Estate property/Sibling buyout

[nudaveritas]

What is the name of your state? FL

My mother passed away in March of 2006 (my father passed away years prior). I have been living in the home since shortly before that time. A will was not left; however, my sister and I are currently going through probate to which we are both inheriting equal shares in the home. I have been paying the mortgage for the past 13 months and do plan on staying here indefinitely. My sister wants me to buy her out and I have no objections to this naturally, my only concern is proceeding in a legal, fair, and effective way. The house itself is a far cry from fair condition and needs at minimum 20k in repairs, and at current market value seems comparative to homes in the area at a 80k-90k range (generously speaking). We seem to have a different opinion on value, her estimate exceeding 110k. Here's where it gets tricky. I recommended that we get the property appraised, but she refuses to take any part in the process and will likely dispute. (Bear in mind that no changes have been made to the home since my mothers passing.) She instead is asking that we have a friend of hers, who is in real estate, perform a CMA to estimate value, and according to our attorney she has the upper hand to choose this route. I feel that a CMA is too subjective, particularly because this person may be biased due to her relationship with my sister. More so, wouldn't an appraisal be more accurate? Am I wrong in thinking this?

How should/can we proceed with the above in mind? (Fairly on both ends.)
Do we need to account for a 5-6% share that would normally go to a real estate agent selling a home? If so, to where or whom does this 5-6% go?
Or, do we simply say: Fair Market Value of home = X, outstanding mortgage principle = Y then X-Y divided by two = the dollar amount owed to her? Is it that simple?

I plan on using the equity in the home to refinance and buy her out, and also take out an additional amount to pay for repairs. Will this affect the above formula?

I truly appreciate any advice and thoughts offered. If additional details are needed I will respond as soon as I can.

Thank you!

 

[nextwife]

What is the name of your state? FL

My mother passed away in March of 2006 (my father passed away years prior). I have been living in the home since shortly before that time. A will was not left; however, my sister and I are currently going through probate to which we are both inheriting equal shares in the home. I have been paying the mortgage for the past 13 months and do plan on staying here indefinitely. My sister wants me to buy her out and I have no objections to this naturally, my only concern is proceeding in a legal, fair, and effective way. The house itself is a far cry from fair condition and needs at minimum 20k in repairs, and at current market value seems comparative to homes in the area at a 80k-90k range (generously speaking). We seem to have a different opinion on value, her estimate exceeding 110k. Here's where it gets tricky. I recommended that we get the property appraised, but she refuses to take any part in the process and will likely dispute. (Bear in mind that no changes have been made to the home since my mothers passing.) She instead is asking that we have a friend of hers, who is in real estate, perform a CMA to estimate value, and according to our attorney she has the upper hand to choose this route. I feel that a CMA is too subjective, particularly because this person may be biased due to her relationship with my sister. More so, wouldn't an appraisal be more accurate? Am I wrong in thinking this?

How should/can we proceed with the above in mind? (Fairly on both ends.)
Do we need to account for a 5-6% share that would normally go to a real estate agent selling a home? If so, to where or whom does this 5-6% go?
Or, do we simply say: Fair Market Value of home = X, outstanding mortgage principle = Y then X-Y divided by two = the dollar amount owed to her? Is it that simple?

I plan on using the equity in the home to refinance and buy her out, and also take out an additional amount to pay for repairs. Will this affect the above formula?

I truly appreciate any advice and thoughts offered. If additional details are needed I will respond as soon as I can.

Thank you!

Obtain an independent appraisal. A CMA is subjective- I used to sell real estate, and some firms were notorious for interpreting the data to make it look to the seller that THEIR firm could get them more for their house.

Certainly deduct the closing costs that always exist: owner's title insurance (depending upon what sellers in your area traditionally pay for) transfer tax, if any, etc. Realtor fees aren't always part of the transaction: the value is the value. If a seller chooses to pay a real estate professional for their services in securing a buy-sell transaction, they may do so. I've sold both with and without professional assistance. I'd think that the appraised value, minus mortgage payoff, minus transfer tax that the half interest being sold is responsible to pay, minus title update to be certain that the seller's interest is clean of liens and judgments, etc.

The fact that you've been paying the mortgage is probably a wash with what your use of the property is worth.