Fri Feb 22, 2013, 02:50 PM
Duer 157099 (17,742 posts)
$100 million Bay Area mansion has unusual sale requirement
Hmmm. Why doesn't he just take out a mortgage on the place? Why might he be doing this? Maybe he wants to know who the next ower will be?
HILLSBOROUGH — As if the $100 million asking price wasn't deterrent enough, the owner of a mansion for sale in a ritzy San Francisco suburb says the buyer can move in only after his death.
The unusual arrangement is for a 16,000-square-foot Mediterranean-style home on more than 45 acres in Hillsborough.
The San Mateo County Times reports (http://bit.ly/VyKCcz ) the owner, 76-year-old Christian de Guigne IV, was born and raised in the home and doesn't plan to turn it over to the new owner until he dies.
Sotheby's International Realty agent Gregg Lynn says the arrangement was common for property traded up until the 20th century. He called the estate a once-in-a-lifetime opportunity.
Another home nearby recently sold for $117.5 million.
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$100 million Bay Area mansion has unusual sale requirement (Original post)
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Response to Duer 157099 (Original post)
Fri Feb 22, 2013, 04:46 PM
DeschutesRiver (2,344 posts)
8. It is called a life estate and it isn't reserved just for the richy rich peeps.
It can be useful in quite a few situations for ordinary peeps. I'm imagining it might become a bit more frequent as our population ages, like it used to be way way way back when.
An example would be where an elderly Mom transfers ownership of her home to her kids, but retains a life estate to continue to live there for the duration of her life. It can help avoid probate, while letting mom still be able to live where she always has lived. Or an elderly person who has no kids, needs to sell their home but still wants to live there could sell it with a life estate to achieve that goal. There are ways you can set any duration you wish on how long you stay post sale. Yeah, you have to find someone who would agree to it, yeah, it can get complicated and be a mess as you can imagine, but it is a very old legal concept because people do choose to do this in certain circumstances.
For unique properties (not just those of the richy rich, but any property that anyone has admired or where they want to live), the seller can ask to retain a life estate on all or a portion. They'd get the $$$ from the sale of the property which is now encumbered by the life estate and get to live the rest of their life there. The buyer gets a property that may not come on the market frequently (it can be a palace on acreage like this one, it can be in his/her own neighborhood where homes don't turn over very frequently, or it could be a childhood home/property where someone grew up, that they now buy back as an adult, etc). A buyer could ask for a reduction due to the life estate, because obviously the buyer will be giving up the right to immediately occupy the property.
This is probably more commonly done within families for probate reasons, and way less commonly between strangers. But it certainly isn't rare. Probably just not as common in our new society where people move/refinance a home every 7 years or so.
What would be unusual or rare is for the sale and retention of a life estate for a person who isn't old. I don't even know if that has ever happened, because obviously there aren't all that many properties or locations that are so desirable that someone would wait until a 20 year old dropped dead in order to extinguish the life estate.