Quote:
Originally Posted by unionjack3902
I'd like some honest opinions please. My wife and I both in our mid 50's found a house for sale orig 60k, dropped 5k in 3 months. We want to offer 45k, put up a 25%dp with 36 payments of $938.00 and monthly rent of $400.00 for the same 36 months, contingent on home inspection and deed/lien search. Owner bought in '88 for 36k and is now 92 yrs old, so we will structure payments to her and her estate with no pre payment penalty and no balloon. We will also pay property taxes/ home insurance, and maintain property with no major alterations to structure untill full sale complete. This will give her a lump sum and monthly income, and we will not be paying closing costs and assoc. banking fees. Anu opinions onthis and is there anything I left out to be concerned about?
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Typically when an owner takes back a mortgage they should be getting at least full market value because they are essentially taking an annuity.
We have no idea what the market value of that house is, so no one can tell you if 45k is a fair price. However, what the owner paid in '88 has no bearing on the current value of the home.
Here is what I think you are spelling out in the terms
45,000 purchase price
-11,250 down payment
33,750 balance paid in equal payments for 36 months
937.50 x 36 = 33,750 so you are suggesting paying this balance off in 36 months without interest. However there is a 400/month rent, which is unusual.
400/month rent. Are you going to live in the home and pay her rent? If you own the home (with a trust deed to her benefit) then you won't pay rent. To pay rent requires a lease of some sort. That 400 should be in the payment so that the mortgage payment would be 1,337.50. That way if you don't make that payment she can foreclose.
She is 92 years old. Where is she going to live when she has to move from her home?
Today she owns the home free and clear. Why would she want to sell the home that she owns free and clear, and has been in for 24 years.
If I were going to do any type of transaction with a 92 year old lady, I would make sure she had a trusted family member or her attorney involved so she has the guidance to make an educated decision.
To structure a transaction like this without her having family or legal guidance could come back to haunt you if one of the family members later comes forward to declare that she did not have the mental capacity, nor proper representation, to enter into a binding contract to sell her property.
Recently I was called by a lady to list her home for sale and help her buy a smaller place. When I looked into the smaller type unit and location she was mentioning, and the reasons she stated for moving, it just did not make sense.
Then over the next few days during conversations and stories she told me, it seemed to me that she may be affected by dementia. The way I saw it, this lady was much better off staying where she is than to make the type of move she was describing. She is in a nice community with good neighbors.
Since there was the appearance of dementia, I told her that I would like to talk to one of her sons, who live in the valley, so they could give us some assistance in this matter. (I was not going to enter into a listing contract with this lady to sell her home, "suspecting" that she did not have the mental capacity to make that decision.)
She said she would have one of her sons call me, but so far neither of the sons has contacted me. I doubt if they will, because at the moment she is much better off than she would be if she made the type of move she was discussing with me.
So my suggestion to you is to get some legal advice before entering into the transaction you describe.
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