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Old 10-03-2010, 07:09 AM
Raphael Raphael is offline
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Bequeathed house dispute, auction or buy out other party.

Dad died last year, left his home to me and my brother.
He wanted one of us to keep it.
He did not want it sold.
His first Will left it to my son (8yrs old), but he wrote another leaving it to me and bro.
I promised dad we would not sell it, Id buy bro out and dads home becomes my IP #3. (a keeper of course). Dad was OK with this as he understood we could not move into his home. (we have our own)

Bro wants to auction for max cash, I want to carry out dads wish to keep property in family, & buy bro out.

Bro has rejected my offers.

Brother told me he can take me to NSW Supreme court to force me to auction. Is this correct, and what justification does he need to do this?

Moving forward, I need strategy advice.

My offers so far have been verbal, ill put one in writing, so we can show court we made reasonable offers and my bro is being unreasonable. Im not thinking straight, im all messed up with this issue.

I see buying out bro as win/win/win, all boxes ticked.
1/ Dads wish carried out, house still in family
2/ another IP for family, eventually handed over to my son, (dads first wish)
3/ Bro with pocket full of cash.

Last edited by keithj; 13-03-2010 at 06:19 PM.
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Old 10-03-2010, 07:40 AM
wylie wylie is offline
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Could you take it to auction, and buy it yourself at auction?

If he is prepared to take his own brother to the supreme court, then what type of relationship do you have?

Using totally made up figures, say you get a valuation and it comes in at $600K value. You could buy him out for $300K or you could allow it to go to auction and possibly it will go higher than $600K, in which case you have to pay more, or let it go.

You both need to work together to carry our your father's wishes. It means a lot to you, but obviously not to him. You can only try your best. I would avoid court at all costs.

It doesn't sound like your relationship can be damaged much more than it may already be, if he is prepared to take this to court.

Perhaps it might be sold to you for $570K at auction and he will regret forcing the issue.

I don't know what to suggest, but I do wonder why he thinks he will get more at auction than a fair valuation based on comparable values. Is the market "hot" where this house is? Perhaps he believes an auction will bring more because the market is hot? Perhaps he has been brainwashed by the "auction it for better price" argument.

What a mess.

Good luck.
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Old 10-03-2010, 07:41 AM
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Quote:
Originally Posted by Raphael View Post
Dad died last year, left his home to me and my brother.
He wanted one of us to keep it.
He did not want it sold.
His first Will left it to my son (8yrs old), but he wrote another leaving it to me and bro.
I promised dad we would not sell it, Id buy bro out and dads home becomes my IP #3. (a keeper of course). Dad was OK with this as he understood we could not move into his home. (we have our own)

Bro wants to auction for max cash, I want to carry out dads wish to keep property in family, & buy bro out.

Bro has rejected my offers.

Brother told me he can take me to NSW Supreme court to force me to auction. Is this correct, and what justification does he need to do this?
Moving forward, I need strategy advice.

My offers so far have been verbal, ill put one in writing, so we can show court we made reasonable offers and my bro is being unreasonable. Im not thinking straight, im all messed up with this issue.

I see buying out bro as win/win/win, all boxes ticked.
1/ Dads wish carried out, house still in family
2/ another IP for family, eventually handed over to my son, (dads first wish)
3/ Bro with pocket full of cash.
Hi Raphael,

I'm sorry to learn of your loss losing a parent (or any loved one) is a heartbreaking experience.

Unfortunately, your brother (being a real peach especially at this time!) can "contest" the will and to do this will (and can) take the matter to court to battle it out. Not a great idea, as this not only will chew away at much of what your dear father probably intended to be for his children, will destroy the relationship between you and your brother.

Can you not reason with him?? That is, would he listen to you if you tried to reach a compromise of sorts??
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Old 10-03-2010, 08:13 AM
wylie wylie is offline
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Hi Raphael.

I replied to your thread and just wanted to apologise for not sending my condolences for the loss of your father. Monoply's post has reminded me of my manners (thanks again Monoply).

My mum passed away six weeks ago, and we have similar problems in our family with one brother, so I understand something of what you are facing.

And all the while you are trying to grieve, and run your life whilst this "stuff" is happening in the background. And you cannot just push it away and come back to it later.

