Help me think this through - Mothering Forums
Forum Jump: 
 
Thread Tools
#1 of 29 Old 08-23-2011, 08:08 AM - Thread Starter
 
StephandOwen's Avatar
 
Join Date: Jun 2004
Location: Kentucky
Posts: 8,809
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

I debated on where to post this, but I guess this will work. I didn't want to post in frugality, because it doesn't really have to do with the financial aspect. I didn't want to post in PaP because it's not really an argument between dh and I. So.... I guess we'll stick it here.

 

DH and I live in a nice 3 bedroom house. It's in a decent neighborhood, but the neighborhood is going downhill lately. Our cars have been broken into, our neighbors cars are broken into, people are walking through our backyard all the time (so it's not safe to leave ds out there without direct supervision at all times), things are being stolen from garages during the daytime even (the police came and left notices on our door that this is happening and warned everyone to keep their garages closed at all times). The house a couple houses down has had some trouble (cops over there quite often). We had planned on living here for a few more years until I get out of school and get a good job. However, with things going the way they are, dh doesn't feel comfortable living here anymore.

 

We started looking around at houses in our price range, in the neighborhood we want to move to (the "nice" part of town that has the really good school district). There are a few options, some of which might be do-able.

 

DH's parents live in a really really nice neighborhood. Virtually no crime, $300,000-$500,000 houses, perfect school district, etc. They have recently decided that they want to move. Their house is huge and they have no need for it anymore (this is the house that dh grew up in). MIL hurt her back really bad and can barely walk up and down the stairs so half of their house is useless to her. They really want to downsize and move somewhere smaller with 1 level (no stairs).

 

DH and FIL were talking and threw out the idea that we could sell our house to MIL/FIL for $1 and they could sell their house to us for $1. We would give them all the equity we have in our house, plus some extra. We would take over their monthly payments (since we wouldn't be buying it for what it's really worth- we would just have to pay what they have left on the mortgage). They would sell our house and buy a house that they wanted.

 

Financially- this is an awesome idea for us. It's pretty much the only way we could get into this neighborhood and school district anytime soon. It's a huge house (far more space than we really need, but will appreciate when our boys are teens!). It's in a great neighborhood (no real fears of crime). It would be the last house we would need to buy until retirement (since we would be in the school district we really want the boys to go to). We would never ever be able to get a house like this, in this neighborhood, for what we would be paying. Our monthly payment would go up from what we're paying now (about $450/month more) BUT it's really only about $200/month more than we were paying 4 years ago on this house (we've refinanced to get lower interest rates). We could swing it financially (my dh is a finance major so would never be considering this if he didn't think we could swing it) on dh's income alone (I don't plan on going to work full time for another couple years).

 

A bonus is- we've been really hesitant to move because my ds has autism and moving will be a huge issue for him. We've talked to him about it and he hates the idea of moving. He loves his house and would have a very hard time adjusting to a new house. BUT, he already knows MIL/FIL's house so I think the adjustment to moving there would be much easier. This house is within walking distance to a park (HUGE bonus!). Since the house is so big we would be able to make a large room into a sensory/therapy room for ds.

 

One con is that there's no way to fence in their backyard, which is something I really really wanted with our next house. Because of the layout of it, it's just not possible. This makes me nervous (ds is a runner so having a fenced in backyard would have been very beneficial for him).

 

One more pro is that it is going to be very very hard to find a house that my dh and ds can live in, due to their allergies. DH had this current house built just because he couldn't find a used house that he could live in. Buying a used house will mean lots of renovations to try and get it to the point where their allergies aren't affected. There is no new building in the school district we want to be in, so that's not an option. But if we buy MIL/FIL's house then we know the allergy stuff is a non-issue. We also know the history of the house and what's been replaced (pretty much everything has been replaced in the last few years so we wouldn't have to worry about it for a long time).

