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Started By
Message
re: Legaility question regarding selling a house for more than its worth
Posted on 3/7/15 at 1:44 pm to I Love Bama
Posted on 3/7/15 at 1:44 pm to I Love Bama
quote:
Unfortunately, I KNOW what it is worth. The other party is uneducated and uninformed. Trust me, I want this to be legal but it seems very predatory. I've asked this question on other forums and it seems to be split 50/50.
A house you are owner financing needs to be sold at a higher price. You are doing them a huge favor.
If you are weak enough to feel guilty, throw in free carpet or appliances.
Posted on 3/7/15 at 2:10 pm to GeeOH
quote:
If you are weak enough to feel guilty
Fair enough.
Posted on 3/7/15 at 2:30 pm to GeeOH
quote:
A house you are owner financing needs to be sold at a higher price. You are doing them a huge favor.
People owner finance when they can't get traditional financing. As it is, they get charged a higher rate of interest. and, owners command a higher sales price.
This is why I truly don't understand why anyone does this as a borrower. Spend a couple of years getting your financing in order so you can get traditional financing. Getting owner financing at a higher rate and higher cost is simply going to cause more financial problems for the borrower in the long run.
Posted on 3/7/15 at 2:35 pm to I Love Bama
It's worth what the buyer thinks it's worth.
Posted on 3/7/15 at 3:52 pm to I Love Bama
quote:Have you disclosed any information you have that causes you to value the property for significantly less than you are being offered? As long as you do not withhold information, or lie about the condition of the property, then you should have defense against any claims of fraud.
Unfortunately, I KNOW what it is worth.
As for predatory lending, it is a matter of perspective. What is the difference in total price between a loan for $20,000 at 5% and a loan for $10,000 at 12.67% in total payments? They both have the same monthly payment.
Posted on 3/7/15 at 4:58 pm to Poodlebrain
What if a house is "worth" and by worth I assume you meant appraised for, 250k and you can sell it for 265k. Is it the same scenario ? Or in your case is the question just because it is double the value ?
Posted on 3/7/15 at 5:03 pm to I Love Bama
Are you saying their payment to you (principal+interest) will make it $30k? Or just the principal payments will make it that much? If the interest gets the total payment to 30k I wouldn't feel bad about it, banks do that shite all the time.
This post was edited on 3/7/15 at 5:05 pm
Posted on 3/7/15 at 5:11 pm to keeton350
quote:
Or in your case is the question just because it is double the value ?
More or less, yes.
Posted on 3/7/15 at 6:10 pm to Athanatos
I only know of lesion being invoked when the sale price is too small.
No idea about the other theories you listed, though.
No idea about the other theories you listed, though.
Posted on 3/7/15 at 8:12 pm to boosiebadazz
Also, lesion can only be claimed by the seller. (LA)
To the OP, I would be more concerned about breaking any usury laws (interest rate) than illegality stemming from your purchase price.
You should be fine if you have been straight with your buyer.
DISCLAIMER: You'd be silly to follow legal advice from an internet forum. NOT LEGAL ADVICE.
To the OP, I would be more concerned about breaking any usury laws (interest rate) than illegality stemming from your purchase price.
You should be fine if you have been straight with your buyer.
DISCLAIMER: You'd be silly to follow legal advice from an internet forum. NOT LEGAL ADVICE.
This post was edited on 3/7/15 at 8:23 pm
Posted on 3/7/15 at 10:47 pm to keeton350
My point is that if you figure out an acceptable payment, and number of payments, then you can state the purchase price and interest rate at specific values that avoid the appearance of usury. The only adverse consequences are the tax implications for the buyer and seller. The sales price may be higher than the seller would like, and result in capital gain from the sale. But that would also mean less interest income to recognize over the life of the loan. For the buyer, he would probably get more cost basis in the property and less deductible interest expense over the life of the loan.
Posted on 3/7/15 at 11:47 pm to iAmBatman
quote:
Capitalism is not illegal
Yet
Posted on 3/8/15 at 7:12 am to I Love Bama
It sounds like your conscience is trying to tell you something.
Just because something is "legal" does not mean it is right, just, moral or ethical.
Just because something is "legal" does not mean it is right, just, moral or ethical.
Posted on 3/8/15 at 10:35 am to makersmark1
quote:Wait just a minute. The seller doesn't need to know why a buyer places a higher value on an item than the seller does. Suppose the buyer wants the home because it contains a specific material he wants to remove and use for another project and the home is the only readily available source? Suppose the home sits on a piece of land adjacent to other property owned by the buyer, and the buyer is willing to pay a premium to obtain it? There is nothing wrong, unjust, immoral or unethical in accepting the best price offered if the seller is unaware of any defect in the property being sold that he has not disclosed to the buyer.
It sounds like your conscience is trying to tell you something. Just because something is "legal" does not mean it is right, just, moral or ethical.
Posted on 3/8/15 at 10:40 am to Poodlebrain
I'm glad you dropped in. I haven't spoken with my accountant yet, but how does the irs treat a sale like this?
Installment sale? Long term capital gains on monthly mortgage payments?
Installment sale? Long term capital gains on monthly mortgage payments?
Posted on 3/8/15 at 11:23 am to I Love Bama
You can elect to report it as an installment sale. That will allow you to defer the tax on the gain until you receive the cash. The risk is that Congress might raise the tax rates during the life of the installment contract. Form 6252 is pretty straight forward for determining the amount of gain you have to report based on the principle payments you receive.
Posted on 3/8/15 at 11:37 am to makersmark1
quote:
Just because something is "legal" does not mean it is right, just, moral or ethical.
bullshite. Nothing is stopping the uninformed consumer from becoming informed. Hell, I can research an entire town's worth of apartments and potential houses on my laptop without leaving my bed.
Ignorance is not an excuse.
Posted on 3/8/15 at 1:37 pm to Poodlebrain
You're not a real estate dealer are you?
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