Real Estate the Ramsey Way - "Dealing with Real Estate Drama”

Episode Date: August 18, 2025

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Dave Ramsey here and welcome to another episode of Real Estate, the Ramsey Way, where you'll learn how to make smart home decisions, avoid costly mistakes, and navigate homeownership with confidence. Jennifer's in Little Rock. Hi, Jennifer. How are you? Hi, sir. Thank you so much for taking my call.

Sure. What's up? Well, I'm desperate for some sound advice. My mom is in the middle of escrow. She's actually very near the end of escrow, trying to sell her home. Very late in the process, we discovered that there were three liens on the home from a loan that my dad took out in 2007. Now, my dad died in December of last year, and this was news to us. My mom did not know about these lanes.

And since we feel like we're running out of time, we don't have any answers questioned as far as if my dad ever tried to pay these back, if the person ever tried to collect over the last 18 years. So my question is, do we continue with the sale of the house and cut the lien holder a significant check due to the supposed interest that's accrued? Do we pull out of the sale of the house? Have you been in touch with the lien holder? The lien holder has been negotiating with the real estate office, and they've let us know in no uncertain terms that she is difficult to work with, not a very nice person. What's the lien from? We don't know.

Our best guess is that he was trying to borrow some money to help the house not to be in default way back then. But who did he borrow it from? He borrowed it from an ex-co worker, and she is listed as the trustee and her company, her real estate company, is listed as the beneficiary. But this is all we know. All we know is that there are. Okay. So you actually have, you've had contact, and they gave you a payoff amount.

and you just don't like it. Well, no, they haven't. We have been told that she wants the amount that was owed plus interest. That would be reasonable. Right, but she won't let us see anything. And we were told this week, actually, that she would give us numbers. We've asked for a promissory note. We've asked for any indication that any of this has ever been touched, paid,

or sought after over the last 18 years. How much is it? So the loan was $33,500. And so we're looking at upwards of $67,000. And then what's the equity in the home? It's still a very large amount. My mom is trying to sell it, and so far she might only walk away with $180,000. She's selling it for $900,000.

And you said there's other liens? Well, it's all three separate liens to the same person in the total of $33,000. Oh, I got you. Okay. Yeah. Well, you've got two choices. One is you get a number, a solid number from this person, and you pay them that. amount and you get clear title if you and even if you don't like it two is you

delay escrow just call the buyer and go we can't sell it because we can't get settlement on this lien I can't give you clear title the contract you sign it says you have to offer them clear title and you can't because you can't get to the bottom of this lien and then you sue the woman that's what I was the other option is do we just give her the money and then come back for it no no you don't give her the money if you're going to sue her you stop the sale Okay. Don't sell the house. Okay. Give her nothing. Don't give her money to buy the attorney to fight you with. And that's the other aspect. We've been turned down by two probate attorneys and one real estate attorney who refused to take our case. And we don't know why. But we don't have access to my dad's bank accounts. And we know that he was given a large sum of money before he died that we are hoping and praying that maybe he applied to this loan. But we just don't have the time to research.

because we're not sure how much. Well, you think this woman is ripping you off, is what you're saying. Yes, yes. You think she's been paid and she's acting like she didn't? Yes, yes. I mean, she's threatened to foreclose when she found out that my dad had died and that we were seeking to, you know, fulfill this loan or whatever. She said, so sorry for your loss.

I was actually about to foreclose on this property. So it's been very difficult. You're going to have to get, you know, it's not unusual. for you to ask some kind of forensic proof on how the balance was ascertained. And, you know, why do you not have access to your dad's? How long did your dad die? It was this last December. And unfortunately, he was not good with money.

So my parents had to his account. And so the, but, I mean, why do you not have access to his accounts yet? Well, we tried to get it through probate. But like I said, we've had two attorneys tell us that this is too much of a big mess and either they don't want a part of it or it just, I guess, doesn't matter to them to try to pursue this for us. But your mom didn't have access? No, she did not. She was not listed on the account anyway.

Well, you just hadn't found a good attorney yet. I mean, it's not a big deal to get access to accounts. That's what we've been told. If you get access to the accounts, then you can tell whether he actually paid something, and you've got proof that he paid something against this lien, but we don't know what the original lien is. There's no paperwork on any of it anywhere. Right, right. Yeah.

Yeah. So we're asking for more time, but we're feeling backed into a corner with escrow closing. You have a choice. You have a choice. You either delay the closing and sue the woman and get the thing in probate and get the account information out and do a full forensic on it and figure out what's really owed, if anything, on this lien. Or you just write her a check and move on with your life. Yeah. Yeah. And by the way, just to be very clear, I don't know that this woman's a crook. your dad is the one sorry that's to blame for all this oh yes

not not this woman she probably she very legitimately loaned him hard cash at some point and he didn't document squat and she wants her money back I really don't hear anything wrong with what she's doing

except that she's a bit of a butt that's the only thing I hear from her okay but she could be just disgusted with your family That's very possible. I mean, so I'm going to give you a better than 50% chance. She's giving you real numbers. I don't hear anything here that sounds crooked to me other than the fact that she's got an attitude.

