This is a new one for me. My wife and I live in Virginia but have been staying in Florida with her mother due to MIL’s health. We really like the warm weather here and have been talking about buying a home here. We thought of a place with an in-law suite so her mother can move with us. Her place is too small for the 3 of us and we work from home.
Well, the other night MIL asked if we would carry a dish she cooked over to the neighbors. The gentleman has been sick and is on palliative care. Their daughter was there and we had a good conversation. We mentioned that we might move down here if we can find a place. She looked at her mother and both gave us a happy look but said nothing. The next day the mother and daughter came over to return the dish. They said they wanted to sell their house and wanted to know if we would be interested. We said certainly, but would need to look at it more, crunch numbers etc, but we would be interested in looking into it.
They then said there was one catch. They wanted to sell now so her mother could find a place close to the daughter. She wants to have it ready so that when her father passes, she can move right away. This is not a long term home for them and he has been sick since they moved in. She wants a fresh start without the memories. They are wanting to rent it back on a month-to-month basis with an agreement that the lease ends 60 days after his death. They would also put 10% in escrow to cover any expenses should they not move in time or to cover any damage. This is on top of a nice discount. I should mention that the daughter has power of attorney for the father, so he would not have to sign the sale papers. In fact, they don’t want him to know anything about it. He will be going into home hospice soon, so he will pass in the house. I don’t think their intentions regarding keeping it from him are with any bad intentions. He has a declined mental state and it would confuse and stress him.
I just wanted to get some thoughts on the deal as well as allowing someone to die in the house we are buying. Will it taint our perception of the home, feel creepy etc.
Seller wants to die in home before we take procession
byu/Hot_Lab4411 inRealEstate
Posted by Hot_Lab4411
26 Comments
Honestly this sounds like a pretty sweet deal if you can handle the emotional side of it. The month-to-month with 60 day buffer and escrow protection is actually really considerate on their part
The dying in the house thing… look, people die in houses all the time and you usually never know about it. At least you’d know this guy was loved and cared for there. Way better than finding out later someone got murdered in your kitchen or whatever
Just make sure your lawyer reviews that leaseback agreement super carefully because that’s where things could get messy
Who cares? People die in homes all the time you’re just not privy to the history of it. Shoot grandma and grandpa might be buried in some peoples backyard little do they know! Kidding.
But seriously, if the only thing turning you off is that someone will pass peacefully in the home then I think you’re focusing on the wrong thing here..
People die in houses all the time…….that isn’t the issue. The issue is the open-ended, unlimited, unspecified term of the leaseback they would have you agree to. What if he lingers another year or two? Do you want to be a landlord? If they run out of money and can’t pay their lease, are you willing to evict a dying man and his wife?
It’s not creepy at all to me if the numbers works. People have probably died in a lot of houses that we wouldn’t know about.
People die in homes all the time. This deal is a matter of patience, do you have it or not. You have no control over the timeline.
OK, so they want to sell the house but they want to retain occupancy until the father passes away. And exchange you’re probably gonna get a sweet deal on the property. When you go to get a mortgage, you are basically buying it as an investment property because you won’t be taking occupancy. Those types of mortgages with 3% down, 5% down or anything less than 20% down are for primary residence buyers. You’re likely going to need to come up with 25%. You would become an instant landlord. Not necessarily a bad thing and it could be a way to get into a property at today’s cost versus what it might be a year from now or more or maybe it’s only six months. Generally speaking, you have to take occupancy within 60 days for most primary residence loans.
This is definitely something you need to have further discussions about and possibly talk to an attorney that’s versed in these matters. You could construct a trust, whereby the current owners retain occupancy until the death of the father. There’s various ways you could go about this, but definitely speak to an attorney.
It could be worth it, but honestly it kind of depends on the circumstances of the father’s illness.
My co-worker’s dad was told he only had a few months to live but ended up being on hospice care for well over a year before he passed.
Just something to consider.
The death part isn’t the issue for me. It’s the issue that we are all gambling on that he will pass soon. My grandfather was on hospice for 4.5 years from bile duct cancer that we were told 3-6 months max. We only did palliative care because he had Alzheimer’s and we didn’t want to do unnecessary prolonging of life if it was just going to make him suffer. No one, and I mean no one, has an expiration date stamped on them. You never know how long someone has with us. He could die tomorrow. He could hold out and live for years. Would you be prepared to be a landlord if this carries on for longer than the typical 1-3 weeks hospice runs? That’s what most don’t think of because to them, hospice is a very finite amount of time and they don’t see the other side where it does go on for years sometimes because someone has a will to live.