I found the other thread you started where you give some more information. I hope you can make your brother see that on such a sale price, the agent fees will be very expensive, and that getting a realistic valuation so you can buy his half will save agent fees and expensive advertising that is pushed on you with an auction. Find out what advertising and commission would be on a $700K sale and make sure he knows this is money that he is "losing".

His position is probably that an auction will likely push prices higher, but a valuation uses very recent (three months?) comparable sales, and that would include valuations on houses that were auctioned, and may have sold for higher than expected, so I cannot see how he could lose.

It is not like you are asking an agent to use the three lowest figures for the area. They must do it using "comparable" sales and prove it. If he is not happy, he could get an agent of his choice and you look at both appraisals.

I fear he will shoot himself in the foot, and get less after all the costs for auctioning than he would get using the comparable sales method, and the saving on commission and advertising will hopefully sway him.

Again..... good luck.
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Last edited by wylie; 10-03-2010 at 08:42 AM.
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Old 10-03-2010, 08:14 AM
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The court will most likely look at how much each of you needs the property/money and can order a division other than a 50/50 split.

Have you or your brother had the property valued?

If he's really just after the money, do a little research.. If he takes you to court.. to sell the house at auction, the legal fees will most likely be paid out of the estate which means less money for both of you. The process will be drawn out.. meaning he won't get it for months, maybe years.. (because.. you know, courts make decisions so quickly and all....) and your relationship with your brother will dissolve even further over time.

Take this information to him. Show him details of recent sales in the area. Show him an estimation of court costs, legal fees, real estate fees, etc and show him the value of the estate. If you're going to buy him out, you may need to offer him more than 50%, after all.. you'll get to keep the house that has so much sentimental value to you.. he'll just end up with a big fat cheque.

Edit: After reading Wylie's post, I too must apologise for not passing on my condolences.

Last edited by the helix; 10-03-2010 at 08:17 AM. Reason: Manners
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Old 10-03-2010, 09:01 AM
depreciator depreciator is offline
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A mate of mine thought about challenging his father's will. He was told that his legal costs could be around $80K and that the estate's costs would be similar. He pulled his head in and found a more sensible solution. Your brother might be shooting his mouth off without realising the cost of going to court.

Sorry to hear about your dad. Mine died last year. It's an odd feeling being up the top of the family batting order.
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Old 10-03-2010, 10:19 AM
marg4000 marg4000 is offline
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As your brother has rejected your offers, why not ask him straight up what he wants for his half.

At least that will give you a starting point.
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Old 10-03-2010, 10:44 AM
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is it about the money or the property?
do you think your brother resents the fact the house may become your property? families can be funny things. rather sad there is this conflict but it is more common than some some would believe.

agree ask him what he wants. hopefully it can be resolved without an expensive legal battle. it might be wise to get a legal opinion nevertheless because yes anyone can contest a will.
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Old 10-03-2010, 11:03 AM
paul2299 paul2299 is offline
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What is written in the will about how the house is to be used? ie Does it say anything about keeping it in the family?

"I see buying out bro as win/win/win, all boxes ticked.
1/ Dads wish carried out, house still in family
2/ another IP for family, eventually handed over to my son, (dads first wish)
3/ Bro with pocket full of cash. "

Have come across this before of one sibling trying to buy out the family home and it is a very difficult situation. I feel for you, from your brothers side I would guess he thinks the valuation might be too low and wants it to go to market.
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Old 10-03-2010, 11:04 AM
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I'm sorry to hear about your father, mine died in January so I do understand.

If the house has passed to you both, you need to look at how it is now held, is it joint tenants or tenants in common? Can you simply agree on a price and then buy him out. Why should you have to buy back at auction what you technically already own half of?

As other posters have said, legal fees could eat up a lot of the money if it comes to that so try and avoid going to court. Its a shame about all this, your brother sounds like a greedy sod.
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Old 10-03-2010, 11:08 AM
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People threatening legal action in my experience are generally just shooting their mouths off without any real idea of the legal situation or the expenses involved. Those that engage in legal action don''t usually use it as a threat first. That is in my experiences anyway. I will not offer any advice about your or his legal position. But I will say that courts will take into consideration your willingness to buy out your brothers half for fair market value - particularly if you have the eveidence (such as a paper trail) to back you up.

