Q: My elderly neighbor is thinking about selling his house and moving to a smaller space. He doesn’t really want to leave the house. I’d like to buy his house, so that I have control over the land.
Someone suggested that I buy the house from him at a reduced rate and create a life estate so that he can stay in the house and not have to worry about the upkeep or maintenance. I think this might work well for both of us, but I don’t know how to go about it.
A: A life estate sounds like a great idea, as long as you have enough cash to pay the maintenance, upkeep and cash to the seller.
A real estate attorney can draft up the paperwork. But before you start talking about a life estate, you might want to consider other options. What about a lease? He could lease the property from you for as long as you two agree.
A life estate may create issues that you might not want to deal with. He could have the life estate and not live at the property and you would have to wait for him to die before being able to do anything with the property.
The lease could be drafted that he would be the person allowed to live at the property and if the home ceases being his primary residence, the lease would terminate.
I’d sit down with your neighbor and see if he has any interest in selling his home to you and if he does what he would like to do. You first need to find out if he even wants to remain on the property if he sells it.
You will also need to talk to a real estate attorney to go over the various issues and draft documents to help you through the purchase of the property along with any other issues that need to be finished to allow the seller to remain on the property.