How to make a fair offer on my deceased father's sport car?
May 9, 2011 11:56 AM Subscribe
A close family member passed away recently and I would like to purchase his car. How do I propose a fair value for this while being sensitive to siblings and the memory of the deceased?
My father recently died. He loved sports cars and a few years ago he bought a new two seater roadster. The model/make isn't rare or especially hard to find in the marketplace, but they are no longer made.
I would like to buy the car. There will be some inheritance money but my portion will be less than the value of the car. My question is about how to go about establishing a fair sales price. I consulted another askme thread and found that there is some variability in the book price.
There is no contention among my siblings for the car -- no one minds in principal that I would buy it. In fact, this is viewed as a convenience and people are glad the car will remain in the family. The "seller" is effectively my oldest sibling acting as the executor of the estate. Specific questions:
1) What value, if any, should the ease of sale factor into the price? No one really wants to spend time showing the car to multiple people or taking a sales price hit enlisting it in an auction.
2) My gut says that Edmunds has more realistic (lower) pricing than KBB. Am I fair to say this?
3) I know that if it were sold private party it would unlikely fetch its book value. I'm reticent to negotiate on this because the proceeds will be divided among siblings. Am I out of line to offer a little less (say, 10%) than book value?
Aside: I'm writing just a plain facts, but the matter is quite emotional. I'm not out to dicker the price down to unreasonable levels. I sincerely want suggestions to make this an amicable transaction without me paying full price to avoid broaching the matter.
My father recently died. He loved sports cars and a few years ago he bought a new two seater roadster. The model/make isn't rare or especially hard to find in the marketplace, but they are no longer made.
I would like to buy the car. There will be some inheritance money but my portion will be less than the value of the car. My question is about how to go about establishing a fair sales price. I consulted another askme thread and found that there is some variability in the book price.
There is no contention among my siblings for the car -- no one minds in principal that I would buy it. In fact, this is viewed as a convenience and people are glad the car will remain in the family. The "seller" is effectively my oldest sibling acting as the executor of the estate. Specific questions:
1) What value, if any, should the ease of sale factor into the price? No one really wants to spend time showing the car to multiple people or taking a sales price hit enlisting it in an auction.
2) My gut says that Edmunds has more realistic (lower) pricing than KBB. Am I fair to say this?
3) I know that if it were sold private party it would unlikely fetch its book value. I'm reticent to negotiate on this because the proceeds will be divided among siblings. Am I out of line to offer a little less (say, 10%) than book value?
Aside: I'm writing just a plain facts, but the matter is quite emotional. I'm not out to dicker the price down to unreasonable levels. I sincerely want suggestions to make this an amicable transaction without me paying full price to avoid broaching the matter.
I sold my car to a friend a few years ago. I asked for the midpoint between the Kelly Blue Book cost I would get selling to a dealer and what she would pay buying from a private seller. It seemed like a good compromise that respected both our needs and our relationship. While I didn't tell her how I arrived at the number, she didn't seem to think it was unreasonable.
posted by politikitty at 12:04 PM on May 9, 2011
posted by politikitty at 12:04 PM on May 9, 2011
Why would you have to pay anything at all? Who are you paying the money to? The estate? And the estate is being divided up anyway, so you will essentially be paying yourself to buy a car?
I could understand if there were some behind-the-scenes sibling stuff going on, but that doesn't seem to be the case here. It's possible that you may be dealing with a death without a will or something, but you didn't provide that information.
posted by TinWhistle at 12:08 PM on May 9, 2011
I could understand if there were some behind-the-scenes sibling stuff going on, but that doesn't seem to be the case here. It's possible that you may be dealing with a death without a will or something, but you didn't provide that information.
posted by TinWhistle at 12:08 PM on May 9, 2011
While the other heirs don't have a problem with the car going to the OP, I assume they would have a problem with the car going to the OP for free because that would eat into their inheritance.
