Buying Parent’s Property - Posted by stephanie
Posted by stephanie on April 24, 2006 at 22:41:01:
We have a unique opportunity that requires some creativity and seems complex but am thinking there could be some viable options…
My parents live in Marin County CA, and are selling their home on a prime 2 1/2 acre hillside view property in a very desirable area. They are listing it for 1.3 million. Their dillema: They need to pay off apprx. 200K.
They wish to bank as much money as possible but still wish to purchase a smaller home in area for appx. 5-600,000.
After they get maybe a close to asking price offer, pay 6% commission, they will be looking at appx. $1,000,000 clear.
This leaves about 1/2 to purchase a new home and 1/2 to invest for retirement.
Our scenario: My husband and I love the property and city and would like to purchase it but can only pay 500,000 after selling our home. Want to make it a win/win for all. The parents really can’t afford to purchase another house in same city. Thought is to offer them $500,000 and to obtain a loan to fund a granny unit (1300 s.f.) to be built on the property for them to live. This way, they could remain in same city they love, have no neighbors and enjoy their view, and my family and I could move to some property.
Dilemma - My Dad is very conservative/old school and might think this a potentially good idea but worry that he would not “own” the land he lives on therefore, not build equity and his estate may not be equitable to his other adult children. (He would not own his new home as we funded it.)
Any ideas on how to make this offer very appealing for my parents but at the same time be beneficial for us? Should we offer to include parents to stay on title with a certain percentage or ? ?