 

Emotionally, I'm not convinced. As some might know from my crazy MIL threads here, she is very controlling, manipulative and probably has some sort of mental illness right now (she's been threatening suicide lately). I'm very very hesitant to get tangled up in this web. I'm not convinced she would be able to let go of this house that was hers for so long, emotionally. I fear that she would still consider it "her" house. I fear her getting upset if I were to let her flower gardens go (they are beautiful, but I have other things that require my attention) or if we were to make some changes to the house that she doesn't agree with. I'm just not sure if this is a good thing, emotionally, for everyone involved. DH seems to think it's fine and his mom won't do any of those things (I think he's delusional).

 

DH and I decided to put this idea on the back burner for 6 months (during which time we'll be putting the $450 difference in a bank account that will remain untouched, just to prove to ourselves that we can afford the new house payments with no problems). After 6 months, we'll talk about it more. MIL came over last night and made some comment about how we won't have to worry about how to install a gate on our stairs. I said "why not? We plan on being here in 9 or 10 months when the baby starts getting mobile". She just grinned and said "that's not what Jason says". headscratch.gif  MIL has apparently decided that we're moving when she says we are, not when we say we are duh.gif

 

 

Phew, this got really long. Kudos to anyone who made it through! I'm not really expecting much advice or "do it" or "don't do it" (though you're welcome to say it lol.gif). I just had to get all this off my chest as a way to think through it more.


Steph, DH Jason (1-1-11), DS Owen (10-3-03) and DS Kai (10-13-11)

StephandOwen is offline  
#2 of 29 Old 08-23-2011, 08:41 AM
 
Join Date: Sep 2008
Location: Cover letter he!!
Posts: 6,548
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

Hmm....The only thing I would say that you MUST do, if you go through with this, is have a lawyer experienced in real estate law draw up all the papers.  Don't rush into it (I know you won't and I think waiting 6months while putting the extra money away is a great plan), but even after the 6mo waiting period go into it knowing that working with a lawyer to draw up the papers, and negotiate all the terms will take some time.  If your MIL can't handle waiting, or wants to impose her own terms too much, then don't go through with it. 

 

And, keep looking - you might find something in your price range that is a better fit, or that will work better in some ways.  A move will be a huge adjustment for Owen, but if its to a nice house in a safer neighborhood, then you are doing the right thing.  Kids shouldn't always be sheltered from change - you have the tools to help him through an adjustment like this, and it is one that he will face again in his life - when/if he goes to college, when he moves into his first apartment, his first home.  The experience might be valuable to him, and will teach him skills that he will definitely need later in life.   

Super~Single~Mama is offline  
#3 of 29 Old 08-23-2011, 08:49 AM
 
hildare's Avatar
 
Join Date: Jul 2009
Location: in-the-sticks-off-a-dirt-road, GA
Posts: 2,692
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

with the MIL situation you describe, i think you'd be better off finding something on your own.  there are ways to gently transition your child, but i wouldn't want to be in a situation where a controlling mil had prior ownership and could possibly not understand that it was no longer hers. 


Is it getting lonely in the echo chamber yet?

hildare is offline  
#4 of 29 Old 08-23-2011, 08:53 AM
 
Irishmommy's Avatar
 
Join Date: Nov 2001
Location: In the bat cave with heartmama
Posts: 45,981
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Check with a lawyer. Your ils might have 2 sets of land transfer tax to pay, selling two houses (but if you don't have land transfer tax, ignore me).

Could you, when over there, make a point of saying things like "I won't have time to do the flower beds when we live here" or "I'll change that when we live here" kind of thing, to see how she reacts? If she gets up in arms now, when it's hypothetical, I wouldn't want to see her when it's real.
Irishmommy is offline  
#5 of 29 Old 08-23-2011, 09:15 AM
 
Mulvah's Avatar
 
Join Date: Aug 2008
Posts: 1,971
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 1 Post(s)

If you go through with it, definitely talk with a CPA and a lawyer.  You are going to want to do this in the most affordable manner.

