Me­di­a­tion and data can help with fam­ily con­flict

The Progress-Index - At Home - - DEAR MONTY - Richard Mont­gomery gives nonon­sense real es­tate ad­vice to read­ers’ most press­ing ques­tions. He is a real es­tate in­dus­try vet­eran who has cham­pi­oned in­dus­try re­form for over a quar­ter cen­tury. Send him ques­tions at

Reader ques­tion: My sis­ter and I have been in our home since the mid‘90s and only have a $40K mort­gage. She is the only one on the mort­gage, and we are BOTH on the deed. The prob­lem is we don’t get along, she has can­cer and hasn’t worked but is get­ting treat­ment and now low on funds. I think we sell as is, she thinks we put more money in fix­ing the house to get more out. I think that money could go for her treat­ments. Our house can eas­ily sell for $370-$400K with­out fix­ing. She is also de­mand­ing I sign to refi the house for $250K. What do I do? Do I get an at­tor­ney? I don’t want to put my­self at risk, and she has can­cer. I think the only so­lu­tion is to sell. Help. Janie.

Monty’s an­swer: There is much his­tory in this sit­u­a­tion that is not avail­able to dis­sect for a spe­cific rec­om­men­da­tion. As an ex­am­ple, how is it you bought the house to­gether, but you are not on the mort­gage? Who is mak­ing the mort­gage pay­ments? Is there a writ­ten part­ner­ship agree­ment? What is your sis­ter’s prog­no­sis? Th­ese and other ques­tions will have to be known and un­der­stood to pro­vide sound guid­ance.

Ex­plain to your sis­ter that you need more in­for­ma­tion be­fore you can con­sider her terms. You both need the fol­low­ing de­tails. An at­tor­ney or me­di­a­tor gath­er­ing the facts will have ques­tions about the real es­tate and other cir­cum­stances. Here are is­sues to pro­pose.

1. The cur­rent range of value of the prop­erty. Se­lect three real es­tate agents to pre­view the home and present a writ­ten doc­u­ment called a com­pet­i­tive mar­ket anal­y­sis (CMA). The CMA is their opin­ion of the high­est price you could ex­pect, and the low­est price you should ac­cept were you to sell the home. It should also in­clude the com­pa­ra­ble sales the agents se­lected to com­pare to your home. You need three of th­ese be­cause they will all have dif­fer­ent opin­ions. At this point, keep it sim­ple with the real es­tate agents. Do not share or men­tion the list of im­prove­ments.

2. The cost to make the im­prove­ments must be es­ti­mated. Your sis­ter should pre­pare a writ­ten cost list of her de­sired im­prove­ments. The best way to do this is to call or in­vite a con­trac­tor to give you an es­ti­mate. For ex­am­ple, if a new coun­ter­top is on the list a com­pany that sells and in­stalls them, know­ing the size, can give you a range of es­ti­mated cost. You are not seek­ing com­pet­i­tive bids here; you are in­quir­ing to get a sense of true costs. Your sis­ter should han­dle th­ese calls, as she is the one seek­ing the im­prove­ments.

3. “So she can get as much as she can,” im­plies she is will­ing to sell the house. She be­lieves the im­prove­ments

will net her more money. If this is the sit­u­a­tion, it will be pos­si­ble to prove or dis­prove ei­ther of your con­tentions. Af­ter the real es­tate agents present their CMA’s, now share with them the list of im­prove­ment your sis­ter would like to make. Do not share the cost es­ti­mates, just the list, and ask them each to tell you how much more the house will bring on the mar­ket with th­ese im­prove­ments. You are not look­ing to de­bate their opin­ions; you are sim­ply lis­ten­ing and ab­sorb­ing their think­ing and ex­pe­ri­ence. Some im­prove­ments help bring more money; oth­ers may not.

4. Your sis­ter not work­ing will af­fect her abil­ity to re­fi­nance with­out you. If you owe $40,000 and you could net over $300,000 af­ter all ex­penses, your share is $150,000 plus. If your sis­ter wants to re­fi­nance more than the home im­prove­ments, that money must be shared equally with you to keep the eq­uity fifty-fifty un­less there is an agree­ment to the con­trary.

By seek­ing the in­for­ma­tion above and study­ing re­search, you may learn that you are both right. The truth could be some­where in be­tween. By get­ting mul­ti­ple, ex­pe­ri­enced real es­tate agents, you have ex­pert opin­ions to add cre­dence to ei­ther ar­gu­ment.

Now take the data and pro­pose a me­di­a­tion with your sis­ter. Me­di­a­tors are skilled at help­ing peo­ple over­come their dif­fer­ences; it is less threat­en­ing than an at­tor­ney and of­ten far less costly. Many judges to­day will re­quire me­di­a­tion be­fore they will look at a case. To serve only as an ex­am­ple of a me­di­a­tion cen­ter check out the Na­tional As­so­ci­a­tion for Com­mu­nity Me­di­a­tion.


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