But if you think that if you have some reason to believe she's cooking the books, then the only thing you can do is delay the closing or stop the sale completely. Lose the buyer, get another buyer later after you sue her and get to the bottom of this. and you get the, you know, but you may go through $20,000 in legal fees only to find out that you actually owe all this. That's very possible. But now, I will tell you, in your defense, since I took up for this lady, the lady ought to be able to just provide you guys with some basic documentation and go, look, your dad, loan me, I loaned him this much money. He never paid on it. I'm aggravated with him.

So, therefore, I'm aggravated with y'all, even though you didn't do anything technically. but he loaned me $33,000. I loaned him $33,000 on this date. I never have received anything. Here's the interest rate. Here's the promissary note. Or here's the email that we used to do the agreement with. I don't care.

What's the structure of this loan? Provide some kind of documentation so that she's got a little bit more credibility rather than just flipping you the bird. But it doesn't sound like nobody in this whole story has done a good job. your attorneys haven't done a good job your real estate agent has done a good job your dad didn't do a good job this lady hadn't done a good job so nobody in here is blameless but um but i got a feeling just listen to this that your dad borrowed 33,000 from her never paid her that's just kind of what it sounds like that fits the pattern of the other stuff he did so you may want to just add up the interest

on the 33,000 and pay her and move on with your life and then go get probate attorney and try to get those accounts unlocked and figure out if there's any money in there and then be shocked if there is. Wow. Could a forensic accountant help with this? Yeah, but you've got to be able to get a hold of the information. Yeah, so the probates first. Yeah, the lady that just did the debt free scream could help her, you know, I mean. Well, I was wondering if a forensic accountant could do the research on the lady who loaned dad the money.

But you've got to be able to lay your hands on documentation. Somebody's got to have a file somewhere. Yeah. E-file or hard copy either one. You've got to be able to say, here's the actual promissory note, here's the terms of the note. They, you know, and so, yeah, he's in default, and I was getting ready to foreclose. Yeah. Ouch.

What a mess. Yeah, I think you, it's a coin toss, Jennifer. I don't know which one I would do. I'd want to learn a little bit as much as I could learn. And I got a feeling she's probably got a fairly legitimate claim. Hey, guys, thanks for listening to Real Estate the Ramsey Way. Now, if you're here, you're probably thinking about buying or selling a house. It's exciting.

and one of the biggest financial decisions you'll ever make. But you don't want to do it with an inexperienced agent who will rush you into costly mistakes, like the ones some of our callers find themselves in. You need a pro who knows what the flip they're doing and will keep you on track with your financial goals. That's why we only recommend Ramsey trusted real estate agents. These are vetted, hand-picked pros who actually listen to your needs, guide you through the process, and fight to get you the best deal. To find a Ramsey trusted agent near you,

go to Ramsey Solutions.com slash trusted agent. That's ramsey solutions.com slash trusted agent. Brady's in Boisey. Hi, Brady. Welcome to the Ramsey show. Hey, Dave, Virgil. Thanks for taking my call. Sure.

What's up? Hey, my wife and I, we've done pretty well, been married about a year and a half, saved up a down payment for a house. We've got about $110,000. Wow. We're really wanting to follow you guys' plan with a 15-year mortgage. But the average house price here, just based off our incomes,

we're going to be a little bit over that 25% mark on a 15-year. And I heard George mentioned it on an episode the other day where he said it's kind of a guideline and just kind of give you context. We spend about $6,000 to $7,000 a month. Our total salaries is 210, but our total take home was 275 last year. And just kind of what we're looking at, I'm trying to determine if that 25% mark is flexible. And yeah, we save about $5,000 to $6,000 a month, and that's with rent of about $25,000. What will it be at?

What percentage? The interest rate or what is the percentage? No, what percentage of your take-home pay? Not counting 401k and not counting health insurance coming out of your check. Is it 27? Is it a tax income? What percentage of that is your payment going to be? The house we're looking at is like 37% right now.

Bull crap. That's dumber than a rock. No, that's not a guideline. That's running your car through a wall. Yeah. It's not even close. I think I was actually on the show with George when we were talking about this because I think we were talking to somebody and I remember he was moving,

actually looking in Williamson County. This is the same call, Brady. I don't know if it was. And he was right at like 26.2% or something. And that's what we were like. I'm not going to grab about that, 37%, dude. You're going to be house poor. You're going to be strapped.

