A friend had me over the other day to look at a piece of land he just HAD to sell. He needed a down payment to buy his siblings out of the home he lives in. The property in question was his family home. He had lived there while helping his father pass from this world. Now that his dad had passed, the siblings wanted the home sold “to get their fair share”.
My friend’s plan was to sell his 1/3 acre lot adjacent to the house in order to get enough capital to buy out his siblings and remain in the house where he was happy. The only problem was, the location of the lot and home were depressed and the sad truth was, the lot simply wouldn’t sell for much, if it would sell at all.
My friend asked me to come over and together we looked at the house and lot and considered his options. Our conversation went something like this.
“Let’s review all of your options,” I said and then asked, “What outcome would you most desire?”
He said, “Keeping the lot and the house.”
“What other options are there?” I asked.
“Well,” he started. “We have a couple options. I could sell the house and start fresh. Or I could sell the lot and barely get a down payment for the house.” That’s all he could think of.
I said, “Don’t you get a piece of the house if you sell it?”
He said, “Yeah, I would get a quarter share.”
I said, “What if you use that share for your down payment? “
His eyes lit up and he said, “I could do that?”
I called my lender and she said, “Yes, if the numbers work and it is written into the trust that he would get a share. Then he could use that share as his down payment.”
So he is now buying the house, keeping the lot and doing what he thought was not possible.
There are three lessons we can pull from this story.
1. When at a crossroads, analyze ALL your OPTIONS.
2. Bring in “experts” to help you think out of the box for solutions.
3. Whenever you possibly can, keep all of your assets.
Explore your options my friends!