posted by smorange at 12:09 PM on May 9, 2011 [5 favorites]
posted by smorange at 12:09 PM on May 9, 2011 [5 favorites]
I would offer to forgo the cash portion of the estate in exchange for the car and any sales proceeds of assets up to a certain point near Blue book.
posted by JohnnyGunn at 12:13 PM on May 9, 2011
posted by JohnnyGunn at 12:13 PM on May 9, 2011
Response by poster: Thanks for the rapid responses. There is a will. Part of the fairness aspect, as smorange points out, is that the proceeds of the sale are then divided among siblings. I have a large family with seven surviving brothers and sisters, so it divides quite a few ways. Sorry for leaving out these details.
posted by dgran at 12:14 PM on May 9, 2011
posted by dgran at 12:14 PM on May 9, 2011
I have a big extended family. If I were looking at this from the other end, I wouldn't be offended if you offered 10% of book value, especially given the fact that it's a lot easier to divvy up liquidated cash than it is bits of a sports car.
posted by craven_morhead at 12:18 PM on May 9, 2011
posted by craven_morhead at 12:18 PM on May 9, 2011
I think the OP is offering 90% of book value, or -10%.
posted by amicamentis at 12:22 PM on May 9, 2011
posted by amicamentis at 12:22 PM on May 9, 2011
Best answer: If you are well off enough that you can offer Kelly Blue Book, offer Kelly Blue Book and never think of it again, as, hopefully, none of your sibs will either.
The problem with paying something less than KBB is that even though KBB is often rather unrealistic in my opinion particularly in some markets, it is viewed as The Source for fair market value. Say for instance the car's KBB is 10k, having viewed AutoTrader and Edmonds you know it is more likely to sell for 7k right now. You will likely be able to persuade your siblings of this and they will be willing to accept the money, however, some of them will likely always think back and view this as dgran taking advantage of his family relationship to get a really good deal buying a car.
This could lead to problems down the road, particularly since you come from a large family (which in my experience can lead to more story-telling and silly grudges built up over years until something insignificant now means two of your siblings won't come visit at the holidays)
If you don't have the money to comfortably offer Kelly Blue Book, write a short email including a link to the KBB valuation as well as recently sold similar cars on Edmonds and AutoTrader to give them a reference point, then tell them you'll defer to them on the price and ask them to pick the price. Send the email to your brother (the executor), and cc it to your siblings.
posted by arnicae at 12:22 PM on May 9, 2011 [3 favorites]
The problem with paying something less than KBB is that even though KBB is often rather unrealistic in my opinion particularly in some markets, it is viewed as The Source for fair market value. Say for instance the car's KBB is 10k, having viewed AutoTrader and Edmonds you know it is more likely to sell for 7k right now. You will likely be able to persuade your siblings of this and they will be willing to accept the money, however, some of them will likely always think back and view this as dgran taking advantage of his family relationship to get a really good deal buying a car.
This could lead to problems down the road, particularly since you come from a large family (which in my experience can lead to more story-telling and silly grudges built up over years until something insignificant now means two of your siblings won't come visit at the holidays)
If you don't have the money to comfortably offer Kelly Blue Book, write a short email including a link to the KBB valuation as well as recently sold similar cars on Edmonds and AutoTrader to give them a reference point, then tell them you'll defer to them on the price and ask them to pick the price. Send the email to your brother (the executor), and cc it to your siblings.
posted by arnicae at 12:22 PM on May 9, 2011 [3 favorites]
One final thing: getting into business matters with family is always tricky. In my experience, it has never been less than fraught. You don't mention if you want the car out of sentimental reasons or because it is a car you want. If you just want an adorable two-seater convertible that is no longer being made, consider buying it privately and avoiding the hassle of the family drama altogether.
posted by arnicae at 12:24 PM on May 9, 2011
posted by arnicae at 12:24 PM on May 9, 2011
I think the OP is right in assuming that the estate needs to get a reasonable price for the car, or at least that he needs to make that offer. If his share of the estate was MORE than the car was worth, he could get the car plus whatever else he had coming, but as it stands a value needs to be determined for the car so that the math can be done.