Mulvah is offline  
#6 of 29 Old 08-23-2011, 09:41 AM
 
AllyRae's Avatar
 
Join Date: Dec 2003
Location: Ohio
Posts: 6,391
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

It sounds like a fantastic opportunity for you guys (minus the crazy).  However, the one thing I can think of...having been in your house, aren't all the bedrooms upstairs?  How would MIL be able to use the bedroom if she can't climb stairs?  And does she realize that the chances of selling a house for what it's worth in this market are pretty slim.  And getting worse.  (They're now saying 2011 is the worst year on record for home sales).  I mean, even almost 1.5 years ago when we sold our house, we had $50k worth of equity in our house, but had to sell it for barely above what we bought it for 6 years prior.  So, doing the math, we LOST almost $45k on the sale.  And things are worse now.

 

So, they really need a plan on how to survive in your house until the market turns, unless your area has a freakishly good economy.  I just don't want you guys to have to deal with the fact the house isn't selling and now MIL needs to move in to your house because she can't climb stairs, etc.


~Brandon Michael (11/23/03), Jocelyn Lily Nữ (2/4/07, adopted 5/28/07 from Vietnam), Amelia Rylie (1/14/09), & Ryland Josef William (9/7/05-9/7/05 @ 41 wks). 
AllyRae is offline  
#7 of 29 Old 08-23-2011, 09:52 AM - Thread Starter
 
StephandOwen's Avatar
 
Join Date: Jun 2004
Location: Kentucky
Posts: 8,809
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)


Quote:
Originally Posted by Irishmommy View Post
Could you, when over there, make a point of saying things like "I won't have time to do the flower beds when we live here" or "I'll change that when we live here" kind of thing, to see how she reacts? If she gets up in arms now, when it's hypothetical, I wouldn't want to see her when it's real.


This is definitely something I plan on doing ONLY when dh is right with me so he can witness it.
 

Quote:
Originally Posted by AllyRae View Post

It sounds like a fantastic opportunity for you guys (minus the crazy).  However, the one thing I can think of...having been in your house, aren't all the bedrooms upstairs?  How would MIL be able to use the bedroom if she can't climb stairs?  And does she realize that the chances of selling a house for what it's worth in this market are pretty slim.  And getting worse.  (They're now saying 2011 is the worst year on record for home sales).  I mean, even almost 1.5 years ago when we sold our house, we had $50k worth of equity in our house, but had to sell it for barely above what we bought it for 6 years prior.  So, doing the math, we LOST almost $45k on the sale.  And things are worse now.

 

So, they really need a plan on how to survive in your house until the market turns, unless your area has a freakishly good economy.  I just don't want you guys to have to deal with the fact the house isn't selling and now MIL needs to move in to your house because she can't climb stairs, etc.


They wouldn't live in our house. This is where another hesitation comes in, on my part. Basically, all the stars have to align perfectly in order for this to go off without anything going wrong. Otherwise, we would "sell" each other houses (so they would own ours and we would own theirs), but we would continue to live in the house we're in now until it sells. If this house sells before MIL/FIL move out of their house (which would be our house) then we're screwed. DH says we would rent an apartment until MIL/FIL move out of their house but I see this turning into a nightmare because they would technically be living in our house (their old house that they would have sold to us) while we're renting an apartment, waiting for them to move out. DH knows there's no way in h*ll I would move into a house with them. Not gonna happen. Ever. But if MIL decides to pull her crazy card and refuse to move out (which, sadly, I wouldn't put past her), then we're in a predicament where we would have to get the police involved.

 

I'm not too worried about our house selling. Even though the neighborhood has gone downhill in the past couple years, it's still a desired neighborhood- even more now because they just built a new elementary school that we are redistricted to (but we kept Owen in his old school). This new school is actually really cool (very "green") and people are tripping over themselves to get into the district for this school. So for the past couple years, the housing market has been a bust in our neighborhood, but now house sales are picking back up. It's actually the perfect time for us to sell right now.