A timely, natural death isn’t a dealbreaker for me.
The dying part wouldn’t bother me at all. The only issue would be how comfortable will you be with the open ended rent back. He could pass in days, months or over a year from now.
Of course, whatever you do have a lawyer draft, or review, any contracts or paperwork on this before you sign. Also, that long of a rent back might have implications for insurance and mortgage type that you need to consider and make sure it’s properly done.
If you really like the house, suggest putting a timeframe on it, like the earliest of his death or one year
Would the conversation feel any different? If the guy died in the house last week and now you’re finding out they have intentions on selling it?
It’s really no different. They don’t want to move the guy right now knowing the time is coming.
The only concern would be… Do the numbers work for you… And how long is this guy expected to live?
There was a case in France about fifty years ago. An attorney purchased an apartment in Paris from his older (late 60s) client, who didn’t seem in the best of health. The deal was that the client could live there until she passed, then he’d take possession.
She lived another 40 years, reaching just over 100. 😱 He died almost fifteen years before she did, and his wife had to continue to honor the deal. 😳
That’s a big ole NO not happening if I’m the buyer
You have another option besides a lease back. You can buy the house now, and give them a life estate. This is sometimes called a ladybird deed. It lets the seller remain in the house as a tenant as long as they wish (or are alive).
Realistically, people do die in houses all the time, and in many states you’re not required to tell buyers (a few do require this though). You’d be surprised how many people live happily in houses that had messy deaths, even violent ones. This happens a lot in apartments too. But some people are superstitious, you have to decide if it bothers you. Personally I think dying in your own house at old age is the best case scenario and it wouldn’t bother me one bit.
I’d be curious about the details of his medical condition. If it’s only old age that’s a lot different than being on hospice for pancreatic cancer.
Otherwise seems fine if it’s all legally reviewed.
The last owner died in my house, I bought it from the son. It didn’t bother me, in fact it was a bonus because the son left all the stuff. I got all of the husbands tools and a bunch of household items we like.
I think this was an episode of Ozark
My aunt did that, sold her home but they agreed to let her live there for the rest of her life. Live 13 more years, they were pissed off after 3 years.
Have you heard of the time they did this in nyc and the person lived to be like 110 and outlived the person who bought the home?
This sounds a bit like the French Viager system but on even more positive terms for you, the buyer.
So long as the condition of the father is one that is not subject to spontaneous, miraculous recoveries, this appears to be a very fair deal.
The discount accounts for the uncertainty of the timeline, and the rent-back has a definitive end based on the father’s passing. The escrow seems to be a fair percentage assuming the condition of the house is good.
Only concern is that during the rent-back period, they will be paying for two places – the rent on the sold home and rent/mortgage on the new place they are getting to be ready. Escrow helps protect you if they do have money issues for up to a year (using close to a 1% ratio between rent/purchase price), but only so much.
If they are in financially good shape and this deal is really them being proactive, you’ve lucked into a good situation if the timing uncertainty works for you.
As for it being creepy; that is really on you. I wouldn’t be concerned about that at all; it isn’t creepy to me.
People dying in homes is not so unusual. And I think it is much nicer that he can die in a place of familiarity with family than in a sterile hospital suite.
The Florida market seems to be declining for a couple years now. Do your due diligence and make sure the valuation works for you. Price in more price drops if that neighborhood warrants that. Speak with a realtor or hire an appraiser to know wha the long term outlook looks but as others have stated know when the lease period ends so you can make a more informed decision on the valuation for this home. Also keep an eye on the neighborhood, if you see lots of homes for sale no need to lock up this property when there’s others to be had for the same price or cheaper with zero baggage.
I dont know why, buts its shameful. I rarely see new builds that appeal to me.
FYI, Hugh Hefner did exactly the same thing when he sold the Playboy Mansion, a year before his death.
>This is on top of a nice discount.
How much is the discount, as a % of the value of the house? Not to be too morbid, but did you meet the dad, what are the chances that he might actually get better?
This sounds like a great deal for all involved as long as the uncertainty is priced in.
If you’re purchasing with an owner-occupied mortgage you run the risk of occupancy fraud if you do not occupy the property within 60 days and for 1 year. Discuss this with your lender.
Very normal thing imo. If have a problem with someone dying in the house you want to buy, I’d probably not buy it. I wouldn’t care about that at all. It’s part of life and the best place to go imo.