Just Inherited A House

[Ellie]

Double post - durr

Edited May 17, 2010 by Ellie

[Ellie]

Actually a third of a house - my mother died recently and left it to three of us. What to do? Sell it (if we can) and bank the cash (and risk losing it?) or hang onto the asset? At least we would always have somewhere to live as its all paid for.

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

I am not daft enough to rely on internet forums for financial planning advice but I wonder what you guys would do. Maybe we won't have a choice anyway if the market does tank.

E

[scepticus]

Actually a third of a house - my mother died recently and left it to three of us. What to do? Sell it (if we can) and bank the cash (and risk losing it?) or hang onto the asset? At least we would always have somewhere to live as its all paid for.

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

I am not daft enough to rely on internet forums for financial planning advice but I wonder what you guys would do. Maybe we won't have a choice anyway if the market does tank.

E

SELL

[Hip to be bear]

Actually a third of a house - my mother died recently and left it to three of us. What to do? Sell it (if we can) and bank the cash (and risk losing it?) or hang onto the asset? At least we would always have somewhere to live as its all paid for.

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

I am not daft enough to rely on internet forums for financial planning advice but I wonder what you guys would do. Maybe we won't have a choice anyway if the market does tank.

E

You are asking this motley crew of cynical, bearish, STRing, doom mongering, tin foil hat wearing, house price crashing lunatics for an answer to this question?

Surely you have been here long enough to know they will say sell! Sell! SELL!

For a balanced view you know need to go to Singing pig and ask the same question over there. Try MSE if you haven't had enough hugs recently too!!!!!!!

Personally.......

SELL!!!!!!!!!!!!

YOU NEED A DIVERSIFIED PORTFOLIO: BUY GOLD, GUNS, BEANS AND TINFOIL!!!!!!!!!!

Edited May 17, 2010 by Hip to be bear

[Guest KingCharles1st]

I'm not saying you should sell- because actually you have a HOME there- god if only I owned one of those- but...

DO NOT drop the price after a couple of weeks- go straight in where you want to pitch- otherwise the bad smell of a price drop will forever follow the property as it slides inexorably downwards.

Maybe try a teaser small ad in a local paper before going through an EA, to see if there is anyone seriously looking for exactly what you have on offer- you never know.

Edited May 17, 2010 by KingCharles1st

[nohpc]

I'm not saying you should sell- because actually you have a HOME there- god if only I owned one of those- but...

DO NOT drop the price after a couple of weeks- go straight in where you want to pitch- otherwise the bad smell of a price drop will forever follow the property as it slides inexorably downwards.

Maybe try a teaser small ad in a local paper before going through an EA, to see if there is anyone seriously looking for exactly what you have on offer- you never know.

If it's split three ways it's a joint decision.

Otherwise I would say never sell property if you don't have to.

Depends what your attitude to risk and paper losses is.

[The Eagle]

If it's split three ways it's a joint decision.

Otherwise I would say never sell property if you don't have to.

Depends what your attitude to risk and paper losses is.

Mostly agree, if it's mortgage free and you don't own a house already, then I'd keep it.

While nothing has been written in stone yet, there is a serious risk of strong monetary devaluation in the next few years, in which case your cash will become next to worthless, while a mortgage free house will always be a store of value.

OTOH if there is still a mortgage on it, then sell it as fast as you can.

Edited May 17, 2010 by wise_eagle

[Ellie]

Mostly agree, if it's mortgage free and you don't own a house already, then I'd keep it.

While nothing has been written in stone yet, there is a serious risk of strong monetary devaluation in the next few years, in which case your cash will become next to worthless, while a mortgage free house will always be a store of value.

OTOH if there is still a mortgage on it, then sell it as fast as you can.

Yes, as there is no mortgage on it, that is the quandary. It is a three way decision which doesn't help, but the spectre of monetary devaluation makes me nervous. On the other hand, seeing it devalue to its rightful level would mean giving up a wad of money. None of us three are that affluent.

[Guest Steve Cook]

Actually a third of a house - my mother died recently and left it to three of us. What to do? Sell it (if we can) and bank the cash (and risk losing it?) or hang onto the asset? At least we would always have somewhere to live as its all paid for.

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

I am not daft enough to rely on internet forums for financial planning advice but I wonder what you guys would do. Maybe we won't have a choice anyway if the market does tank.

E

If it's owned outright, I would either:

1) market aggressively now at a price that gets rid quickly and then split the money.

or

2) let it out and put the rental money into a high interest account for a decade. At the end of that period, have a meeting with the others and decide whether or not to sell then.

If I were in your position and had to choose one of the above two options, I would probably choose option 2

Edited May 17, 2010 by Steve Cook

[Lagarde's Drift]

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

Where is it in Bristol? Ah, I'll give you 100k for it.

[The Eagle]

On the other hand, seeing it devalue to its rightful level would mean giving up a wad of money.

No it wouldn't mean that, since any other house you would want to buy with the money will have devalued equally too.

Of course if you didn't intend to use the money for another house, but rather to live the high-life, then you might as well sell it now!

[betterToDo]

How very sad for you.

In terms of the house, I'd say if there's a foreseeable practical use for any of you, keep it. Otherwise, I'd get rid of it in fairly short order.

[buyerbeware]

Actually a third of a house - my mother died recently and left it to three of us. What to do? Sell it (if we can) and bank the cash (and risk losing it?) or hang onto the asset? At least we would always have somewhere to live as its all paid for.

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

I am not daft enough to rely on internet forums for financial planning advice but I wonder what you guys would do. Maybe we won't have a choice anyway if the market does tank.

E

Murder your siblings and move in.