Steph, DH Jason (1-1-11), DS Owen (10-3-03) and DS Kai (10-13-11)

StephandOwen is offline  
#8 of 29 Old 08-23-2011, 09:56 AM - Thread Starter
 
StephandOwen's Avatar
 
Join Date: Jun 2004
Location: Kentucky
Posts: 8,809
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

And I suggested that if the house we're in right now sells before MIL/FIL buy a new house, that they are the ones to move into an apartment (much easier for them to do that instead of us with 2 kids, 1 with autism who has a hard time adjusting to new things anyway). But, knowing MIL, she would never agree to it. She's one stubborn old lady.


Steph, DH Jason (1-1-11), DS Owen (10-3-03) and DS Kai (10-13-11)

StephandOwen is offline  
#9 of 29 Old 08-23-2011, 10:14 AM
 
AllyRae's Avatar
 
Join Date: Dec 2003
Location: Ohio
Posts: 6,391
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

LOL....I guess the term "stubborn old lady" had to come from somewhere... ;-)

 

I told Dave about this and the first thing out of his mouth was "WHOA!  Nice control tactic...sell them their mansion, and then Steph and Jason can't leave the state.  Then they can move right next door or somewhere else really close and Steph would never get away from her for peace."

 

So um, guess he gets it. LOL!


~Brandon Michael (11/23/03), Jocelyn Lily Nữ (2/4/07, adopted 5/28/07 from Vietnam), Amelia Rylie (1/14/09), & Ryland Josef William (9/7/05-9/7/05 @ 41 wks). 
AllyRae is offline  
#10 of 29 Old 08-23-2011, 11:33 AM
 
Kyamo's Avatar
 
Join Date: Jun 2006
Location: Canada
Posts: 1,360
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

Have you talked to a lawyer and/or the bank about this, to find out if you can actually easily assume each other's mortgages like that?  If you are going to legally own their house, the name on the mortgage has to change too.  That change might involve fees or interest rate changes.  Even if the bank allows the mortgage switch without taking out a new mortgage, wouldn't the mortgage amount be part of the "purchase price" such that it wouldn't be $1?   

 

I dunno, I have done within-family car and house transactions in the past and don't regret it, but that is because I trust the people involved to hold up their end of the bargain and not do crazy things.  If I didn't trust them in that way (as it sounds like you don't), I would never do it.  


Mommy to  N baby.gif, born 2/20/12.

Kyamo is offline  
#11 of 29 Old 08-23-2011, 01:03 PM
 
Caneel's Avatar
 
Join Date: Jun 2007
Location: Small town in a rural area
Posts: 3,869
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)


Quote:
Originally Posted by Kyamo View Post

Have you talked to a lawyer and/or the bank about this, to find out if you can actually easily assume each other's mortgages like that?  If you are going to legally own their house, the name on the mortgage has to change too.  That change might involve fees or interest rate changes.  Even if the bank allows the mortgage switch without taking out a new mortgage, wouldn't the mortgage amount be part of the "purchase price" such that it wouldn't be $1?   

 

 

I worked in banking for a number of years.  I am 99.99% certain you will not be able to assume your ILs mortgage.  When they "sell" the house to you, the transfer will require that the existing mortgage to be paid off to clear the mortgage lien against the property.  In order to transfer the property to you, they will need to pay off their existing mortgage.  Do they have the cash to pay it off? 

 

It may be feasible for you and your DH to get a new mortgage loan in the amount needed to pay off the existing mortgage.  This can happen at the same time as the property transfer but that means you aren't paying a $1 for the house, you are buying it for an amount equal to the existing mortgage amount.   Also, you will incur fees associated with the new loan, closing costs, title insurance and legal fees.   Not that it couldn't be a good deal for you but the entire situation is probably a lot more involved than your ILs realize.

 

Could they be thinking that you all will do this without a lawyer/proper documentation?  Like you move in and just pay their mortgage until things "fall into place" as they relate to the sale of your house?   If so, I don't think you need me to tell you that is not a good idea.   

