Mortgaging Your Way Out
Ernie might have to resort to drastic measures to sell the house that was left to him and his sister as an inheritance.
QUESTION: Ernie was left a piece of real estate in another state as an inheritance. His sister has her name on it as well, and she wants to sell it but he doesn’t. They can get $250,000 for it, but that’s down because of the market. To buy her out, he needs to get a mortgage. Is it worth it for him to do that?
ANSWER: The part I can’t measure for you is the emotional part. Unless there’s something unique about the house, I’ll try to work my way through that emotion. If it’s a fifth generation property and your great grandfather lived there, then you have to stop and think about that. If it’s just a home in a subdivision, and it happens to be where you grew up, you have to think about that. I’d probably turning that loose, though it will be hard to do, because you’d have to go into debt to keep it. I wouldn’t borrow money to do it. What you’re going to end up with is a rental property in another state that you own, and then some idiot changes his motorcycle oil in your living room.
I would probably sell it, but I wouldn’t do a panic sell because she needs money. Price it in such a way that if it takes until fall to sell so the market warms up, that you’re all right with that.