Money Back Guarantee? On a House?

I was perusing the news online this morning and came across an interesting real estate related story. There is a couple in Pennsylvania who are selling their home and offering to refund the money to the buyers upon their (the sellers') death. This is a new twist on buyer incentives certainly, but I have been wondering if it would be a workable deal and how much it would benefit the buyers. The article is Couple Dead Serious about Selling House.

Can you force a Will?

Right now the husband of the couple selling this house is only 55 years old. The wife's age was undisclosed. So whomever buys this home is looking at quite a wait for the "money back" at the end. So that leaves me wondering whether or not you can force this couple to pay up once they are dead. What if there was a falling out and the new buyers were written out of the will? Or, worse yet, what if the couple lost their fortune? We're looking at a possible wait of 40-45 years here (longer if the wife is substantially younger and outlives her husband) and there is no guarantee that the couple will have the $400K they are selling their house for when they die. Would it make more sense to require some sort of life insurance policy that would pay to the buyers $400,000 upon expiration of this couple? If that were the case, then the sellers should take into account the cost of that insurance over the term of their lives and determine if that is more cost effective than just waiting for a sale or lowering their asking price.

Warranties that Survive Closing

Since the sellers are warranting that they will be financially solvent 40 years from now and will keep the buyers in their will, there is certainly a warranty that survives the closing of the house here. I anticipate that this would not be entered in the standard purchase contract. This means more paperwork and, if they are serous about this, drafting of a separate contract to guarantee the payment of these funds at a future date.

Attorney's Fees

Of course when there is a complicated exchange like the one Mr. & Mrs. Husick are proposing, there are going to be attorneys involved. If there is already an attorney involved in the transaction of real estate, perhaps he or she will do the added work as well, but I am sure the attorney will charge something for this. Who pays the attorney's fees? The buyer or the seller or do they split those costs?

What About Divorce?

Of course, we are wishing the Husicks the very best in life, but the question also came to me: What if they get a divorce? They could end up with step-children as heirs, etc. Also, would they be equally liable for the payment of the $400,000? If one of them expired before the other, and assuming they split the liability equally, would the $200,000 be put in a trust fund or given to the buyers at that time? Who would earn the interest on the account if it was held until the death of party #2? Yep. I definitely see lawyers involved.

Of course, there's MORE

The sellers are also offering to allow the buyers to inherit a home in Arizona if they care for them in their old age. That set my brain whirling again (Yes, I am just a little bit analytical - See What Side of Your Brain do you Use). At what age do the sellers consider themselves "old"? What level of care are the buyers expected to provide without professional help? If professional help is required are the sellers expected to pay or is that a cost to be borne by the buyers? And of course, you enter into another ethically sticky realm once you reach end of life decisions and the question about how much rescucitation to provide, etc.

Are these people even thinking about these things or are they just shooting offers out there in order to entice unwary and hopefully younger buyers? I mean, what if the person who buys the home is an 80-year-old man who expires long before the sellers? Does their offer extend to the buyer(s)' estate? Even if the buyers are younger, accidents happen so there's no guarantee that the sellers will die before the buyers. If they go through with this, it is likely to provide us with interesting news stories for years to come. I wouldn't want to be the agent representing them, though, not without an armload of disclosure forms.....