 

I did see some wacky stuff go on with commercial loans (the .01% of my certainty) but those transactions require loan modifications, collateral swaps, etc. that don't pertain to primary residence, traditional mortgage loans.


Mom to DS, born fall 05 after ,,, wife/best friend to DH We have
Caneel is offline  
#12 of 29 Old 08-23-2011, 11:54 PM
 
LiLStar's Avatar
 
Join Date: Jul 2006
Location: WA
Posts: 3,359
Mentioned: 2 Post(s)
Tagged: 0 Thread(s)
Quoted: 20 Post(s)

About the legal aspects of transferring mortgages, my mom did that to sell to my brother somehow. I'm.. actually not sure exactly the details. I DO know that my brother's mortgage broker friend did it very "creatively" and it may have been somewhat borderline. I think what they called it was quit claim, and I honestly don't know what that means :P


dd (7) ds (5), ds (2) &3rdtri.gif hbac.gif and the furbabies cat.gifZeus, Dobby, Luna, & Ravenclaw
LiLStar is online now  
#13 of 29 Old 08-24-2011, 05:14 AM
 
Join Date: Sep 2008
Location: Cover letter he!!
Posts: 6,548
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

It is possible to "assume" someone's mortgage, I had to learn that to take the bar exam.  I don't know how to do it though - which is why you would need to consult with an attorney VERY experienced in real estate, specifically mortgages.  If your MIL is going to be a PITA about it though, it might not be worth it.

Super~Single~Mama is offline  
#14 of 29 Old 08-24-2011, 06:00 AM
 
Mulvah's Avatar
 
Join Date: Aug 2008
Posts: 1,971
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 1 Post(s)

I know you aren't really looking for "do it/don't do it" opinions, but with the little you've said about your MIL, I might not do it.  Or, if you are going to entertain it, definitely don't get your hopes up that it would work out.  I hate to sound negative, but it doesn't sound like she is the type of person that would make this seamless.
 

Quote:
Originally Posted by LiLStar View Post

About the legal aspects of transferring mortgages, my mom did that to sell to my brother somehow. I'm.. actually not sure exactly the details. I DO know that my brother's mortgage broker friend did it very "creatively" and it may have been somewhat borderline. I think what they called it was quit claim, and I honestly don't know what that means :P


You would have to transfer the mortgage, too, not just the deed.


Quote:
Originally Posted by Super~Single~Mama View Post

It is possible to "assume" someone's mortgage, I had to learn that to take the bar exam.  I don't know how to do it though - which is why you would need to consult with an attorney VERY experienced in real estate, specifically mortgages.  If your MIL is going to be a PITA about it though, it might not be worth it.


It's possible, but not with every loan, not with every bank, and not in every scenario.

 

Mulvah is offline  
#15 of 29 Old 08-24-2011, 06:06 AM
 
gingerbane's Avatar
 
Join Date: Jun 2007
Location: With my DH
Posts: 876
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

Nope, I wouldn't do it.  One reason is your MIL.  I've read your threads about her before and would not enter into this kind of deal with that woman and expect a good outcome.  The second reason is, your first post sounds like me when I am trying to convince myself of something that sounds good but isn't a perfect fit.  I think parts of it 'sound' nice but it seems like in your heart you're already thinking of complications and hardships that will go with this deal as well.

gingerbane is offline  
#16 of 29 Old 08-24-2011, 06:08 AM
 
crunchy_mommy's Avatar
 
Join Date: Mar 2009
Posts: 6,501
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
I'll be honest, given your description of MIL, this sounds like a horrible idea.

And the biggest benefit to your DS -- the familiarity & less disruption etc. -- will be out the window if your house sells before the in-laws move out and you have to rent somewhere new indefinitely etc.

I'd be tempted, too, but do you really want to be that entwined with them???