[tiggerthetiger]

Will the three of you be able to agree on one course of action. If you keep will you rent it.? If you keep will one of you live in it.? Then that person has to buy the other two out or pay rent to the other two.

If you buy the other two out do you have the cash, or need to take on a dreaded mortgage.?

These are questions you have to asnwer yourself first.

[dipstick]

What do you intend to do with the house if you keep it?

If it's sat empty then you will be paying council tax and still have to maintain it.

Your siblings may want to consider renting and getting an income from it but that will still mean splitting any proceeds/hassle 3 ways.

Will there be a long term market for rental in your area?

Are you likely to get into rows with your siblings about it?

Lots of things to consider before you make a move.

[Confounded]

Yes, as there is no mortgage on it, that is the quandary. It is a three way decision which doesn't help, but the spectre of monetary devaluation makes me nervous. On the other hand, seeing it devalue to its rightful level would mean giving up a wad of money. None of us three are that affluent.

You have just answered your own question in this post.

I am one of the idiots the whole world laments for being virtually all cash, however no one can tell you the exact outcome of the mess we are in so my approach has been to wait and see.

If it is deflation my cash will increase in purchasing power (I am principally interested in it purchasing power against houses), if it is high inflation then I will pay a small price for being late to the party and still be able to protect a majority of my wealth relative to the point I sold in 07 (against commodities, hard assets etc).

In your situation selling is a no brainer, if only to absolve the complication of owning part an asset (would the part rent you receive change your life compared to the hefty lump sum?).

If you are able to extract your share and then decide that housing is the best place for your money you can then put your share of the money into your own property. If you decide equities are the best place you have the choice to invest there, in short although there are clear risks of being in cash long term, short term while things are so uncertain cash give you speed and flexibility in your decisions.

Edited May 18, 2010 by Confounded

[Pent Up]

if was me I'd sell it quick! Take the money, you might not see prices as high as this for a decade.

[Tired of Waiting]

Actually a third of a house - my mother died recently and left it to three of us. What to do? Sell it (if we can) and bank the cash (and risk losing it?) or hang onto the asset? At least we would always have somewhere to live as its all paid for.

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

I am not daft enough to rely on internet forums for financial planning advice but I wonder what you guys would do. Maybe we won't have a choice anyway if the market does tank.

E

Firstly, sorry for your loss.

Regarding selling or not, it depends on your ability to manage cash investments, and on your maturity - it is very easy to go spending it away.

Properties should fall (see charts below), but if you don't know finances and economics very well (particularly in these crazy times), and if you are not a very responsible and self controlled person, then you may lose even more if you cash it, perhaps even the whole lot, if you go spending just a little here and there. After some 10 years it's all gone.

________________________________________________________________________________

Japan: Prices of land and housing falling for 17 year, since 1992, to the present.

Notes:

1) The chart on the left shows price changes, not price levels. It means prices falling for 17 years.

2) Japan has a population density higher than Britain.

UK total debt (gov. + households + companies) is already at Japan's level, but still climbing.

Edited May 18, 2010 by Tired of Waiting

[the flying pig]

find out how much money you would earn per year [before costs] if you were able to let it out [with no voids] at a realistic rental rate.

divide that number by how much you could sell it for.

if that fraction is higher than about 7%, definitely keep it and rent it out.

if it's 5% or less, sell it.

if it's somewhere inbetween then toss a coin.

Edited May 18, 2010 by the flying pig

[bb7t6]

If you'd inherited 100%, then I'd reckon you should look at potential rental income. However, as it's split 3 ways I reckon you're better off selling and splitting the money evenly just to prevent any future disagreements and fallouts with your siblings over the ownership and management of this place. Use some of the mony to pay down yor own mortgage and put some away in savings, but don't be too sensible with it, you could get run over by a bus tomorrow!

Edited May 18, 2010 by bb7t6

[Tuberider]

Keep it and let it out.

Save the money in a high interest account. When the market begins it's second leg down (it's coming) wait for the dust to clear then re-mortgage that bad boy and buy another one, or even two if you can. Chuck in another few grand each if you have it to bring down the amount of capital you need to borrow. Long term you should be thinking of leveraging that one house to get 3.

That's what I did with my siblings, and we are doing well out of it. We started with one, now we have 3, and waiting to buy more in 2011 or 2012.

Don't overthink it too much.

Too many people on this site over-analyze things and end up too sh1t scared to do anything.

[TheEmperorHasNoClothes]

Actually a third of a house - my mother died recently and left it to three of us. What to do? Sell it (if we can) and bank the cash (and risk losing it?) or hang onto the asset? At least we would always have somewhere to live as its all paid for.

Mum paid £150k for it in 2004, EA advises marketing it initially at £196K. I think this is optimistic so after a fortnight I am going to drop it to £189K if no offers. Its in Bristol btw. None of us are desperate for the cash though it would come in handy.

I am not daft enough to rely on internet forums for financial planning advice but I wonder what you guys would do. Maybe we won't have a choice anyway if the market does tank.

E

You'll get a lot of advice here. Being vested interests in a property crash, we are likely to say SELL SELL SELL!

Seriously though, I would say it depends on you and your siblings situations. E.g. are you all home owners, would any of you want to own the house in it's location, what does it cost to rent an equivalent house, tax considerations etc.

[Dorkins]

Sell as quickly as possible and put 30% in physical gold, 30% in cash savings, 30% in NS&I inflation-linked bonds, and maybe 10% in equities. Then walk away and try not to think about it. Under almost any scenario you should still have enough left to buy 1/3rd of a house in a few years' time and if you're lucky you may be significantly up on the deal.