Options and old people

The old people in question are my parents.  My Mum's always been a "house mum" (don't know the currently politically correct way of saying this) and Dad's been self employed as a Truck Driver for the last 20 years, but in the evenings and weekends he's a farmer.  At heart though, he's a farmer that drives a truck because the farm is too small to pay the bills.

Recently, my Dad had slowed down a lot and was tired all the time. Mum blamed the long hours he worked with the truck and the farm and she was worried, I think, that in the end it would kill him.  So, since they were close to retiring, about a year ago they decided to sell the farm - something I thought would never happen - which would give them a respectable pension fund.  All way going fine with the sale until last week, when the survey was done.  It turns out the farm was one 25% smaller than they always thought it was (and had been paying council taxes on).

Yikes: no sale!

So, they told the buyers immediately and they came back with a new, slightly-reduced price - not surprising since, I think, its priced way too low.  But now my parents are deciding whether or no they should sell the farm at the lower price.

So, my Mum was telling all this today and over a 3 hour conversation we came up with at least 4 options, which I got her to write down, each on a separate piece of paper, along with pro's and con's.  For some reason having them on paper really helped the conversation.

The options were:

1. Sell the farm to the current buyers at the reduced price.  This gives them their cash & spare time.  But, odds are that Mum will murder my dad because, farm-less, he'll become incredibly annoying.
2. Sell the farm to myself and my brother and we lease it back to Dad.  This gives him the cash and gives us a fantastic deal, in the long term.  But, neither of us have the cash to fund such a large mortgage, nor the inclination or entrepreneurial instincts to develop the land later on.
3. Mum calls in three new estate agents and gets the farm revalued and kicks of the sale process again.  Downside is that the cash is delayed, but eventually they sell the farm, even though my Mum ends up murdering my Dad.
4. Mum visits the bank - and eventually several banks - and enquires about a small mortgage on the farm, worth about 10% of the farms value at today's prices.  This way they get to keep the farm, my Dad doesn't get murdered, my Mum doesn't end up in jail, they get plenty of cash to live on.  Oh, and realistically, one day my brother and I will inherit a farm that is, almost certainly, worth much more than the the interest paid on a relatively small mortgage.

Obviously option 4 is the best option, assuming it's possible, and I think it is.  But the point is: these are options - and they now have plenty of time to think them over.  In fact, my Mum has promised to look at options 3 and 4 on Monday by ringing real estate agents and banks respectively.  And, she can hold off on 1 for a couple of months.  Worse case scenario is that they lose their current buyer and have to start again.  Big deal, because of zoning complications the current deal has taken over a year to complete, and the property is probably worth more now than it was when they sold.

This is a long blog entry and a selfish one because I've used it to help think the situation through and make sure my advice was sensible.  Was it?  My parents originally dived into a single solution which maybe seemed best at the time.  As it happened, zoning complications kept their options open and the survey problem allowed them to re-evaluate their position; by writing the options down and keeping them all open until a clear winner emerges, or they have to make a choice, they're in a much better position.  Pheww!