Buying a rural home from an elderly family member, relative or friend can pose problems. Understanding and patience will be needed.
Q: We are interested in buying the rural home and land that my 80 year old aunt and uncle live on. We are not really that close to them either geographically or as family but my brother lives on an adjacent property.
They approached him to see if he would help them find a buyer for the property when one of them dies. Their children are not interested in the property. This property has been in my family for many generations and we would like to keep it that way.
We would like to set something up now where we make payments to them and they live in the house as long as they want. We need your real estate guidance and advice on this issue?
A: Your first step might be to get more information from your aunt and uncle on their willingness to sell their home, their real estate, their house of probably dozens of years, to you now or create an arrangement with them to sell now but have the ability to live in the property for as long as they might want.
This first step is probably the most important. You want to make sure there is trust between all of you and you and they want to have a good understanding of what each party wants.
If your relatives want too much money for the property, it might be unrealistic to make a deal with them. If they are receptive on price, then you must understand their need to stay in the property until they die. Only if you and they can bridge this gap will you have the ingredients to make a deal.
You need to tread carefully with them, particularly if you don’t have a close relationship with them. Frequently when family members work on a business deal together at their stage of their life, they have to be skeptical as to the reasons a family member that has not been close to them suddenly appears out of the blue. In your case, your brother brokered the invitation, but even that might not be enough to soothe any fears they might have.
If you approach them and they are receptive to your interest, you can explore what they are truly looking to do with the property, their timeline, and their reasons for selling at this time, and any other issues that may go along with their intent to sell. The sale to them may be both from a business perspective but may also have an emotional component as well. If you are able to discuss these issues with them and you and they have a better understanding of the situation, then you’d want to talk to a real estate attorney in the state that they live in to help you out.
Depending on what your aunt and uncle decide to do, you could buy the property outright now and they could decide to move elsewhere. You could buy the property and give them a life estate in the property. A life estate would allow them to live in the property as if it was their own unlit they either move from the property or die. Another option could be that they sell you the property but require you to lease it back to them.
[ad#in_content_1500]Each situation has its benefits and drawbacks. If they retain ownership in the home, they might have to continue to maintain the home and property, pay the real estate taxes and insurance. However, if they transfer ownership to you, you might become obligated to pay the maintenance expenses and other costs of ownership of the property. And depending on the state in which the property is located, the real estate taxes may change dramatically depending on whether the property is a primary residence of the owner.
In conjunction with talking to a real estate attorney, you might want to talk to an estate planning attorney about these options. While a real estate attorney might be able to assist you with the legalities of the transfer of title and other related issues that have to do with the real estate, your aunt and uncle may have other things in mind when it comes to the real estate and their estate.
Since the home is a rural home, you may want to also consider other issues in dealing with your uncle. At times, people choose to live in a rural environment for particular reasons. If that’s the case, you need to consider the reasons why your uncle chose to live in a rural home for so many years. He may love nature, may love some of the isolation, he may love the way of life in a rural environment, or he may just love the home that has been in the family for generations. Each of these reasons are worth knowing and understanding when you move forward and deal with your relatives in the purchase and sale of their home. For them their home may be more than just a piece of real estate or land or a piece of property. It may mean much more than that to them.
It’s possible that the land is either a small part or large part of what they own and depending on the importance of the land to their life now, they may be looking to sell now to help them with their current expenses. Or, they may want to sell now to determine how to spend that money or where that money will go once they die.
When you deal with life and death issues of this type, it’s always a good idea to talk to a person that can walk you through the many issues that you and they will face. It’s truly an emotional and legal minefield that’s worth the discussion well in advance of making a final decision.
If you want to be prepared for your talk with your aunt and uncle, you could sit down with these attorneys now to have a general discussion of your options and the different paths that you can take. But make sure that you don’t use all that information in your preliminary discussions with your aunt and uncle; you want to hear what they have to say first.