Partner w/family? Need to vent.

[brenmich]

Is there anyone that has had sucess in buying a house with a family member?
Last April my husband went to visit his daughter in Texas she is 25yrs old a single mother. Long story short I had just received a small inheritance & my
husband was planning to retire in the next year or two & we wanted to buy a
second home/ vacation home so I put down $20,000. with the agreemnet my
stepdaughter would live there pay the payment and take the tax benefit we
co-signed & are on the warranty deed the plan was to stay there when we visited & when my husband retired to live there a few months out of the year
if the house was sold I told my stepdaughter we would share part of the equity with her. In order for her to qualify as a co-borrower her car needed to be paid of so I said since i had helped my daughter who lives her in CA a
new car I would pay of her car $4,100.
Well after only four month we started having problems with her so I told her working out this was a BAD idea of mine so lets sell the house so it does not ruin our relationship to said NO I am not selling MY!! house. So now we have had to hire an attroney to sue her and force a sell it but we have worried that she may stop paying the payment & ruin our credit. I guess it someone does not work for something they never really appreiciate it.

 

[michelle8702]

Family and money...

I have never been in a situation like yours but as a good rule of thumb (after MANY bad experiances) It is never a good Idea to loan money to family members that may not be able to pay it back or who have had problems paying their debts off. My mother in law owes us $1,100.... And THAT is causeing problems. I am not to worried about it but my husband who is in Iraq right now is furious and I am in the middle of it telling him not to flip out and trying to make sure they don't fight... I don't like the position I am in and have had problems with his family in the past... He is ready to write them off but that is not something I am willing to let him do and it is really sad. I feel your pain really I DO! :rolleyes:

 

[Nicolette99]

Hi,

Sorry to hear about the situation you're currently in! What a headache it must be to deal with this every day. :(

As a rule, I wouldn't advocate co-signing mortgages with family members. Most of the time one party wants to sell before the other is ready. If these contingencies are satisfied in advance of entering the agreement together, there typically would be less problems down the road. (See below signature for related story.)

Unless the market is very active where you live, you could take a loss on selling the property (because of the loan interest). I'm sure you know this already though!

Would it be feasible for you and your husband to take over the payments until you reach an agreement with her? You could buy out her interest in the property. If you have the money to take over mortgage payments and buy her out, that would be easier and less expensive than a lawsuit and wrecked credit, in my opinion. That's something to think about. If you decide filing action against the step-daughter in court is the way to go, using an attorney who specializes in real estate law would be a great asset.

You said the agreement was "if the house was sold [you] would share part of the equity with her." Was that put into a written contract... anything else relating to the sale of property or what to do if parties are in disagreement? In the state where I live, verbal real estate contracts are not legally enforcable.

I'm not familiar with real estate laws specific to TX, but if you have any general questions I'd be more than happy to help you out and tell you what I do know! :D

Nicolette

(The house I'm living in was bought by my boyfriend and his brother. Their agreement worked out pretty well until the brother wanted to sell and boyfriend didn't. The brother couldn't afford to pay his share, more or less pay both rent and mortgage. Thankfully they worked it out so that my boyfriend stays in the house by paying 80% of the loan payments. When they sell, the profit will be divided by how much money each put in.)

 

[Elyse]

Ouch, that is one sticky situation. Sorry you are in this mess. It is unfortunate that you kindness and generousity have been taken for granted. I tend to agree with that you should find a real estate attorney as Nicolette suggested.

I am not too sure about this but you may want to find out if you can put the payments in an escrow account in order to protect your credit if she is not making the payments.

We learned the hard way (not nearly as big of a purchase as you) when we bought 2 horsed with DH's brother and horrid wife who have no business skills at all. The horses were on their property and needless to say it was a mess to finally get out of this financial loss. I kept detailed paper work and basically threw it in their faces when it got to that and we got out of it. Never really liked them to begin with so No love loss there.

Hope this works out without getting too messy. Sorry.

 

[brenmich]

Thank you so very much, everyone!! My family here in California were I live
full time do not want to here anything about anymore they told me after I first bought the house that I made a mistake. The money I put down which
was the requried 20% was not a loan to her I was to get that back off the top before any cost or split of the equity.
We have retained an attorney that does specialize in real estate law my
stepdaughter has retained a divorce attorney. From what our attorney tells
us since there are three owners on the deed we each own 1/3 - she has 1/3
to our 2/3rds at first I suggested she buy us out and get her own finacing
& told her she could keep the $4,100. for her car her offer was to write me an I.O.U. and pay me back the $20,000. over a 10 year period. Next I offered
to reimburse her for the closing cost & we would refi to take off the note
she refused. Her attorney sent a itemized list asking us to pay her back each
house payment $800.00 x 7 months,$1000.00 attorney fees, $3,000.00 in damages, $600.00 earnist money we had given her a check for already she wants us to pay her over $18,000. plus incure cost of refi which will be around $6,000. I told her no one live for free anywhere
let alone gets paid on top of it plus a car free & clear.
The escrow account won't work there was an overage at the 1st of Jan. of
$2,471.00 a check was mailed to theproperty address it had her name & my
husbands name on it she took it signed only her named cashed for cash &
kept it I have a copy of the front and back. The bank refuses to do anything
because it did not have a AND. she has filed her taxes and taken the tax
benefit so as head of house w/ a child she would have received most of the
$2,500. in interest paid back on her taxes'. To say the least that really upset us!! $18,000. + $2,471. + $4,100. + what ever she received on her taxes'
that stealing. since it was a new house the property tax'es went up the
payment is $815.00 a month I called the loan co. today & spoke to them in
collections they said that they won't report it to the credit bureau till 4/30 she works for the loan co. in the contruction lending dept. they gave her a discount on our cost when we bought the house with her working there she
and banking there that is how she cashed the check w/ only one sig. & a few
of my husbands & my conversations RE: our loan were discussed with her.
I e-mailed our attorney today to see if I could rent out part of the house.
When this first started my stepdaughter told her borther & sister in-law a few
stories to turn them againist us which worked but she did not count on me calling them. My daughter in-law had been rude in the past I never understood way but all along she had been told that we did not like her
and we were told the same thing about her. My step-son in Bagdad right
now and does not want to be in the middle.