This is a first

I got a phone call yesterday from a 20 year old kid. His parents and sister died in a car crash about six months ago, and he’s now the owner of a 5bd 3ba home worth 350K +/- 5

He said there are no PITI, (his father built the place with his own money), and no liens, but he can’t afford the place because it’s too big. Utility bills, property taxes etc killing him.

I asked if he’d tried to sell, he has and no takers at 275K.

He’ll sell to me for 100K.

When I got back on my chair I asked why, he said he just wnted out because it reminded him too much of what he lost.

I went to see him today and tied him into a contract that doesn’t expire till 2-28-2008.

Question is, should I take the deal and wit for the lawsuit, or should I wait till he comes to his senses and give him the 275K

I wish they were all like this

If he’s tried very hard and can’t sell it at $275K, then it’s probably not worth $350K in the current market. Is the house his to sell? Is the deed in his name? I agree with you that taking it for $100K is just begging for a lawsuit that you will probably lose. I would definitely be sure to get VERY GOOD disclosures filled out if you are going to take it for $100K and do a formal closing with a lawyer. On the other hand, I certainly would not pay $275K for it if he’s tried to sell it at that price and hasn’t been able to sell it.

Good Luck,


I didn’t do due diligence yet.

I’ll get the title report and comps in the morning.

What worries me is the definite possibilty of a lawsuit even if it all pans out and I buy then 12 months down the road he comes to his senses.

That’s why I got the contract that doesn’t expire till next year. He didn’t check, he just signed it.

I agree that $275K is too much, but I also agree that, based on what you’ve said, $100K is not enough.

Assuming that he’s out of high school, he’s reached the age of majority in Pennsylvania (which is where I think you are), so he can enter into a contract.

I think no matter what deal you strike with him, you should do a couple of things, especially if you really think you’re getting a ridiculously low price that will come back to haunt you:

  1. Require that he be represented by an attorney. Put it in the contract, and make sure that it happens. Don’t make it one of those weasel clauses that you don’t expect him to follow through on. Ensure that he’s represented by a lawyer at the closing.

  2. Get a side letter from the seller stating that (a) he approached you, not the other way around; (b) he is of legal age to enter into this contract; and (c) he set the price and understands that it is significantly below market value.

If this deal has that much margin in it, you may want to get your own attorney to craft the paperwork that should help insulate you.

If you do end up really getting a bargain here, you could always offer to split the profit 50-50 with the seller, assuming that you’re going to flip it. Then you could feel good about getting it for a low price and know that you’re pretty well insulated from any claims that you ripped someone off.


IRS lien

$238,000 and change

His father was practically bankrupt when he died

If it sounds too good to be true… it probably is

But hey, we got 14" of snow so far today, there’s a state of emergency, and all the roads are closed.

Didn’t stop me working

I have shovelling to do now

Can’t the IRS lean be removed off the property? it is not a property tax lean.

IRS lien is the big daddy of all liens depending on where they are in line. According to my sources, if it’s more than 10 years old, it may be able to be thrown out because they’re supposed to refile. IRS liens apply to property if they filed against it, but a lawyer can say for sure.

That is correct, but I thought if you show the IRS that you currently hold the deed for the property, they would release the lien off the property within or after 120 days. I could be wrong about this too, just something I heard.