Gift of equity...?

[JenniG]

After looking at my situation some more (trustee wants to declare homestead non-exempt because of about 4K in debt that existed prior to purchase of home), I am wondering if there might be a different angle to approach this from. Because the home was appraised at $51,000 and my parents sold the home to us for $23,000 which gave us instant equity of about $29,000... do we have a leg to stand on because the equity was a gift from my parents? Does that change anything? I am sure it won't matter to the trustee, but this is the home I was raised in and my mom passed away earlier this year. Plus, it is the home I have raised all of my children in. I have so many emotional ties to this place.

Jennifer

[ValleYum]

Oh Jennifer. My heart hurts for you. I don't have an answer but I wanted you to know I am thinking of you. And, hopefully one of our wizards can help you. The gift of equity is an interesting approach though, so I will cross my fingers for you.

I saw in another post your husband works as a conductor. My hubby is an engineer. Crazy railroad life, huh?

[JenniG]

Oh Jennifer. My heart hurts for you. I don't have an answer but I wanted you to know I am thinking of you. And, hopefully one of our wizards can help you. The gift of equity is an interesting approach though, so I will cross my fingers for you.

I saw in another post your husband works as a conductor. My hubby is an engineer. Crazy railroad life, huh?

Hello ValleYum!

Thank you for your post. I have seen an abundance of helpful information on this site, so I am truly hopeful that someone will be able to help with my issue.

The railroad life can be quite crazy, can't it? Recently, my husband has worked in the local yard, so he is home every night... but I know that won't last. (Actually, he has been off work for over a month following surgery... with no pay... but is now back to work in the yard.) Us railroad wives just have to go with the flow, I guess.

Have a great day!
Jennifer

[SunshineGal]

Hi Jennifer,

I really don't think it will make a difference that the equity was a gift. What MAY make a difference is the current value of the home, have you had a certified appraisal done? They run about $350, so ask your attorney if it will help first. I would think at worst, you would have to buy the equity back from the trustee.

Good luck and keep us posted.
SG

[JenniG]

Hi Jennifer,

I really don't think it will make a difference that the equity was a gift. What MAY make a difference is the current value of the home, have you had a certified appraisal done? They run about $350, so ask your attorney if it will help first. I would think at worst, you would have to buy the equity back from the trustee.

Good luck and keep us posted.
SG

Good morning SG,

We had an appraisal done when we purchased the home in Nov 2007. We have made some repairs to the home, so if we have it re-appraised, I imagine the value may be slightly higher now. If we did have to buy the equity back from the trustee, would it only be the $4,500 for the pre 2007 debt that he is concerned about? We wouldn't have to buy back our entire $30,000 in equity would we?

Thank you!
Jennifer

[SunshineGal]

I don't know Jennifer, it seems like IA has some crazy homestead laws! I really wish I had some better advice for you. If the trustee is going after the $4000, that's a no brainer, agree to pay them and be done with it. If it's the entire 30K, than you need to know what your actual equity is. Did you file Pro-Se, or do you have an attorney?

What I can tell you is that a certified appraisal will take the value of the property based off comperable sales in the area. So, if you have a 3 bed/2 bath home that is 1500 square feet, they will compare it to 3 recently sold (3-6 months) 3 bed/2 bath 1500 square feet homes within one mile. There is some room for adjustments, but that is the basic rule. As for new carpet, tile, paint, kitchens, etc., they actually effect the value by moving that house into the higher range. In other words, say similar homes are selling for $50-$60 per square foot, the recent improvements will bump you up to the $60 range.

On your 2007 appraisal, pages 1 and 2 will list all of the information, including any value reductions for the condition of the property. There should also be a "cost to cure" towards the bottom of page 1 if there were any major repairs, such as a new roof.

Check your value on zillow...you are not looking for Zillow's zestimate, what you want to see is the recent sales for comps, it will give you a good idea of what similar properties are selling for. Also, check www.cyberhomes.com.

SG