Cottage - How to handle situation?
My dad and his brother each owns half of the same cottage on title. His brother wishes to sell his half and from what I understand, my dad has the first right to purchase the other half. We can assume the cottage is probably worth close to $500K, I have no debts, and own my current home. I have so many questions on how to handle this situation.
1/ How does my dad and his brother each get a fair price for the cottage? Should each of them get a different appraiser? How can you trust these appraise values and how do you get to the final agreed price, average of the two? Real estate agents typically would give higher prices, just to get a larger transaction fee. Is the value of the cottage really just based on how much feet of water front?
2/ My dad is nearing retirement and would not purchase his brother's half. I would be the one buying it and in the end, he would want to transfer the his half of the title of the cottage to my name so I would own all of it. So he is going to "gift" me his half of the cottage. How does one handle the tax, if any, implications of this transaction. Gifting be done in lump sum or installments if there are tax advantages? Should the ownership of the cottage be transfer to a corporation?
3/ Since the value of half the cottage is high, I would like to get a mortgage if possible. How difficult would it be to get a mortgage from a bank or any other financial institution? How does the bank value or appraise a cottage property?
What other items should I consider for those who have experience in this situation? Thanks in advance.