About your father's home. I think what you suggested to your family, i.e., turning it over to the mortgage company, may be the best way to go. If she's going to list it, there are fees that are associated w/listing w/a realtor. The questions that need to be addressed are...what is the house worth? Is someone going to go in and update/clean it up or sell as is? Maybe these are the questions you and your brother need to discuss w/your sister. I understand the sentimental angle, but someone will still purchase it from the mortgage company and love it just as much as your sister did.
Hey Job, thanks for your input! The reverse mortgage is 266k. We had a realtor look at the house and she said it is possibly worth 297k. The estimated closing costs and realtor fees are 23k. So the estimated net proceeds are 8k. I'm an architect and I know some flippers. I went through comps in the neighborhood and talked to my flipper friends and showed them pics and described the work that needed to be done (full kitchen reno, reno both bathrooms, new paint and flooring throughout, clean up exterior and landscaping, replace non-working HVAC system). The consensus we all came to was a basic renovation would be 80k+. Fully renovated comps in the neighborhood are going for 340k-360k. So renovating it is out of the question. I'm also EXTREMELY skeptical that it would sell for 297k in it's current condition. The interior has never been renovated and it was built in the 60's. It's only worth what it is because it's a large home in a central location. I would expect it to appeal only to flippers, and my flipper friends said they wouldn't touch it for over 220k.
I have explained ALL of that to my brother and sister! I told my sister DO NOT do any work on the house. What did she do? Hired some people to replace some windows, clean up the garage and work on the landscaping. I can't even begin to describe how hard-headed she is, I will talk to her on the phone and she will agree with everything I say, then hang up and do the opposite. I've told her I'm not contributing any money to doing any work on the house because it's a lost cause. She said she understands, but wants to do some cleanup work herself and try to list it just in case a nice family wants it.
I completely agree with you that if the mortgage company repo's it, they are of course going to sell it so how is that any different? It still ends up in the hands of a family. I said this to my sister and her reply was that it might take months and be falling apart by then. I mean she does have a point, it could become a target for vandals and such. But in my opinion the risk versus reward ratio is completely out of whack.
Next weekend we are all meeting there to go through it and remove everything we want. Then the realtor has someone that will clear out the rest for free or may even pay us a few hundred for the contents. After that my sister will list it and see what the response is. We have 90 days before the mortgage company starts the repo process. So she figures if there is no interest in a couple of months then we will inform the mortgage company we are walking away and it's all theirs.
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You are also correct that the bill collectors, etc., will come out of the woodwork once it's sold looking for money from the estate.
Exactly, and of course when selling a house there are always extra expenses you don't anticipate. I told her if she lists it then it needs to clearly state the price is non-negotiable and it's as-is. No allowances, no payment of repairs, etc. Because the price is barely break-even. Next weekend I will try to talk her out of it again. If she insists on proceeding, I am going to tell her it's all hers, whatever profit results from it she can keep because I'm washing my hands of it.
I can't remember if I mentioned this but I literally begged my dad not to do the reverse mortgage. They are a legal scam. They pay out a small amount of money (less than 100k in my dad's case) and charge outrageous interest rates and penalties so that by the time the person dies the family has almost no choice but to surrender the house to the mortgage company. So my dad got around 100k, which he burned through in short order, and now we (the estate) owe 266k. Wow.
Originally Posted by bttrfly
Wow. Scariest thought is that she was able to keep up the charade for so long. A cautionary tale, for sure!
I honestly still don't know what to think, I mean was it a charade? Or did she change in those years? Or is she just going through something? I mean look at my XW, she was a sweet, kind, gentle soul that loved me unconditionally for over 20 years and then transformed into someone who couldn't stand to be in the same room with me. I don't think that was a charade, she just changed. Maybe it was the same for XGF except on a shorter timeline. Much like with my XW though, I've accepted I'll never know "why" her behavior changed. And I'm fine with that, we had many great years together and I don't regret it but I need to move on to protect myself.
