Is this resale clause normal when buying from family estate?
Long story, but here's the Readers Digest version.
Grandma passed away suddenly in July. Mom and Aunt are her only children and co-executors of the estate. Estate will be split 6 even ways between the two of them and the 4 grandchildren.
They need to sell her house, owned free and clear. Mom wants to buy it as it meets her needs better than her current home. Aunt instsitng on a clause where if Mom sells it within the next 7 years any amount over her purchase price will be split among the other 5 of us. She believes this is fair as the price they are agreeing on, in her opinion, is below market value.
Problem is she is misguided in her belief on how much the house is worth. Her figure would be optimistic even if the house was perfect. But there is a vertical crack with lateral shift in the foundation wall where the front porch meets the house, and the roof is one long slope over that whole side. There is a mold issue in one corner of the basement (thank you, Irene and Sandy). The bedroom-turned-bathroom was never trimmed, and the floor is in disrepair. Plus it needs the general paint, etc most homes going on the market need.
The agreed upon price is actually what I think market value is at the moment, but would probably need a concession for the foundation and mold. So it is not "below market". Mom has no intention on "flipping" the house, nor does she have any means to do so.
Is this type of resale clause common for estate sales within the family? I tend to think Aunt is crazy. Mom is arranging for a bank appraisal, not sure how much that will help. Aunt claims she has a buyer willing to pay her unrealistic value, but if it appraises much, much lower I don't see how any buyer would be able to obtain a mortgage.
Any suggestions/thoughts? I have zero real estate expertise.