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Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 36343
Experience:  Texas Attorney for 30 years dealing in real estate
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My parents owned a home with a reverse HELOC mortage in New

Customer Question

My parents owned a home with a reverse HELOC mortage in New Jersey. My father died and my step-mother could no longer afford to pay her property taxes so she was given a notice of due and payable, and a short sale value of 400K. The house needs over 110K of work to fix, it is is a very run down shape and no other person would ever live in it in the condition its in. Two local realtors valued the property in written comparable market analyses at 275K, far below the bank's appraisal. The bank said it WILL approve having a relative purchase the property and I would like to do so. I contacted a real estate attorney who told me I have to offer what the market value is (275K) and not anything lower. Because the house requires so much repair, I don't understand why I can't offer less than the market value. No one pays market value for a property that needs extensive repair. Can you explain why this lawyer told me that? Is he correct ?
Submitted: 7 months ago.
Category: Real Estate Law
Customer: replied 7 months ago.
BTW my step mother will require assisted living and she will eventually be on medicaid in the future when her funds are spent down.
Expert:  Ray replied 7 months ago.

Hi and welcome to JA. Ray here to help you today.

Lawyer is telling you this is what the bank would try to recover here in a sale.They would not necessarily get this, but would start there and see what offers they get closest to this figure.I suggest you offer them what you feel it is currently worth in current condition and see what counter or response you get.I wouldn't offer more than you feel it is worth.It appears you have done your home work.

Realistically this is troubled property, anyone buying that may offer less than the $275 figure.Often the bank starts here and sees what the market will bear.I think the lawyer here was telling you bank likely will start here--if you want it this is the amount they will try to get.Again you can offer less, you might get outbid but then again they might accept.Offer what you feel it is worth and go from there.

I live in such a foreclosed home that the realtor ran in the newspaper after I bid because he thought there was no way HUD would accept my bid.He was wrong.See how it goes here at the figure you are comfortable with.You never know.

I appreciate the chance to help and offer a different perspective.Thanks again and Happy Easter.

Customer: replied 7 months ago.
Several people I've spoken to seem to think because I am a family member, the reason this lawyer told me that I have to offer market value is it may look like the family is trying to take advantage, or it may trigger a medicaid penalty for my mother. But the house really needs that much work. It does not sound from your answer that these are issues, but I need to ask. Are these things that I need to worry about?
Expert:  Ray replied 7 months ago.

Well that's a different issue.Medicaid likely woul,d not have a problem with it since the lender has to approve the short sale.I sure wouldn't offer more than you think it is worth here.See what they say about your offer.Honestly you might decide it isn't worth the hassle here since she has to spend down any surplus funds anyway.

Thanks for your patience.

Expert:  Ray replied 7 months ago.

If you can positive rate it is always much appreciated.

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