Buying a house from parents
Get Legal Help Today
Secured with SHA-256 Encryption
Buying a house from parents
I am living in my parents home and paying rent. I was getting ready to buy the property for $50,000 which it was appraised for over $100,000. They were going to gift the difference to me. I live in Pennsylvania. Recently my dad was admitted to the hospital and is not doing well. They want to put him in a nursing home. Now is if I buy the home now,will the nursing home come back on me for
the difference in the price of the home.
Asked on May 17, 2019 under Real Estate Law, Pennsylvania
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 2 years ago | Contributor
Yes, if you buy the home for less than market value, the nursing home or state health age funding your father's care (assuming he does not pay for it all out of pocket) would have the right to seek the difference in value and could do so by putting a lien on the home or undoing the transfer to you and forcing its sale. To force people to pay for their own care (instead of making the taxpayers pay), the law allows any transaction, transfer, sale, etc. which is done for less than fair market value to be voided, so that people cannot "hide" their assets and avoid using them to pay for their own care. This is not the time to purchase the home for less than FMV. Mind you, you can buy get it and get a good deal, but is has to fall within the following parameters:
1) Homes don't have a single FMV: they could reasonable\y sell for a range of prices (e.g. a home appraising for $110k could reasonably sell for, say, $99k to $120k+, depending on the market, how motivated the buyers are, whether the sellers are able to wait for the perfect offer or not, etc.). You could reasonably buy the home for near the bottom of the reasonable price range for it.
2) Since there is no realtor fee if a direct sale to you, you could knock off a few percent for the savings in commisions.
3) If the home can be shown (such as by a professional home inspector) to need a few thousand dollars of repairs, you could reasonably buy it for a slightly reduced price to reflect that, since otherwise, your father would have to put money into the home to repair it.
So you can get the home for a good price, but it still needs to be a fair price given the circumstances, and within the bounds of what a 3rd party, buying it under similar conditions (e.g. without a realtor; taking it without requiring repairs) would pay.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.