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[MUSIC PLAYING] Brought to you by the EveryDollar app, start budgeting for free today. So I got kind of a tough family money-related question. I don't know how to approach a family member as far as regards to money. The long story short, unfortunately, my mother passed away, and my uncle has a 50% stake in her house. And he came with me with an offer to cash me out. But it was about a couple hundred thousand dollars low, lower than what market analysis reports and multiple reloaders that I've talked to have said that place is worth. And I don't know how to give them the tough answer or ask them, just, hey, this seems really low without burning a family bridge. So I'm just having that stuff. So, wait a minute, if you go back to your uncle and say, sure, I'll be happy to sell you. But I'll sell it to you at just a little bit below market value, which is a whole lot more than you're offering. You think he's going to get mad and run away mad? Essentially, and then the house would go on the market. It was my grandfather's house. OK, put it on the market. Years ago, to where? Put it on the market. I'm trying not to burn a family bridge. No, you didn't burn a bridge. If he acts like that, when you do that, he burned the bridge. You can't choose who burns bridges, except you. But you're not burning a bridge. You didn't say, go to hell. You said, I want a price. Yeah, that makes sense. If he gets mad, he's the one burning a bridge. You can't control him. But we're also not going to be scared of his reaction by $200,000. Especially if you have it printed out and you can show him, say, hey, I did a little research here's market value. If you can show me what you're looking at, make it more of a conversation rather than some sort of a-- I'll be happy to sell it to you at a little bit of a discount, but not this steep. And if you don't want to do that, it's OK. Let's just put it on the market and we'll just both get our money out of it. Yeah, because I guess the other, I'm kind of an issue, if he doesn't live up the property to where he would have to, because he owns 50% of it, he would have to move everything. That's his problem. It's not your problem. OK, so let's walk back to-- how old are you? I'm 25. OK. And how long has your mom passed? About five years ago. Oh my god, that's been going on a long time. Yeah. So he's been sitting there. Has he been paying you rent? No. She's living in the house rent-free for five years. Yeah, the house is paid for. Yeah, I know, but he's not paying any rent for your half. No. You think that's fair? Well-- Do you think that's fair? That you take your 20-year-old nephew, whose mother just died and don't give him anything for his half of the asset. I think your uncle's a skunk. Yeah, I think you're-- If I have a 20-year-old nephew and his mom just died, my job is to take care of him, not pee on him. Yeah. Right? No. Yeah. Hello, son. Seriously. And you're scared of this guy. I was just about to say that. This guy is a problem. All right, now what's the house worth, honey? Everybody said 900 on the low end. OK, so let's pretend it's worth 900. It has no debt on it, right? Yeah, so if you sell it, you guys are going to spend somewhere around 10% of that in selling expenses. So it's going to cost you close to 100 in selling expenses. So you're probably going to net 800. So your half is worth somewhere around 400 if you all sell it. Yes. What did he offer you? He offered me 320 or 360. OK. That's not bad. All righty. OK. You said it was hundreds of thousands off. It's not. Your half after selling expenses, if you all sold the house, is worth some-- I mean, the thing's worth 800,000, right? After expenses. OK, it's worth 900 if we take 10%-- 12% of alpha expenses in negotiation off of a praise value. It's not going to be that far off. You know, if you pay a 6% commission as an example, if you had other miscellaneous expenses, you negotiate a little bit, you pick up the title policy for the buyer, whatever. And your net profit on this property is going to be somewhere in the 800 range. Your half's worth somewhere around 400. He offered you 360. Yeah. Take it. That's not bad. All righty. Where did you get that you were getting 100,000 or 200,000 less than you it was worth? I'm just talking with people trying to help you help you help. No, how did you get there? I mean, the numbers you gave me-- you see how I just did what I did? Yeah, seeing how you're doing that. Unless you didn't think you were going to have any expenses selling the property. You didn't account for expenses. Yeah, but even then it's only $50,000 is your half of that. Yeah, half of 900 is 450, and he offered you 360. So you thought that 100,000 was what was off. Well, because the realtor is on the low end of said 900 to where the house next door similar square foot had sold for 1.1 per the low end of 900 to where it just seems a little off. Well, wait a minute, the realtors are off? Well, the numbers are a little low at 360. This seems like-- No, they're $40,000 low if the house is worth 900. He's saying it could be-- what you're saying is based on comps, it might be worth more. No, you just told me it's worth 900, and then you changed that. So which number are you going with that is the value, son? On the low end is 900, the high end if you 1.1. OK, so say 1.1-- No, no, no, no, no, no, no, no, no, no. You are not-- you don't get to have a 20% range in value on a million dollar house. You need to figure out what the house is worth, OK? If you want to be fair, exactly fair, here's what I tell you to do. Order an appraisal, pay 500 bucks for an appraisal, find out exactly what the house is worth, and we're talking about ranges of 100 to 1.2. That's not even-- several people in that conversation don't know what they're talking about. The thing's worth something in there, but that's not a range that you don't-- if you're getting ready to put a house on the market, you don't go, what's worth somewhere between 901.2. You got comps, this thing's worth 1.15. And we're going to put it on the market at 1.2 in hope. You know, you figure out what it's actually worth. So let's get an actual appraisal or a very, very professionally done high quality realtor doing a comparative market analysis, either one. Then take 88% of that number. You follow me? For 12% for expenses, 88% of that appraisal number divided by 2, and that is what your half is worth. And if you do that and the appraisal is 900, the 360 offer is not a bad offer. And I'll get up off your uncle then. That's what I would do. Create your free every dollar budget today, the simplest way to budget for your life.
