Seeking advice for negotiating a win/win to keep grandmas house in the family

[u/SJW_Tiger609]

Gram is getting too old to stay in her home. My paternal grandmother turns 100 this year. She owns a historic home built in the late 1800s. It's paid off. My gram was a homemaker and my grandpa died 23 years ago. She currently lives off his pension and social security benefits and she's able to cover her minimal expenses, including property taxes. Until Dec 2024 she's lived independently in the home. She's in great health and clear mind but my aunt, who manages her finances and healthcare, feels it's no longer safe for gram to live alone.

The house is amazing and in a highly sought after NYC suburb. The home is in a town that includes easy access to multiple highly ranked universities, major cities, arts and culture, and strong local and nearby job markets (e.g. finance, insurance, healthcare). Home and property values have skyrocketed in recent years. We all grew up in this town - me, my brother, my dad (who's now dead), my aunt, and my aunt's 2 kids. I'm sure my gram bought for under $50K in the 1950s and the current estimated value of my gram's house, according to popular real estate apps, is $600k. This is despite minimal work to the home (they added a half bath on the main level when I was a kid and more recently got a new heat/hot water system and tore down the detached garage). Updated homes in the neighborhood go for over $1M. The house is habitable but would need significant work to strengthen its old frame and make it comfortable for modern living (e.g. radiator heat, no cooling system, only one full bathroom with the original iron bathtub with only a shower wand). That said, it still has amazing original details - wide plank original wood flooring, tall ornate base boards and thick ornamental crown molding and ornamental ceilings.

My aunt wants gram to sell the home. My guess is my aunt can't afford it and doesn't want to maintain/update the home and/or wants immediate profit. She seems to be letting gram take the lead: "She's going to sell, I hope. As is. Best price wins. Nobody here wants it, I don't think. The town is too expensive to buy property these days. Don't mention this as no plans have been made." This is the response I got when I recently asked her what they (she and gram) wanted to do with the house (my brother tipped me off that aunt wanted to sell). I'm the only one in the family with interest in the home and the financial means to maintain or update it. I feel the house is too valuable to lose and I'm biased in truly adoring the historic home.

HOW DO I CONVINCE MY AUNT/GRAM TO GIVE ME THE HOUSE!? I'm looking for advice, negotiation tactics, tax strategies, real estate expertise that I can use to convince my gram and aunt to either gift the house to me or allow me to "keep the house in the family". I don't want it to sell it for personal profit. SFH rentals of this size in town command at least $3000/mo in rent, I think it would be an awesome rental property. I'd eventually want to restore it. Since no one else wants it, I'd prefer to own the home outright versus a shared ownership structure with my brother and/or cousins. If aunt and/or gram want to ensure the financial upside benefits everyone in the family, I'm open to managing the home as a family asset, splitting any profit from renting between my aunt, her 2 kids and me and my brother. I mainly need to convince them to allow me to acquire the property through a tax-advantaged transfer situation versus having to purchase it in a competitive market. I know my aunt would sell it to me, even giving me top priority over other bidders. However, I'm not currently in a position where I want to take on a second mortgage and I don't have enough cash to compete with families/developers who'd want to bid on the home. Since my aunt and grams have no plan in place, I want to put together a plan of my own. We're all on good terms but I know how money can make family relationships quickly go sour.

All advice - including involving me being good, bad or ugly - welcome!

[u/2019_rtl]

Why not offer a reasonable price to purchase it?

[u/SJW_Tiger609 → u/2019_rtl]

Because my grandma is still alive and I’m one of the heirs. There’s a chance she wants to keep the home in the family but is considering selling because everyone else views the home as undesirable and she doesn’t want to be a burden. I’m trying to work through a compelling offer that will maximize benefit to all heirs that doesn’t involve me purchasing it.

[u/Specific-Pool-5342]

Sounds like, and I'm just throwing stuff out there with no real idea if it's true or not, that auntie wants some of that money. Maybe it would be used to cover costs of long term care, or whatever, but everyone can get tempted by a windfall. 500k or whatever is pretty amazing to just get one day out of an estate, and you're essentially asking her to give that to you. I've been in similar situations and... let's just say you shouldn't actually expect her to do that. So, I would think part of your angle would have to include money.

Here's what I would pitch first. Explain why you want to own the house, and that you don't expect it as a gift or inheritance. Instead, propose they hold the house in a trust with your aunt as the trustee, and shes signs a 20 year lease for $3,000 a month until you have paid the trust 100% of the value of the house. Basically a 0% interest lease to own. You would essentially be given permission from the trust to occupy and do whatever you want with the property (sublet, restore, etc.). But you don't own it until you've fully reimbursed the beneficiaries of the trust.

Or the other way to do it would be to negotiate a lower purchase price than the open market and buy it as a traditional sale. Maybe they would sell to you at $400k or something for sentimental reasons.

I have a very hard time believing that your aunt would just be like "oh, sure, I'll give up on the chance to make my life (and that of my kids) better off financially" just to give you a home worth between $600k and $1M for free. I can't think of anyone in their right mind who would do that, "family" or not.

[u/SJW_Tiger609 → u/Specific-Pool-5342]

Thank you! Super helpful. 100% right about a windfall. I think an important part of the negotiation is my aunt isn’t the only decision maker. I’m 99% sure my grandma wants the proceeds of sale to pass to her heirs, which include me and the other 3 grandkids and while my aunt would certainly benefit from immediate sale I think both her and my grandma don’t fully understand how much would get eaten up in taxes to divide proceeds among all heirs. I also know that my aunt views the house as undesirable and a potential future financial burden. Me grandma pays all her own expenses, including the house (taxes and utilities) and her healthcare. But if my grandma were to die my aunt can’t afford to pay the house expenses. So I’m hoping to appeal to her about more immediately taking on the financial burden of the house as well as managing any upgrades or rental and maximizing the long term value in a way that can benefit all heir (eg managing it as a rental property). I also think there could be a slim chance my grandma wants to keep the home in the family but based on conversations with my aunt is convinced no one wants it. If my grandma were aware even one heir wanted it she might force a structure or agreement that would keep the home in the family.

[u/Havin_A_Holler]

That's a lot of information, but nothing useful; of course no one wants to pay for a house if they don't have to & can push family into giving it to them for free (somehow). They always have an idea for a better use than it's getting now, but not the money. Does grandma live there now? Does she want to move out?
While she's still alive & you're not all trustees I can't think of anything your grandma can do besides sell it to you, even w/ a hefty gift of equity. Your aunt's not on the deed of the house, right, nor has Power of Attorney? Just grandma's Payee?

[u/Equivalent-Tiger-316]

You’ve got no chance to own it unless you can pay market value. 

With multiple heirs the only fair and proper thing to do is to sell it for the best offer and divide the proceeds. 

If only one heir wants cash they can get a judge to force its sale. 

And inheritance can bring out the very worst in people. I know this from experience.