Legal Question in Real Estate Law in North Carolina

Due to mismanagement of my father's finances, his home was allowed to slip into forclosure in 2008. After paying the balance of the past due mortgage payments and legal fees, I have had the home saved from forclosure. Also power of attorney to handle business and financial matter was granted to me, due to this matter and several others.

After saving the home from forclosure I was informed by his mortgage company that because of the mortgage agreement and the fact that the house fell into forclosure, them mortgage would now be increased from a little more than $500 a month to $971 per month. Needless to say this is an large increase and it has become a burden to keep up the mortgage. I have considered selling the home to a family member for $20k more than the current balance on the mortgage just to get from under the debt.

The home has been appraised by the county at $165k, the balance on the loan is around $55k. This leaves a gap of about $100k. I have a buyer willing to give $75k for the property so the home is actually being sold for less that half of it's worth and I will have the option to purchase the home back upon my father's passing. My concern is twofold:

First, is this type of sale legal and feasable? And second, what are the IRS implications concerning the $100k "gift"?


Asked on 9/14/10, 11:08 am

1 Answer from Attorneys
Bob Bollinger Bollinger Law Firm PC

You should be more concerned about breaching your fiduciary duty to the person who gave you the power of attorney. If you sell it for half what it is worth, you may have to pony up the rest of the value out of your own pocket for abusing your power of attorney. You need to get some specific legal advice from a lawyer that you hire. Choose someone who does a lot of real estate transactions or handles wills and estates. Good luck.

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Answered on 9/20/10, 10:48 am


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