice residual income after the expenses are settled. Alternatively, you could outsource it to a property management company.
Then, a few years later, you can pick up the conversation about a sale again.