Good evening BP members! I have a fairly complex scenario and am seeking your help!
I am interested in purchasing a duplex in my area that was donated to the local university in June of 2017. The property was then placed on the market by said university in July of 2017. According to my agent, although the seller of the property is the university, the donor still technically has a say in how much the property sells for. This is because there were tax deductions that the donor benefited from that are based off of the appraisal that was required to be done at the time of donation. Therefore, if the property does not sell for the same amount that the donor valued the contributions to be for, then he/she must pay back any overpayment of deductions benefited.
The property was originally listed for $210,000. The University is listed as the current tax payer and is paying taxes on roughly that same amount. Which I can only assume, is what the appraisal came in at. The property has been on the market for over 200 days and although it was well maintained, it is in much need of updates relating to HVAC and electrical, both being big ticket items. With that being said, my offer came in much less than they were asking at $145,000 in hopes to negotiate to an equally fair price.
My question to those who have been in this scenario- If the donation has already taken place and the donor validated their tax deduction value with a professional appraisal shouldn't their part in the transaction be complete? Why should they have any tax implications from the amount the university decides to accept from the property? Is it because the donation only occurred last year rather than several years ago?
Help me understand if I am wasting my time trying to negotiate something that may not be negotiable. Thanks guys!!
You've already done the work to make the offer. The worst thing they can say is "no," which could easily be "not right now." They have the evidence that the property was over valued. I think more than the tax issue, it depends on how much the university wants the money. University financial years usually go July to June. If they aren't interested right now, they may become more so when it is time to set their budgets.
@Amanda G. thank you for your response. I appreciate the feedback and will hope for the best!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.