Advice needed in a unusual house purchase.

seanjenApril 23, 2012

Good day all, lurked for a while first time poster until now. We're a small family w/ two youngsters renting now for 4yrs in an awesome neighborhood great school district funky old rental house. Proposed to the current landlord to purchase the dwelling but the old couple want to hang on to it for their sons benefit. This neighborhood is very desirable and is mixed w/ different levels of architecture even w/ the downturn in the economy parcels are still being sold quickly when the come around. Onto my question the old lady whom lives across the street w/ a lot and 1/2 residing in a fairly ramshackled house has lost her cat recently, whom apparently meant everything to her. She's ready to move on and find some type of duplex or living arrangement closer to town w/o any maintenance and just easier living. Their hasn't been a lick of maintenance done in 15-20yrs on the house so it will need to be gutted down to the framework and new systems installed. I'm not worried about the structure since Ive been dealing w/ the construction of houses for the last 25yrs. Her dilemma is she cant sell the house due to the amount of money she'll be collecting form the sale which will throw her assistance she receives from the state out. I have not pried into what benefits she gets but in any-case the price we discussed for her parcel might be worth is very reasonable being this neighborhood. Im looking for creative ways to offer what she wants for the home but could help her out as well as me. She owns the house out right and also could probably qualify for low income housing if she obviously didn't have the house. Any thoughts about this would be much obliged. Thanks

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brickeyee

"Her dilemma is she cant sell the house due to the amount of money she'll be collecting form the sale which will throw her assistance she receives from the state out."

So tell her to spend her own money for awhile.

    Bookmark   April 23, 2012 at 12:37PM
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sylviatexas1

She needs to visit with an estate planner/financial advisor to see how to shelter the income.

People use financial/estate planning to keep their property in the family while they live at government expense in assisted living or nursing facilities.

Perhaps an owner-carry loan would work for everybody.

I wish all of you the best.

    Bookmark   April 23, 2012 at 2:42PM
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marie_ndcal

Maybe a lawyer would be better.

    Bookmark   April 23, 2012 at 2:43PM
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sylviatexas1

Marie is right;
she needs a lawyer who does estate planning.

    Bookmark   April 23, 2012 at 3:39PM
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seanjen

Very well, I would agree that she needs to spend her own money and she will in due time. As i described she's an old person w/o family and very little friends. I believe she's somewhat afraid of change she only knows what she's been doing for the last 20yrs, a bit out of touch w/society and a touch of a hoarder. Thanks for all the advice I'll check into an estate planner whom can help her/us out.

    Bookmark   April 23, 2012 at 11:12PM
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suz1023

maybe a simple lease to own would do the trick.
she gets the monthly payments and you get the house when she passes or whenever you agree.

    Bookmark   April 24, 2012 at 5:59PM
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sylviatexas1

If I were buying this home on an owner-carry note, I'd be very cautious about suggesting that I get "paid in full" house note in the event of the seller's death;

Firstly, buying a property via owner-carry doesn't make you an heir, & attempting to get someone to agree to such a thing can open up investigations of elder abuse and/or fraud.

Secondly, it creates a very bad conflict of interest;
buyer would have a lot to gain if seller were to die sooner rather than later!

(This is why you can't take out life insurance on someone without the insured's consent.)

Even if she were to agree to such a thing, the house may not even be hers to will:
Many programs now call for reimbursement upon the sale of property or death of the recipient.

If buyer can come up with a substantial down payment, owner-finance might work for both of them;
if the down payment is large enough for the seller to be able to afford to move!

If there's a way to get the house financed, seller can go to a new place, smaller, easier to care for, etc.

If she carries the note & dies before it's paid off, even if there's no "payback" due to any government program, buyer still would not be entitled to have the debt written off;
the note would become part of her estate, to be willed to an heir (even if she doesn't think she has an heir, you can bet one will show up!) or to be used to pay expenses, just like any other asset.

    Bookmark   April 25, 2012 at 4:37PM
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neesie

So, you're looking for a way to defraud the taxpayers?

    Bookmark   April 25, 2012 at 6:09PM
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texfoolette

My advice is: keep looking for a house/lot without these problems. Even if there's a legal way to hide the cash assets of her house sale (doubtful), it would be unethical and against the spirit of the law. Plus, dealing with a confused, depressed elderly woman without a family sounds like a no-win situation. I could see you putting months and months of assistance, running errands, acting as a substitute daughter etc. and still not getting what either one of you wants. Make her an offer and let her accept or reject it....and move on when she can't make up her mind.

    Bookmark   April 25, 2012 at 7:01PM
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brickeyee

"she gets the monthly payments and you get the house when she passes or whenever you agree. "

Or heirs assume ownership of the note until it is satisfied.

    Bookmark   April 26, 2012 at 10:58AM
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terriks

If you want the house, you should just offer her what it is worth to you. How she deals with her finances is none of her conern. I would definitely not get into an owner carry/creative financing situation.

    Bookmark   April 26, 2012 at 12:44PM
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terriks

I meant none of your concern.

    Bookmark   April 26, 2012 at 2:07PM
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