If no one is contending about it, I'd take the lower of the two book values. If you think you should pay less than that, I'd be prepared to discuss this with the executor. Discuss just as you would if you weren't related, as long as the discussion is staying amicable. Ex. "Edmunds is saying $10,000 but I'm going to have to pay $3,000 to get it painted and get new tires before it's drivable."
I'm making up numbers here, but I also think you shouldn't feel you've taken advantage of anyone if they just say "here, take the car." Your share "by rights" might be $5,000, and the car might be worth $7K, or $10K, or $15K, but if by taking something that the others aren't interested in you're freeing up other components of the estate for them - hey, that's up to the executor. He, of course, would have to make that determination, but don't feel guilty if that's how it shakes out. There are no guarantees they would find a buyer for "book value" in this day and time, and you're saving them some aggravation.
I'm sorry about your loss. I know things have emotional attachments, but my parting shot is that this car is, to use an expression I've heard elsewhere, neither your father nor your father's love. I think both you and your family should try to keep that in mind.
posted by randomkeystrike at 12:30 PM on May 9, 2011
If no one is contending about it, I'd take the lower of the two book values. If you think you should pay less than that, I'd be prepared to discuss this with the executor. Discuss just as you would if you weren't related, as long as the discussion is staying amicable. Ex. "Edmunds is saying $10,000 but I'm going to have to pay $3,000 to get it painted and get new tires before it's drivable."
I'm making up numbers here, but I also think you shouldn't feel you've taken advantage of anyone if they just say "here, take the car." Your share "by rights" might be $5,000, and the car might be worth $7K, or $10K, or $15K, but if by taking something that the others aren't interested in you're freeing up other components of the estate for them - hey, that's up to the executor. He, of course, would have to make that determination, but don't feel guilty if that's how it shakes out. There are no guarantees they would find a buyer for "book value" in this day and time, and you're saving them some aggravation.
I'm sorry about your loss. I know things have emotional attachments, but my parting shot is that this car is, to use an expression I've heard elsewhere, neither your father nor your father's love. I think both you and your family should try to keep that in mind.
posted by randomkeystrike at 12:30 PM on May 9, 2011
just a thought dgran but if the assets of the sale of the sports car would be divided up 7 ways it seems that perhaps no one would be too offended to let the estate sell it to you for $7... unless the potential sales price is in the multiple tens of thousands... if you could provide the approximate potential sales price that might help this discussion too.... (IE if the car was going to sell for perhaps $20,000 then estate taxes would be about $2000 leaving $18000 to split 7 ways or about $2500 per person...) you could go to the 7 and say "look i'd like to have this car, it means a lot to me. If the estate sells it to me for a dollar i'll pay everyone $2000 after the fact."
They'll have no more or less paperwork to do and they get $2000 as a private sale of something else (say an authentic postcard from you).. the government gets less and there's a fair chance at least some siblings would likely say, no problem and keep the $2000, just take me for a ride once in awhile....
good luck, sorry for your loss.
posted by chasles at 12:32 PM on May 9, 2011
They'll have no more or less paperwork to do and they get $2000 as a private sale of something else (say an authentic postcard from you).. the government gets less and there's a fair chance at least some siblings would likely say, no problem and keep the $2000, just take me for a ride once in awhile....
good luck, sorry for your loss.
posted by chasles at 12:32 PM on May 9, 2011
chasles, you're recommending that the OP commit fraud. OP: don't do this.
posted by smorange at 12:46 PM on May 9, 2011 [1 favorite]
posted by smorange at 12:46 PM on May 9, 2011 [1 favorite]
I think you should offer a little less than FMV, minus 1/7 of what that would be. Because you are giving up your 1/7 of the asset return, since you're buying it. I don't think anyone should be offended by a little less than FMV, because you're doing them a favour by saving them the hassle of selling it and so on. You can point out that you also gave up the 1/7 of what you would have got. For example, if the FMV is $21k, you might offer $16k. If they'd sold it for $21k, you would have received $3k of that and then they would have had the hassle of selling it and so on.