I'm not sure what kind of relationship you have with your brother, or what you want to have with him - but I do understand times like this can bring out the worst in people, even those you least want to be fighting with.

The best advice I can offer you is to not engage in bickering with your brother about this, but rather gather your figures (costs relating to selling, independant valuations {worth spending the money on in this situation IMHO}, and how much you are willing to offer to purchase his half of the property. Without knowing your brother, it sounds like your biggest hurdle will be trying to convince him that you are trying to be fair and that auctions are not always the best value for money. Show him what he's reserve would have to be in order for him to make more profit through an auction then a private sale to you. And show how unreasonable it would be to expect a reserve that high to be met. And then point out that if it doesn't sell at auction then he will still be up for consiiderable costs regardless.

More often then not, the only real winner at an auction is the REA - IMHO.
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Old 10-03-2010, 01:26 PM
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Savanna, I am sorry to hear of your father's passing.

My goodness there has been quite a spate of losses amongst posters. My sympathy to you all.

Back to the topic....

Among the many emotions associated with grieving, greed is perhaps the ugliest of them all. It can split the closest of families and can flush out estranged relatives from underneath their rocks!!

Emotions run off the rictor scale at these times, so wherever possible calm negotiations would certainly be more favourable and help to minimise long term damage to relationships.

I would make EVERY attempt to talk to your brother, tell him you are prepared to negotiate but would prefer it not to be with a magistrate as your referee!! Try as much as you can to appeal to his sense of reason, if he has one??
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Old 10-03-2010, 01:57 PM
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Quote:
Originally Posted by Savanna100 View Post
your brother sounds like a greedy sod.
With my father-in-law dying 6 months ago also, my wife's family is also going through this exact thing as well.

Hmmm, before labelling the brother with ill-founded tags, it would be nice to hear his side of the coin. I gathered he was entitled to 50% of the estate, and is asking his brother, in his eyes, to take it to public auction to get a "real" figure.

If the house is worth 700K, and the auction costs 15K to fully stage, then that is still only 2%, a reasonable figure I would contend. Of course, it doesn't preclude Raphael from bidding....

A cash unconditional bid at public auction is slightly different to a valuation. There are good reasons why courts sometimes insist on going to public auction, as the method is above reproach.


Another note that hasn't been touched on yet, that is massively relevant in our current situation, is the already established financial and overall pecking order established within the family prior to the death.

A weaker / younger / less "effluent" sibling trying....for the first time....to reason / persuade / cajole a stronger / older / more dominant / outspoken family member is literally going to be pushing goo uphill with a wet spaghetti.

Raphael hasn't mentioned as yet where he sits on the totem pole.


** Any chance the mods can change the spelling on the title to 'bequeathed'.**
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Old 10-03-2010, 02:14 PM
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Monopoly Monopoly is offline
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Originally Posted by Dazz View Post
Another note that hasn't been touched on yet, that is massively relevant in our current situation, is the already established financial and overall pecking order established within the family prior to the death.

A weaker / younger / less "effluent" sibling trying....for the first time....to reason / persuade / cajole a stronger / older / more dominant / outspoken family member is literally going to be pushing goo uphill with a wet spaghetti.

Raphael hasn't mentioned as yet where he sits on the totem pole.


** Any chance the mods can change the spelling on the title to 'bequeathed'.**
I'm sorry but...

How is this relevant, let alone massively??

One's "pecking order" hardly constitutes the right for bad behaviour and/or bullying amongst siblings!!

Greed is greed, regardless of whether it is expressed by the youngest or the oldest of the clan. What is missing here is calm, rational communication; nothing more. Making threats is not communicating, it is only adding pressure to an already painful situation.

By the way, (yet again) my condolences for your loss.
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Old 10-03-2010, 06:25 PM
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Terryw Terryw is offline
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Raphael

Sorry about your dad.

If the will left the property to you both jointly, then maybe your brother is not challenging the will, but accepting joint ownership, and then seeking Supreme Court action to force the sale. I am not sure how he would do if you are offering to buy out his share.

