Many people do not realize that they have an option besides having their house repossessed, or selling it and finding a new place to live. There is a third option. If you are having a hard time repaying your mortgage but you want to remain in your current house, you might want to consider consulting a sell and rent back company. Selling to rent back is definitely an option to seriously consider. It alleviates the need to sell your house and deal with the upheaval and stress and that relocating brings.



The sell and rent back option provides a way to make a quick and easy sale. There are a variety of companies that exist just for the reason of purchasing homes while allowing the current owner to stay in place. In addition, these companies allow you to buy back your home at a later date if your financial situation improves. If you are interested in taking advantage of this option, simply go online and search for a sell and rent back company. After contacting them, they will get back to you, typically within a few days, to give you an approximate amount that they would be willing to pay you.



If you decide that you would like to go forward with this process, a representative of the company will phone or visit you. You will have the opportunity to get answers to any questions that you may have. The representative will then make you a formal offer, which will detail both the monthly rental cost and the amount you will need to come up with to buy your house back in the future (if you want to).



There is a big difference between selling your house through a real estate broker and selling to rent back. There are pros and cons to both options but, ultimately, you may not really have a choice. If you need a quick sale and do not want to move house then using a sell and rent back company is literally your only option. If you can afford to wait months to find a buyer on the general market then you would likely be able to sell your home for a higher price though.



If your decide to sell your home to a sell and rent back company, the whole process can be completed in just a few weeks. It is possible for you to still be able to stay in your house even if you have already received notice of eviction or court proceedings. So, do not think that it is too late to act.

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In 1995 the Arizona legislature authorized a husband and wife to hold title to their home (and other real property and even personal property such as stocks and bonds) as community property with right of survivorship (“CPWROS”).



Prior to this1995 Arizona real estate law a husband and wife either held title to their home as community property (“husband and wife”) or, most commonly, as joint tenants with right of survivorship (“JTWROS”). Community property had the tax advantage of a step-up in basis of both halves of the home when the surviving spouse sold the home, but had the disadvantage of requiring probate. JTWROS had the tax disadvantage of a step-up in basis of only the deceased spouse’s one-half interest in the home, but had the major advantage of transferring title to the home to the surviving spouse without any requirement of probate. The purpose of the 1995 legislation authorizing CPWROS was to have the “best of both worlds,” namely, after the death of the first spouse a step-up in basis of both halves of the home, but without probate.



The following simplified example will illustrate the importance of a step-up in basis of both halves of the home. A husband and wife buy a home for $40,000 (each has a basis of $20,000). Ten years later the husband dies and the home is now worth $100,000. The wife then sells the home for $100,000.



If the home is JTWROS property, only the deceased husband’s one-half interest will be deemed by the IRS to have a step-up in basis, and the wife will have a taxable gain of $30,000 ($100,000 sale price less deceased husband’s 100% step-up in basis to $50,000 less wife’s original basis of $20,000).



If the home is CPWROS property, both halves will be deemed by the IRS to have a step-up in basis, and the wife will have no taxable gain ($100,000 sale price less deceased husband’s 100% step-up in basis to $50,000 less wife’s 100% step-up in basis to $50,000).



In addition to the tax advantage of owning real property as CPWROS, as opposed to JTWROS, CPWROS real property can only be sold or mortgaged with the consent of both the husband and the wife. JTWROS real property can be sold or mortgaged by either spouse without the consent or even the knowledge of the other spouse.



If a husband and wife want to transfer the title to a home or other real property from JTWROS to CPWROS, they should contact the title insurance company that insured the title at the time of closing. The title insurance company will normally prepare the necessary transfer documentation for a minimal fee, generally less than $250.



Note: Since 1997 a husband and a wife have the $500,000 capital gain exemption on the sale of a principal residence. This $500,000 capital gain exemption is generally available after the death of one of the spouses if a joint tax return is filed and the principal residence is sold in the year of death. Otherwise, the $250,000 capital gain exemption is only available. Therefore, a husband and wife holding title to their home as CPWROS is not as important as with other types of real property, unless there has been significant appreciation of at least $250,000 in the value of the home.



Article Source: Combs Law Group Blog