If there is enough in the estate to cover your portion, perhaps you could say that you would like to offer $X, but you are willing to forgo receiving $X from the estate instead. Also, if there is a round robin of choosing items from the estate, you should probably graciously allow the others to go next on anything else. It depends how complicated the estate is. Also, if they can gift it to you instead and most of the estate is cash, you may be avoiding tax and sales tax and so on, and you should factor that into what you value the car at.
posted by acoutu at 12:48 PM on May 9, 2011
If there is enough in the estate to cover your portion, perhaps you could say that you would like to offer $X, but you are willing to forgo receiving $X from the estate instead. Also, if there is a round robin of choosing items from the estate, you should probably graciously allow the others to go next on anything else. It depends how complicated the estate is. Also, if they can gift it to you instead and most of the estate is cash, you may be avoiding tax and sales tax and so on, and you should factor that into what you value the car at.
posted by acoutu at 12:48 PM on May 9, 2011
Best answer: I had a whole answer written out, but I erased it after mulling over what arnicae said -- if this is an emotional situation already, then I'd pay what a third party says is the value and not try to get any money off the price. Why? Mainly because then no one has much of an argument that you're taking advantage of anything. Your points make total sense to me, and if this were an arms length transaction then I would give you much different suggestions.
Inspiration - is there a CarMax convenient to either of you? Can you go there, get the written offer, and then you pay what CarMax would have paid? I assume they would be a more accurate assessment of actual value than KBB, because there's a tangible offer.
posted by mrs. taters at 12:52 PM on May 9, 2011 [2 favorites]
Inspiration - is there a CarMax convenient to either of you? Can you go there, get the written offer, and then you pay what CarMax would have paid? I assume they would be a more accurate assessment of actual value than KBB, because there's a tangible offer.
posted by mrs. taters at 12:52 PM on May 9, 2011 [2 favorites]
Best answer: Ease of sale should be taken into consideration.
When my father-in-law passed away and my husband was handling his estate, the car was the most annoying part of the whole thing - it needed some repairs before it could be listed, he had people agree to see it who flaked, the guy who did end up buying it needed to take out a loan which involved my husband going to the bank with the guy to sign stuff, blah blah blah. It took a lot of my husband's time and energy.
If one of the family members had said "Okay, I'll take the car for [90% of Kelley/Edmund/whatever value]", my husband would've said "SOLD" and have been done with it.
posted by Lucinda at 12:53 PM on May 9, 2011
When my father-in-law passed away and my husband was handling his estate, the car was the most annoying part of the whole thing - it needed some repairs before it could be listed, he had people agree to see it who flaked, the guy who did end up buying it needed to take out a loan which involved my husband going to the bank with the guy to sign stuff, blah blah blah. It took a lot of my husband's time and energy.
If one of the family members had said "Okay, I'll take the car for [90% of Kelley/Edmund/whatever value]", my husband would've said "SOLD" and have been done with it.
posted by Lucinda at 12:53 PM on May 9, 2011
We did this in my family (10 siblings). One of my brothers bought my dads car , paying between dealer trade in and consumer to consumer prices from kbb TO THE ESTATE. The rest of us received 1/10th more liquid inheritance than the brother that bought the car.
posted by bricksNmortar at 1:04 PM on May 9, 2011
posted by bricksNmortar at 1:04 PM on May 9, 2011
The executor of the estate has to do due diligence in determining the value of the estate before dividing the assets as stipulated in the will. So the executor has to get FMV for the car unless he wants to open himself up to lawsuits. Remember money is thicker than blood. It may seem all nice and smooth now, but there is always the chance of one of the siblings feeling cheated and opening up a can of worms.