What about getting three independent valuations done and offering to buy his share for the average of the 3.
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Old 10-03-2010, 08:48 PM
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Originally Posted by Monopoly View Post
I'm sorry but...

How is this relevant, let alone massively??

One's "pecking order" hardly constitutes the right for bad behaviour and/or bullying amongst siblings!!

Greed is greed, regardless of whether it is expressed by the youngest or the oldest of the clan. What is missing here is calm, rational communication; nothing more. Making threats is not communicating, it is only adding pressure to an already painful situation.

By the way, (yet again) my condolences for your loss.
Emminently relevant I'm afraid. I agree with Dazz. The law may be the law but there is an underlying reality to be determined.

Here's a solution- put it to auction and bid for it yourself. Put a clause in the agency appointment limiting the commission in such circumstances.
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Old 10-03-2010, 10:52 PM
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Terry, on the money, you picked it.

I expect we will soon be joint owners, estate gets wound up easter. he'll then take me to the supreme court to force me to auction. I think Im thinking the same thing as you, whats his case if he has refused to negotiate?

I can see now after the 3 recent appraisals my offer was low, but he wont respond, state what he wants. Im not goin to keep increasing my offer just to get a response from him. hes got to step up and say something... my mind is a mess...
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Old 10-03-2010, 11:38 PM
Raphael Raphael is offline
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Savanna, Wylie (6 wks ago?) and Dazz, Im sorry for your losses. we could save on counciling costs and console each other in the lounge room..This parent dying thing is crap. its not right, it shouldnt happen the way it does. you know its going to happen, but when it does it knocks the s__ out of you.


Anyway, Hmmm.. sibling pecking order? where we goin here? you asked, here goes.

EDIT; Something i forgot to mention, I was bros landlord for 5 yrs until he bought his own place. I didnt like that situation, I kept the rent low for him. Others put pressure on me to let him move in...

Bros older, much taller, more educated.
He didnt get on with dad. I did.
Dad was a generous man with anger management issues.
I had trouble with dad aswell, but not to the same extent. I had some common ground with dad, interests in building, investment, saving money and a hard work ethic.

Bro had nothing in common with dad.

Bro would go to him when he needed money. dad bailed him out 2 or 3 times that i know of.

Bro has not accumulated any wealth thru out life, bought his first prop 2 years ago. at 50, I dont how he thought he could pay it off, with only 10 or 15 yrs of income ahead.

Im different to bro, I bought my first property 25 yrs ago whem i was 21. bought a couple more since. Bro thinks im dumb borrowing all that money to buy houses.

Bro could be jealous of where im at?
Im almost convinced he doesnt want me to end up with dads house, at any price.

Last edited by Raphael; 11-03-2010 at 06:50 AM.
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Old 11-03-2010, 12:10 AM
Piston Broke Piston Broke is offline
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Quote:
Originally Posted by Raphael View Post
Bro has not accumulated any wealth thru out life, bought his first prop 2 years ago. at 50, I dont how he thought he could pay it off, with only 10 or 15 yrs of income ahead.
Bro thinks im dumb borrowing all that money to buy houses.
Bro could be jealous of where im at?

Im almost convinced he doesnt want me to end up with dads house, at any price.
This is a common trait of the person who would put a family member in that situation. Seen it many times. Reality is lose/lose for whatever you do.
Is it really worth fighting over money? I generally would say no.
I would'nt rule out "external" influences either.
Spouses have a habit of ear chewing in these circumstances as well.

As for your loss, been there done that I hear ya. Fortunately there was'nt such problems in my case.
And I also agree on the significance of the "totem pole" to most people.
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Old 11-03-2010, 06:23 AM
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Emminently relevant I'm afraid. I agree with Dazz. The law may be the law but there is an underlying reality to be determined.
Okay you've sparked my curiousity. How so guys?? Would really like to hear more about this.

Not trying to disagree, I am genuinely interested to know how this comes into play?? In the words of Pauline Hanson, please explain...

P.S. Having been in a similar situation to Raphael (I was in his shoes; I was forced into an auction) I'd be very interested to know how this pans out. Hopefully he will keep us all posted on the outcome.

Best of luck with it all Raphael.
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