Buy House, Get Your Money Back (Plus a Free Set of Parents to Care For)

Well, house sellers are getting more and more creative as the real estate market shows no signs of turning around soon. I expect to see some really outlandish stuff/incentives before the tide starts to turn, but for now, this one's pretty good. Basically, these people are offering the buyer their money back when the sellers die. In addition, there's a "kicker" if someone wants to go the extra mile. The details:

Bob and Ricki Husick came up with a more creative twist: Whoever buys their four-bedroom, 31/2-bath home on Fountain Hills Drive in Pine would get their money back after the Husicks die.

Not only that, but if the buyers are willing to care for the Husicks in their old age, they could also inherit the Husicks' retirement home in Arizona for a total estate now worth about $500,000. The couple has no heirs.

Now while it's not clear to me, the article implies that this is not all that the buyers are offered. Consider this:

"Why not go for the works? So if we're worth $2.5 million, you get it all," said Mr. Husick, 55, a former Wachovia mortgage broker who would like to continue working after he and his wife move to Arizona.

"That's one way you get a built-in child or a built-in someone to care."

Of course, the value of the estate could erode, too, depending on the Husicks' fortunes and the cost of their long-term care. But Mr. Husick points out that he began saving for retirement at age 21, and he's willing to let the buyers write the will to ensure they inherit the Husicks' assets.

"We don't want you to think we're trying to trick you," he said. "You draw it up and we'll sign it."

So I think this is the deal:

1. The buyer buys the house.
2. The buyer takes care of the Husicks until they die (which is probably 30 years or so down the road.)
3. The buyer gets the entire estate when they die.

A few questions here:

1. Do the Husicks think this deal will really provide someone who wants to care for them? Or will it provide someone who wants to speed up their demise? (Or maybe just put them in the cheapest retirement home they can find.)

2. What's to stop the Husicks from changing the will?

3. How do the buyers know the Husicks won't spend all the money before they die?

4. Does anyone else think this whole arrangement is strange?

I've got to give them kudos for the PR angle here. They got a big feature in their local paper -- that should make their house stand out from the crowd. The article notes the same:

"Gimmicks create attention, which means more viewers and more activity. Then again, the buyer may say 'Take the price of the car out of the sales price,'" Mr. Hanna said.

That's what I would do. If someone had a "buy a house and get a car" deal, I'd take the price of the car out of the house's offer price and start negotiating as if that was their starting offer.

So why are they doing this? They're starting to get desperate:

If buyers prefer a more conventional arrangement, the Husicks are willing to sell their home, without any strings, for $399,900. The house, which the couple is selling themselves, has been on the market for 11 months.

Yep, almost a year on the market and no signs of a sale. I think it's going to get brutal before it gets any better.

I'm still looking for exactly the right home in the right location at the right price. To some degree, sellers in our area simply haven't gotten the message yet that they need to drop prices DRAMATICALLY. When they are setting the prices on their homes, they are looking at comparable sales for homes that sold a year ago -- before the market when down 10% or so. They need to start at 10% down, and then be more aggressive if they want to sell now. Once a large number of sellers realize this, prices should drop like a rock, and I'll be waiting. ;-)

Comments

[beastlike]

I would never go for that deal because of all the things you listed above! I think some people are just getting a tad silly...

Like you said, if you want to sell your home, price it right.

[BeyondtheConsumer]

For Sale: 4 bedroom house, recently remodeled kitchen, nice views, previous owners not leaving, minor sponge bath duty required.

It sells itself!

[internet_junk]

Why don't they just lower the price of the house if they want it to sell? I'm lost.

[Dan]

This reminds me of an NPR story I heard on September 28th on This American Life. A woman bought a house at a $110k discount with the condition that she would live only in the upstairs apartment until the current aging/ill owner living in the rest of the house dies. It is both a fascinating and horrible story of why I would never go for an arrangement like this. Money is important, but not at the sacrifice of living one's life.

If interested, you can check out the podcast (Act 3- Deal of a Lifetime, about 30 minutes into the podcast) at http://www.thislife.org/Radio_Episode.aspx?sched=1208