12-06-2012 10:48 AM
I notice under the sales history that many homes were sold at one time for only $1. I'm assuming this is a relative or parent selling their home to a family member. But did the owner die or are they just moving to a nursing home? What are the benefits of transferring ownership before you die. Why not wait until you inherit the house after the owner dies.
12-06-2012 12:40 PM
You are correct that in most of these cases this represents a sale between two family members or something outside of the realm of normal buyer and seller transactions. In order for a transaction in real estate (and many other things) to be valid and legal there must be some exchange of “good consideration” and often this is represented by a single dollar. This is not to say however that there are not tax implications for this type of transfer as obviously the amount of the sale does not represent the true value of the property. Often this can be done before a person passes on to avoid inheritance taxes but I am not versed in the benefits or process of how that works. Perhaps there is a tax attorney out there who can tell us more about the details of this and here is a post from smartmoney.com about the subject.
Either way when you see a sale amount listed as $1 you can assume it was a property transfer between parties without sale for market dollar value and that it is not a good comparison for any real valuation.
12-06-2012 01:03 PM
A nominal consideration is required to record the transfer of ownership. It is also common to see $1 used in situations such as when transferring to an entity like a trust or an LLC.
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12-21-2012 08:05 AM
Interesting artile on smartmoney. Best thing to do is just inherit the house after the family member dies it looks like but alot of people seem to buy it for $1 and pay the estate tax.