Creative Technique to Sell a House — Guaranty the Buyer a Repayment Legacy

A new technique is developing to help people sell homes in the current housing market downturn.

Here is how it works:  The seller enters into a contract to include a cash legacy in the seller’s will to repay the buyer for the sale’s price.  Some sellers may add additional incentives.  For example, if the buyer helps care for the seller when the seller gets older, additional funds or property will be added to the buyer’s testamentary gift.

See Amy McConnell Schaarsmith, A house deal to die for?, Post-Gazette (Pittsburgh), Oct. 29, 2007.  The article also explains:

The Husicks’ offer is certainly unusual, said attorney John Cook, who specializes in estates and trusts for the North Hills law firm Cook & Tate.

“Holy mackerel! This is unbelievable,” Mr. Cook said when told of the Husicks’ proposal. “You can make a contract to will the assets, so it would be a binding contract, but of course there’s no guarantee that there will be anything of value left in his estate at the time of his death.”

To protect themselves, Mr. Cook said, would-be buyers would have to write stipulations into the will that the Husicks not give away large portions of their estate, and not place the estate into joint ownership with anyone other than the buyer.

Special thanks to Deborah Letz (attorney, San Antonio, Texas) and Mark Killingsworth (J.D. Candidate, Texas Tech University School of Law) for bringing this situation to my attention.