could you help me make ethical decision?
Hello investors,
I recently came across a scenario and I need sound and ethical advise. I was driving in my ant-farm neighborhood when I came across this old man in front of his house. I pulled over and asked him if he knows any houses in the area that are vacant or for sale. He immediately told me "hey, you can buy my house if you like". He said that he has been living in this house for 40 years and he is alone by himself.
I asked him what is the minimum he would accept and he said $40K would be fine. I went home researching. the property is worth $100. The old man bought the house in 1966 for $12K. He is pretty old and I am just not sure if he knows the actual value of his house.
It is a great deal, but I keep feeling uneasy and I am not sure how to handle this. How can I handle this? walk away? tell him I give him more than he wants($60K)? find out where he would go after selling his house?
any good ideas? what is the right ethical thing to do. I know $cash$ is all for honesty.
thanks in advance, hrash 
hrash
You were thinking correctly in your assessment of this situation, here we have a senior citizen probably just lonely and you stopped by to say hello.
Without making sure this person is capable of making a sound decision you would be better off not following through with anything. You need to talk with someone who is aquainted with this man and can give you information about him.
We think of Senior Abuse as physical abuse however, this is not always the case, taking advantage of a Senior Citizen is also a crime should it come to light a Senior has been taken advantage.
Do a some due diligence find out about this person, save any headaches from coming back at you.
John $Cash$ Locke
I believe that you could do this deal if you found out more about this man. It is conceiveable that you would be doing him a favor by taking the burden of the house away from him BUT ONLY IF that is what is in HIS best interest. Sometimes older people, especially those who are alone, cannot take care of an entire house and would love to get out of it. Houses can be burdensome to maintain if you have no one to help with the cleaning, yard work, etc. The idea to sell it may come to these folks but their idea of how to sell would be to fix it up, clean it up, and make it ready by RE Agents' standards. Well if the older person could do all that then they wouldn't need to sell it in the first place so they figure they just can't sell the place. In this instance it would certainly be ethical to help him with what is actually a burden.
The important thing to remember is to verify this info. Ask him but not only him but nyone you need to until you find out the entire picture. It has been said that he may not be the best person to defend his own interests if he is of less than sound mind (but don't assume that just because he is old that's just a s bad). On the other hand he may be able to tell you right off what he is doing and why. He may be looking forward to getting rid of the house that is too much for him.
You are on the right path when you indicated that you should figure out where he is planning to go afterwards. Maybe he has something that he is looking forward to doing once he is rid of the house burden. I think that you would do well to try to check on his financial situation to see if this transaction is acceptable to him. Since he has owned the property that he only bought for $12k he probably owns it outright. In this case the $40k may be a giant windfall and plenty of money to live on if he is used to living on a small pension or Soc. Sec.
The main point is just be extra, extra, extra certain that you are doing the right thing and don't assume that you are doing the wrong thing. You seem to be plenty mindful of the situation so you'll do fine.
[addsig]
You seem to really care, so I think a good rule of thumb is to consider how you would want someone in the same situation to treat your aging mother?
If that dictates that you walk away then fine. If that dictates that you offer him more than he is asking then why not? There is still profit in the deal for you.
excellent responses ...
thank you all for the guidance. I am going to talk with him and see exactly what his plans are for the future and where he is planning to live after this. I probably make a good offer(better than he wanted) and have him run this by his relatives if any. If I still feel uneasy, I will walk.
Thanks everyone ...
hrash,
I commend you for wanting to do the right thing. I always try to teach others to operate their business ethically and morally.
There are motivated sellers, and there are uninformed sellers. If the senior were asking $40k out of motivation that is OK, however based off of the information that you are providing it sounds like that there is a possibility that he is uninformed.
PROCEED with caution. Even offering $60k if he is uninformed would be wrong. I would get the family involved and have them sign disclosures stating that they are awere you will be making a profit on the deal and that after you do repairs it will be worth substantially more. You need for them to acknowlege that the home needs repairs (if any) and that because it is in need of repair the home is worth less then full market value.
Again, I commend you for wanting to do the right thing. I wish there were more people like you getting into the business.
Happy Investing,
Steve Cook
PS- Take your time to discern the situation, if the seller is MOTIVATED and of sound mind, don't throw the deal away.
Steve,
it is always great to get advise from one of the gurus. Great advise ...
thank you