Co-sleeping is really wonderful when your child actually SLEEPS!! familybed1.gif
crunchy_mommy is offline  
#17 of 29 Old 08-24-2011, 06:25 AM
 
Join Date: Sep 2008
Location: Cover letter he!!
Posts: 6,548
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)


Quote:
Originally Posted by Mulvah View Post


It's possible, but not with every loan, not with every bank, and not in every scenario.

 



Right, which is why they need a lawyer who specializes in this area.

Super~Single~Mama is offline  
#18 of 29 Old 08-24-2011, 07:17 AM
 
Imakcerka's Avatar
 
Join Date: Jul 2011
Posts: 4,065
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 6 Post(s)

Wait... if it's all in writing... then... really it's not a bad idea.  Also, I have to point out that I have a terrible sense of humor.  But how long do you think MIL will still be kicking?  I mean if she's already having problems how often do you think she'll be making a trip to your new house?  And whats a little water in the garden if it's already beautiful and someone else did all the work already? 

 

I say go for it.  Theres few chances in life worth taking, if it goes south, you're still out of that neighborhood and I'd get out before your house prices drop and selling it turns into a nightmare!

 

Imakcerka is online now  
#19 of 29 Old 08-24-2011, 07:29 AM
 
Katwoman's Avatar
 
Join Date: Apr 2004
Location: Alaska
Posts: 665
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

You need to talk to a CPA.  When I tried to buy my parents piece of property - to keep it out of foreclosure - for a $1 I was told when I sold it for fair market value, I would have to pay capital gains tax on the difference between the $1 and what I sold it for.  It would also be worth asking if there was tax implementations for selling property so far under market value.  (I'm thinking about the people that short sale and if the bank "forgives" what they owe, I've heard the IRS can tax that amount.)  

 

Katwoman is offline  
#20 of 29 Old 08-24-2011, 07:53 AM - Thread Starter
 
StephandOwen's Avatar
 
Join Date: Jun 2004
Location: Kentucky
Posts: 8,809
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

All excellent points! I will make sure we (dh and I) talk to a lawyer and the bank about this in much more detail before we consider it. Thanks!


Steph, DH Jason (1-1-11), DS Owen (10-3-03) and DS Kai (10-13-11)

StephandOwen is offline  
#21 of 29 Old 08-24-2011, 10:03 AM
 
mamalisa's Avatar
 
Join Date: Sep 2002
Location: Germantown WI
Posts: 8,427
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

Not with your mother in law.  

mamalisa is offline  
#22 of 29 Old 08-24-2011, 12:28 PM
 
choli's Avatar
 
Join Date: Jun 2002
Posts: 4,433
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)


Quote:
Originally Posted by mamalisa View Post

Not with your mother in law.  

Seriously, no. That would be handing her a stick to beat you with for the rest of her life.

choli is offline  
#23 of 29 Old 08-24-2011, 01:39 PM
 
onlyzombiecat's Avatar
 
Join Date: Aug 2004
Location: Northeast Kansas
Posts: 7,413
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

I would say no and keep looking for something on your own.

The pros are nice but the deal comes with so many complications and potential headaches that would outweigh all of the pros for me.


Kim ~mom to one awesome dd (12)

onlyzombiecat is offline  
#24 of 29 Old 08-24-2011, 05:59 PM
 
MadiMamacita's Avatar
 
Join Date: Jan 2006
Location: Bend, OR
Posts: 3,939
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by Imakcerka View Post

how long do you think MIL will still be kicking?


that was my initial reaction, too smile.gif

 treehugger.gif *CPST*  mama to my three year old DS1 broc1.gif1.31.09 and wedded to angel 8.07  hola.gif

DS 2  waterbirth.jpg 8/18/12!!

 
 

MadiMamacita is offline  
#25 of 29 Old 08-24-2011, 07:08 PM
A&A
 
A&A's Avatar
 
Join Date: Apr 2004
Posts: 16,858
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 6 Post(s)

I don't know if that would legally work if there are still any mortgages to be paid.  And please be considerate of your neighbors...............the recorded price on home sales greatly affects future appraisals for everyone in the area.


