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Home Sale - Can I carry the loan to sell my house to my son for $100 a month and no interest for what I paid for it?

Palmdale, CA |

I bought my house in 2010 for 55K outright, similar houses in the area are now listed around 65-70K. I have to move closer to my Drs, but my 16 year old son wants to keep this house. He doesn't want it as a gift, says he wants to "do the right thing" and buy it from me, but I know he wont be able to get a loan at 18 and I cant co-sign for one. Can I carry the loan and charge him a minimum payment of something minimum like $100 a month for 55-60 months with zero interest?
Do I have to charge him more than what I paid, or can I charge him the same as I was charged?
I'm on SSDI, will there be any tax penalty on my side?
Thank you.

Attorney Answers 3


  1. Be very careful here. Do not act with attorney advise. You are a benefit recipient from government and any change in your assets in this case your primary residence or gifting of your asset or sale of your asset could adversely affect your benefits.

    Also your son is a minor and in California he can not enter into a contract.

    You should seek advise of attorney in social benefits or a estate planning attorney and make sure any proposed transfer or sale first can be done and second does not affect your government benefits.

    Good luck.

    In addition to AVVO's disclaimer, please note that by this answer no attorney client relationship is intended and unless there is a signed retainer agreement in place, neither me nor anyone in our office has intended to solicit clients. The answers are general in nature and without weighing specifics of particular query. No answer should be relied on in whole or in part, directly or otherwise to act or not to act in pursue of any of your potential claims in law or equity. You should consult with and obtain advise or representation of an attorney to protect your rights.


  2. There are not enough facts for a solution, but there are solutions. Any large change in your financial situation is going to skew your Social Security. SSDI is not quite as unforgiving, but you want to give all your facts to an Attorney before you commit to anything. It might be possible to place the house into a Living Trust and just charge him rent. You can always work out some details down the road when he is 18, but inheriting a house means that his tax rate is the same as yours and his basis is calculated upon your date of death. Morbid thoughts while you are still breathing, but the savings to your son could be substantial if values rise significantly in future.

    I represent Employers, but I can recommend Worker Attorneys in So Cal if you ask.


  3. Because your son is not 18, you may want to look into setting up a trust for your son's benefit until he turns 18; at which time he can be held responsible for his obligations. By making yourself the trustee you will have control over the property of the trust. One of the provisions of the trust can be that he is obligated to pay $100 a month. If he pays, then he stays. If he defaults, you can then figure out how to teach him the lessons of keeping his promises.

    You do not have to charge more than what you paid for the premises.
    Please call our offices if you desire the assistance of an attorney in setting up a trust or have any further questions. (818) 480-3885.

    Unfortunately, I cannot give you any advice regarding SSDI, as this is not my practice area.

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