70 year old lady- free & clear

[Sarah Jones]

I'm trying to buy a house from a 70 year old lady. The house is free and clear. She will be selling it to me and I will just make her payments. She will hold a mortgage on the place.

1. I can ask for 2% rate or even 0% and just make payments for what is owed on the house becuase the house needs a lot of work... should I just make payments directly to her and convince her to do 0% for me.. because the house needs a lot of work or shoudl i just stick with the 2%.. is the 2% to little also?

2. some people told me that if i do it incorrectly it may look like i am taking advantage of her and even though the deal is closed they could come back 10 years later and cancel the deal... is this possible and what exactly is the law for that? (im in california) i'm kind of afraid to do a deal with a lady this old becuase i dont want them to cancel the deal because they think i am taking advantage of her.. i'm not.. just want to do it correctly..

3. also the tax. i'm buying her house so i'm not responsible for her tax.. but she doesnt have money to pay for it.. so some of the money pay has to go to her tax... on her tax return does she have to report how much money I paid for the house? where does she have to report how much she paid for the house? Is there any incentive or senior citizen tax rules (discounts) or anything for senior citizen when they sell their home?

[Steven Hamilton II]

Sarah Jones,

I have all the answers to your questions; however, after reading all of your recent posts I do not feel comfortable encouraging you in your endeavors with this property.

I would just like to state that you have been giving conflicting information "For what is owed" & "free and clear" those mean two opposite things. Next, I would like to state that your lack of paying interest.

The capital gains will depend upon if it was her primary residence 2 of the last 5 years or not.