"Our task is not to see the future, but to enable it."
A&A is offline  
#26 of 29 Old 08-25-2011, 06:15 AM
 
Kyamo's Avatar
 
Join Date: Jun 2006
Location: Canada
Posts: 1,360
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)


Quote:
Originally Posted by Katwoman View Post

You need to talk to a CPA.  When I tried to buy my parents piece of property - to keep it out of foreclosure - for a $1 I was told when I sold it for fair market value, I would have to pay capital gains tax on the difference between the $1 and what I sold it for.  It would also be worth asking if there was tax implementations for selling property so far under market value.  (I'm thinking about the people that short sale and if the bank "forgives" what they owe, I've heard the IRS can tax that amount.)  

 



I think there is an exemption from capital gains tax for your primary residence.    


Mommy to  N baby.gif, born 2/20/12.

Kyamo is offline  
#27 of 29 Old 08-25-2011, 08:13 AM
 
limabean's Avatar
 
Join Date: Aug 2005
Posts: 9,591
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 9 Post(s)


Quote:
Originally Posted by A&A View Post

And please be considerate of your neighbors...............the recorded price on home sales greatly affects future appraisals for everyone in the area.


That was my first thought too. I'd be so upset if someone in my neighborhood sold their house for $1 and devalued all the surrounding homes. 

 


DH+Me 1994 heartbeat.gif DS 2004 heartbeat.gif DD 2008 heartbeat.gif DDog 2014
limabean is online now  
#28 of 29 Old 08-25-2011, 11:31 AM
 
Katwoman's Avatar
 
Join Date: Apr 2004
Location: Alaska
Posts: 665
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)


Quote:
Originally Posted by Kyamo View Post





I think there is an exemption from capital gains tax for your primary residence.    


If you live in it as a primary residence for more than two years.

 

Katwoman is offline  
#29 of 29 Old 08-25-2011, 07:30 PM
 
Cheshire's Avatar
 
Join Date: Dec 2004
Location: My yellow submarine
Posts: 2,183
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)


Quote:
Originally Posted by A&A View Post

I don't know if that would legally work if there are still any mortgages to be paid.  And please be considerate of your neighbors...............the recorded price on home sales greatly affects future appraisals for everyone in the area.



Where I'm at the real estate agents enter the sales price into their multi-listing database and that is what appraisers base their appraisals from.  There isn't a formal "recording" of the sales price.  If you take out a mortgage the paperwork might be filed at the courthouse but even that isn't a reflection of the sales price (it doesn't show if there was any kind of down payment - just the total of the amount borrowed).  If you sale your home on your own without using a real estate agent the price won't be in their system, either.

 

So, if you do all of this through an attorney the "sales" price shouldn't be recorded anywhere.  And, with mortgages outstanding, my guess is you won't be purchasing the house for $1, you'll just be purchasing it for the outstanding balance to pay off the current banks. 

 

If there is a lot of equity in the in-laws home you may want to talk to an attorney as well as a CPA to see if the equity would be considered a gift.  If your in-laws are elderly, without a lot of assets, etc., you need to talk to someone about the five year look-back period on Medicaid (if you think they might need nursing home care in the next five years and apply for medicaid to help pay they'll be very interested in this house exchange).

 

But, personally, if I were in your shoes, I'd find another house and only put my kids through one move.  For me, the risks of everything going wrong and Murphy's Law coming in to play far outweigh the benefit. 

 

Best wishes on whatever decision you make.

Cheshire is offline  
Reply

Quick Reply
Message:
Drag and Drop File Upload
Drag files here to attach!
Upload Progress: 0
Options

Register Now

In order to be able to post messages on the Mothering Forums forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.
User Name:
If you do not want to register, fill this field only and the name will be used as user name for your post.
Password
Please enter a password for your user account. Note that passwords are case-sensitive.
Password:
Confirm Password:
Email Address
Please enter a valid email address for yourself.
Email Address:

Log-in

Human Verification

In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.



User Tag List

Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page


Forum Jump: 

Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off