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.
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:
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.
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 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.