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Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 37380
Experience:  16 years real estate, Realtor. Landlord 26 years
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If we purchased a second home mother so that she could be closer to us, and it is i

Customer Question

If we purchased a second home for my mother so that she could be closer to us, and it is in her name, and her primary residence, can we sell her other real estate that she no longer lives in for less than market value just to get rid of it? It was ruined by my mother's hoarding, mice, and would require more money than we can afford to repair it to market value. Would she be penalized by Medicaid for selling investment property for less than what other homes are selling for? Homes in the neighborhood sell for anywhere from $90K-$150K, but in it's current state, it's worth closer to $50K.
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Barrister replied 2 years ago.
Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.
If you can document that it is not worth the going rate for similarly located properties by getting an appraisal, then yes, you could sell it for less than market value. It might raise eyebrows if the sale was to someone you know or were related to as that looks like self dealing. But if you get an appraisal that says it is worth $50-60K, then that is pretty conclusive proof of its value in its current condition.
I am sure that you are aware that the money would have to be spent on her care through the "spend down" process before Medicaid would kick in to pay for anything.
As an aside, I am going through an identical issue with a family member who has actually had their house condemned when houses next door are $180-200K. It is a difficult and stressful situation to deal with.