Urgent: Getting A Mortgage To Buy Out Siblings?

aquilotta | 08:31 Wed 15th Jan 2014 | Personal Finance

29 Answers

Hi folks... Challenge for y'all.

A friend lost her mother. The mother's house is worth, at a conservative estimate, 600K. (Ten years ago, neighbour paid a million for flimsy 1970s build which had to be largely rebuilt, on a plot with half the view and a quarter of the size. Hence even in this current climate, 600K is modest estimate.)

Siblings are desperate to sell for a quick sale, and are forcing it through the courts to force a quick sale at auction. The auction price is estimated to be around 250K - a huge loss.

Therefore, if she could raise 200K, the friend would therefore be able to buy her siblings out, to then put the house on the real market for its real worth: even at conservative value, a difference of about 400K.

BUT my friend has been ill a number of years and is therefore not working. My question is: HOW can she raise a mortgage in those circumstances? The 200K would cover both the buy-out and a buffer sum on which to live while the house is on the market.

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aquilotta

Question Author

Hi Mark. The mother DID leave a significant sum to her carer daughter - in a codicil, as advised by the notary. The mother informed all three of her heirs what she had done, and why, and where the codicil was stored. The codicil mysteriously "disappeared"... The siblings claimed to have never heard of it... and simultaneously how dreadfully they'd suffered because of the injustice of their mother wanting to leave that sum to her daughter, and how they would never, never, never forgive either their mother, or their sister for it. Contradiction, much?

You may be right re the auction. But everyone with whom my friend has spoken has warned that the price is agreed beforehand within that particular developers' cabal, and that only in the rarest of circumstances is there an exception.

boxtops

so was the codicil not stored with the will, with a solicitor?

Prudie

Was there not executors, surely their responsibility is to ensure the house was sold at best value to the estate (not rushed through at a loss)?

aquilotta

Question Author

No, and no: the first on the advice of the notary, on the basis that the codicil regarded the mother's savings in the UK, whereas the Will deals with Italy, where the mother had retired. And no, Italian Wills don't have executors. Hence the siblings are free to force it through to a rushed sale at a major loss - and there's absolutely nothing that my friend can do about it UNLESS she succeeds in finding the money to buy her siblings out for the price they claim they want according to the auction price they've set for a quick sale.

aquilotta

Question Author

(PS, ooops, I just realised that I've been addressing people as "Mark" because the line above your answers is "Mark as best answer"... Doh!!! To all of you whom I have thus renamed... eek, um, ooops, sorry!)
#feeling decidedly toe-shuffly and red-faced!#

FredPuli43

Where is this house? In Italy or the UK ? If it is in Italy it passes under Italian law. If it is in the UK, it passes under English (or Scottish) law. It doesn't matter then what the Italian will says. If there is no British will directing its disposal, it must pass under the British law of intestacy, under international law principles, save in a case where there is an international agreement between the two countries whereby the general rule is abrogated

aquilotta

Question Author

Hi. My friend is British, and lives here in the UK. So do her siblings. But their mother's house is in Italy - subject to the Italian Will which their mother drew up as a resident of Italy. However, because my friend and her siblings live in the UK, she feels that it should be possible to raise the money, and pay them off, here in the UK...

twix123

With the property being situated in Italy, will HMRC be interested in why a property valued at c£600k is sold for £250k, with respect to IHT (and what value was entered when the original forms were submitted)?

aquilotta

Question Author

Hi Twix. No idea. Suspect that since the mother had permanently retired to Italy, it falls under Italian law/taxes/IHT, not British, but no idea whether the Italians take note of such a discrepancy or not. Suspect not.
And I understand that IHT in Italy is exceedingly low anyhow: I believe my friend said that it was paid when the Will was first publicised by the notary, and that it was in the region of 2000 Euros?

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