Selling home to family friend.

Question

My grandpa is ill and we do not think he will be able to live in his home much longer. The house is worth $117K, my father (and grandfather) would like to sell the house to someone we know who is not related to us. They want to sell it for about $30K-$50K as the person does not have much money. Can they legally do this. We would use the money for a home aid (my grandpa has to move in with my dad because he can not be alone at all) to keep grandpa out of the nursing home for as long as possible. We know he will have to go to the nursing home before the 5 year limit so he can not give the home to one of us with the state taking it for the nursing home bills. We live in NY is it legal to give the home away for alot less than it is worth knowing my grandpa will have to go to a nursing home soon (he is on Medicaid--not the one for poor people, the one for old people), how do you go about doing it? Any help or anyone who know NY law would be great.

Answer 1

forget about laws about discounting the home.  DO NOT do it!

Get a reverse mortgage!  They were made for this situation!  This way,

you or the estate will get payments for x years and then, the

house will be re-financed to pay off the mortgage.

In this day when values are dropping, it is actually harmful to

sell a house for less than its value--it harms the

values of all homes in the area.

I am available to guide you for free.

Answer 2

Talk to a lawyer (or ask in the legal section but be weary of those answers).  There ARE rules as to what you can and can not do.  If the friend is not a relative then you should be okay and able to do what ever you want but the state can seize bank accounts also so the 50k would be theres.  And it is not exactly seizing it, they will use the money to pay for his medical care.

Answer 3

You can sell a home for as little as you choose. There aren't any laws about how much you have to charge.

Answer 4

yeah it is but I sure would NOT recommend it AT ALL..

Seriously, how will you feel when the money runs out? or the people get this house for 30-50k and turn it around and sell it for 120k?

If you have to sell it, I would seriously suggest not involving friends and finances. Especially if you are practically giving away the home.

Answer 5

What you are suggesting could be construed as fraud.  Medicaid is going to look back.  The fact that the house was sold for significantly less than it's worth will stick out like a sore thumb and Medicaid  will act to retrieve that money.  Another thing, selling the house for so much less than its worth may very well trigger gift tax liability.

Your father and grandfather need to consult with an attorney who specializes in elder care issues to avoid making a serious mistake.