You're not going to be able to breathe. So, okay, Boise is not double the national average. You're looking in a neighborhood you can't afford. Dude, the median house price in America today is 431,000. Boise would be pretty close to ride up the middle. of that. So the median house price in that area is a half million dollars, and you're looking in a million dollar property. We're looking at $5.50. Total monthly payment is $4,000 a month with 110 down. I'm doing something wrong. Wait a minute. There's something wrong with this formula.

$275,000. And so that's $20,000 a month take-home pay, right? Our take-homes, I I just based off salary. That's what my wife and I decided was $210,000. Okay. You don't get to decide. It's your income. What if you were on straight commission and you made $400,000, but I want to base it off my salary? Well, then you'd be living in a TP.

So, no, we look at our income, dude. Is your income not stable? No, income's pretty stable. Okay. So you have a $275,000 income. No, he said $210. He said $210 plus bonuses, $27,000. Oh, okay.

That's his income. So that's a $20,000 a month take-home pay, which is a $5,000 a month payment that you can afford on 15-year fixed. Right? Am I doing this wrong? Yeah. No, I think I was doing my math wrong. And I was looking at our 210 and netting out our giving. No, your giving is not one of the things.

And retirement as well. Add that back in. Yeah. So it's before, it's really just after taxes. Your after-tax income monthly divided by four, giving you a 25% on a 15-year fixed and 15-year fixed this week or 5.9%. And I will say, the phrasing take-home pay can be confusing because you're thinking what hits your account and already insurance 401K, you know, all of that's taken out before it hits your account. So, quote-unquote, take-home pay just means after-tax. Yeah, that's the misnomer here.

But point being is that if it's – so I think that's going to – when you rework the night. numbers with those two different things. Should come closer. I think you're going to be real close. Yeah. It sounds like we were just way being way too conservative. Accidentally, because you were taking out 401K and other stuff, and then on purpose on the 210 versus the 275.

Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. So, I mean, and so what were, the purpose of the whole discussion, though, is this. Don't get yourself, all of you out there in America, in a position.

where you're what we call house poor, that by the time you pay your house payment and you buy food, you're broke, which means everything that comes up in your life is probably going to turn into new debt unless you're very strong because you're not saving for car replacement. You're not saving for the next couch. You're not saving for Christmas. You're not saving for vacation. And all these things turn into new debt because you've got no margin in your monthly budget because you spend it all on your stinking house. When you put yourself in a corner and, I, I, and make yourself house poor is what we're trying to prevent for you because it's not a sustainable thing. You can't sustain that for 10 years. So you call me up and you let, you know, of your take home

pay after taxes, you got 40 or 37% going to your house payment. You're not going to be able to survive doing that. That's going to come back and bite you in the butt because you set yourself up to be house poor because that's a, that's a lot of money. and you took away all the margin to do other stuff that you are going to do. And then it's going to end up being new debt or it's going to end up being a strain or it's going to end up, you know, we don't keep up with maintenance. We don't because we're out of money all the time. And what we're trying to prevent with this.

There's no, we don't have any pride in the actual 25% number. It's just a math thing. You need some what we call, what economists call disposable income after you pay your house payment so that you can do other. stuff in life. That's all we're trying to get to here. And so, yeah, Brady, I think you're okay when you get down into this and you unpack this because I was doing it quick in my head, but I think you're pretty close and you're probably going to be fine. But let's just talk through it. And the overarching principle is not 25 versus 26 percent. Right.

To George's point of it being a quote-unquote guideline. But the overarching principle is don't get yourself in a position where you can't breathe because you got house fever. And instead of taking a cold shower, you went and bought something and you paint yourself in the corner, the proverbial, you get wet pain on your feet because you're stuck in the corner and everything's wet. You created a life that is not sustainable without creating a mess. Yeah. And we always go back to this principle and idea.

The whole reason for all of this, right? The whole reason of being wise with your money, of taking control, of budgeting, having smart percentages with where you're allocating things, it's to create peace. That money is one place in our lives that can create so much chaos, and we're trying to avoid that. How can we let this part of our lives, our money, have peace in our lives and it not be the stress point. And so always remember that.

When you're looking at buying big things, you know, whether it's a new car or a house, is this going to create peace for us or is this going to create more stress? and anxiety, and that's what we're trying to avoid. So that's, again, the heart behind it. But I always remember that. We're looking for peace. We want peace in life. We don't want to be stressed and full of anxiety.

So how do we do that with our money? That's good. It's good. Dr. John talks about that and, you know, the redefining anxiety. You know, solve for peace. Yes. Solve for peace. And that's what we're doing.

We're solving for peace. Yeah. And if Brady's numbers were more like what we were talking about the beginning, as we were wrong, then drive 20 more minutes to go get a house to keep peace. Like, you know what I mean? Like, whatever that means that you have to do, it is worth it. It is worth it for your soul as a humanist life to have that piece. It is worth it.