Offer the estate FMV ( lowest version of FMV is usually a trade-in value). You and the executor will have to figure out how you pay for it . ( You can get a used car loan or a personal loan.)
posted by Gungho at 1:27 PM on May 9, 2011 [2 favorites]
Offer the estate FMV ( lowest version of FMV is usually a trade-in value). You and the executor will have to figure out how you pay for it . ( You can get a used car loan or a personal loan.)
posted by Gungho at 1:27 PM on May 9, 2011 [2 favorites]
Why are you setting the price at all? Shouldn't the seller generally set the asking price for property being sold? The buyer can negotiate as appropriate, and try to influence the price the seller is willing to accept based on that starting point. But it sounds to me like you're negotiating against yourself here. Let your sibling set the price. Then decide whether the car it worth that price to you. If it is, and you can afford it, then buy the car. If it isn't, let your sibling find a buyer who's willing to pay that price. In this circumstance I don't think you can pay less than the asking price while also avoiding recrimination. A 3rd party buyer can offer less than the asking price, but only because the issue is devoid of emotion for them and they have no fear of offending your family.
posted by Jeff Howard at 3:31 PM on May 9, 2011 [2 favorites]
posted by Jeff Howard at 3:31 PM on May 9, 2011 [2 favorites]
(Upon re-read, I am not advocating tax avoidance. I just meant taxes should be considered as part of the equation. I have no idea what tax laws are in your jurisdiction.)
posted by acoutu at 10:22 PM on May 9, 2011
posted by acoutu at 10:22 PM on May 9, 2011
Response by poster: I really appreciate all the input offered here. There is no one right answer, but I'm inclined at this point to offer a little less than lower book price and be prepared to walk away from it gracefully if it looks like this will upset anyone. There is a good chance that everyone will still see this as a net positive.
posted by dgran at 6:19 AM on May 10, 2011
posted by dgran at 6:19 AM on May 10, 2011
Remember, plenty of times people will say that something seems fair. In the moment, sometimes they will even think it seems fair, too. But afterwards uncertainty can creep in which can mar relationships going forward.
Family example: cousin X received a bequest and needed to convert it to cash. Unable to easily sell it, cousin X asked aunt Y to buy the bequest from her. Aunt Y made an offer, Cousin X gratefully accepted. Five years later, X speaks bitterly of how they were taken advantage of by Y. For her part, Y now has the bequest for which a fair market value has been determined to be approximately 50-75% of the cash price she paid X. This financial loss doesn't matter to Aunt Y. What makes her sad is the fact that Cousin X now rarely speaks to her because of this situation.
posted by arnicae at 4:39 PM on May 10, 2011
Family example: cousin X received a bequest and needed to convert it to cash. Unable to easily sell it, cousin X asked aunt Y to buy the bequest from her. Aunt Y made an offer, Cousin X gratefully accepted. Five years later, X speaks bitterly of how they were taken advantage of by Y. For her part, Y now has the bequest for which a fair market value has been determined to be approximately 50-75% of the cash price she paid X. This financial loss doesn't matter to Aunt Y. What makes her sad is the fact that Cousin X now rarely speaks to her because of this situation.
posted by arnicae at 4:39 PM on May 10, 2011
Best answer: In these situations, I like to make the other person name their price. I then either accept it or walk away.
posted by gjc at 8:01 PM on May 10, 2011
posted by gjc at 8:01 PM on May 10, 2011
Response by poster: I just wanted to drop back in here to close the loop on this topic. In the end I took the advice to have CarMax do an appraisal and use that value for the purchase. This took a lot of stress out of the situation. Thanks to everyone who offered advice and suggestions.
posted by dgran at 12:37 PM on July 6, 2011
posted by dgran at 12:37 PM on July 6, 2011
This thread is closed to new comments.
posted by roomthreeseventeen at 12:01 PM on May 9, 2011