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You Thought You Bought It And Now You Own It?

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Jon brings us a warning about something I sure never would have thought to consider. Sounds like the thing to do when buying this kind of property is get an appraisal even when paying cash - and take lots of pictures. Then keep documentation of all the repair costs. 

Original content by Jon Zolsky, Daytona Beach, FL

I was struggling with the Title and my other option was “The Most Important Question To Ask When Buying A Vacation Property”.

I do not expect you to figure it out, so here is this most important question to the Seller:

- How financially sound are you today and for the next 2 years?

You think this is a stupid question? When you buy a vacation property, why would you care about the financial strength of the Seller?

Well, if you want to keep what you are buying, then it is not stupid at all.

You think you bought your vacation property, and now you own it? May be not...

Life and laws have more in store for us than we can even imagine.

A local couple bought a vacation property in the Florida Keys, and after nearly two years found out that they may lose the property...

The couple did everything right. And yet…

What happened was that the Seller of this vacation property has filed Bankruptcy. The Buyers may not even know it, however,  depending on the circumstances, a bankruptcy trustee may be permitted to recover the transferred property as part of your bankruptcy estate”.  Of course, not every sale like this would end up with trustees taking the property, but they would look at when the transfer was made, whether the Seller received fair value, how s/he spent the money, etc.

In the case of a local couple, which bought a property in the Florida Keys, the problem seems to be with how much the Seller sold the property for. The trustees in Denver do not know the property, of course, but they see that it was sold for less than the assessed value. Well, there was a reason for that. The property was in terrible shape and the Buyers have spent $23K in repairs, but now it is up to their attorney to explain it to the judge.

If the Buyers lose, they will get what they paid for this property, but they will not get $23K they have spent on repairs and updates. Plus the court costs, which may be very substantial.

So is there something they should have done?

Probably ask the Seller whether s/he was financially sound.

Crazy, isn’t it?

P.S. I am sure you noticed that I say “vacation property”. Is there a difference whether the Seller had it as primary residence or a vacation home/condo? There is. Primary home is an exempt property, and thus would not trigger this action.

Vacation home/condo is nonexempt, and thus fall under this law.

Comments (4)

Broker Patty Da Silva Da Silva
Green Realty Properties® - 954-667-7253 - Cooper City, FL
Top Listing Broker

Thanks for sharing Marte. Hope you have a meaningful weekend!

Nov 23, 2013 12:42 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Thanks Patty, so far it's wonderful. I just spent all day shopping with my son. 

Nov 23, 2013 10:27 AM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

It just goes to show there is always more to learn in real estate every single day.

Nov 23, 2013 03:21 PM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Michelle - I guess that makes real estate just about like life! Always more to learn. 

Nov 23, 2013 05:24 PM