Real Estate Investor · Cleveland, OH · Member since 2010 · 2 posts · 0 votes
Hello, I have been reading and learning here on Bigger Pockets for some time but this is my first time posting.
I have been told by a real estate attorney that if I have a seller who is on Medicaid, that Medicaid has to approve the sale of the property. So, although, I might have an executed contract with the seller, that it cannot close until I find the Medicaid case worker assigned to the seller and get the deal approved by Medicaid.
Has anyone run into this? If so, where's the best place to start, particularly if the seller lives out of state?
Yes, the seller (or spouse) is receiving benefits or is deceased and paymenst were paid. The price of the home may exceed the amount exempted.
It's not big deal, they file a lien and will collect amounts due at settlement. You didn't say it was a cash sale, but I'll assume that.
There should be a Division of Family (or Social) Services. Thye will not discuss the issue with you but you'll need at least the name of the seller (SSN would be nice) and tell them you are purchasing the property.
Take the copy of the contract, a full legal description and an appraisal if you have one or a copy of the listing might be accepted, maybe a letter from the lsiting agent....something that will show that the value of the property in relation to the contract price. Ifit's reasonable, they will not hold it up, more like what do have, please send it to us. Good luck
Thanks for your response. The seller lives out of state. They moved there several years ago. So approach the Division of Family Services there or locally where the property is located?
You're right, it is a cash transaction. There is no listing agent though because the house was not listed. I found the seller through direct mail. I'll work on gettting something that shows the value of the home.
It could be either state, ask the attorney whcih state was involved or find the lien. The agency that is currently working with the "client" will probably be where they live and should be able to assist you. Good luck
I'm familiar how the Medicaid lien would work on a cash sale, but I'm not exactly sure of how it might work on a tax sale. More specifically, I wonder if a tax sale would wipe out a Medicaid lien.
@Bill Gulley Hello Bill. I have a question. I am working on a short sale where the seller owes 400K and property is appraised at 135K which the bank is accepting.
We found out there is a social services lean on the property from when the seller was in a VA home suffering from PTSD. Is it true that, if we show DSS (since it's a government agency) that there is no equity in the property and that the seller is getting no proceeds, that they will possibly remove the lien from the property itself since they will get nothing if it forecloses anyway?