• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

LIFE ESTATE

Status
Not open for further replies.

George W Dodd

Thread Starter
Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Lender's wants appraisal done on a property that has a life estate of a woman in her mid sixties. The "borrowers" have the remainder interest.

Questions:

1. What sort of discount would the market expect if purchasing this type of property? (actuary tables aside)

2. I also wonder, without the premission of the owner of the life estate, how the property could be foreclosed on? Cause I'm not sure that the owner (life estate) knows that her kids are mortgaging the house.

Has anyone else run into a similar situation?

Thanks in advance
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I had an order similar to that a couple years ago. I never did do it though. What I learned:

The LO probably doesn't realize that practically NO lender will do a loan on this property.

IRS has information for life expectancies and the percentages used according to age.

I doubt you will end up doing this type of appraisal for lending purposes. It's usually completed for an estate, financial planning, etc.

Sounds like the kids want the money now and I hope they are trustworthy. It's bad when her death will hand them the money they want now. I'm still working on setting up a deal where a family that wants to purchase some of my parents 80 acres would be able to build an assisted living house on the part they want with a nice small apartment for my parents. The deal would include some very nice incentives to take very good care of my parents because they will have to pay off their property when my parents die. This turns the situation around and makes it well worth it for them to make sure my parents are kept as healthy and happy as possible.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado

I'm still working on setting up a deal where a family that wants to purchase some of my parents 80 acres would be able to build an assisted living house on the part they want with a nice small apartment for my parents. The deal would include some very nice incentives to take very good care of my parents because they will have to pay off their property when my parents die. This turns the situation around and makes it well worth it for them to make sure my parents are kept as healthy and happy as possible.

Girl, you are good! :lol:
 
A

Anonymous

Guest
If the life estate is properly recorded the property can not be financed without the mother's consent and signature. Most lenders will not consider a loan on a property with a life estate.
 

Nancy in Friday Harbor

Junior Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Washington
Hmmmm.....

Brings to mind a mental picture of the "box checkers" in underwriting seeing "Remainder" in the Interest Appraised box instead of "Fee Simple"!!! :eek:nfire:

I wonder how long it would take to sink in once they'd seen it?! :bad-words: And what kind of response or additional data request they'd have for the appraiser? :changes: Do you think they'd ask for more comps? :lol:

Twisted in Friday Harbor..
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Appraising a property with a life estate is second in difficulty only to catching salmon in the San Juans!
 

Nancy in Friday Harbor

Junior Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Washington
Mike,
I can't even catch fish in Alaska!!! Fishing is one of those talents I've decided I don't have!! 8O :lol:
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks