Real Estate FAQ

Real Estate Donation Frequently Asked Questions

What type of real estate can we accept?

Any type of property may be donated that has positive equity, a clear title, and no environmental issues. Common property types are land, second homes, rental properties, commercial real estate and estates. Timeshares and mobile homes may not be accepted.

Is it easy to donate real estate?

Yes! Through a national real estate auction platform and a national title company partnership, real estate donations are quickly vetted and converted to cash to support DAV. DAV does not own or operate the property as part of the process. Donors do not pay for anything and only need to fill out a seller disclosure and sign the deed at closing. CARS takes care of everything else.

Can I donate real estate with a mortgage balance?

Yes, you can donate real estate with a mortgage balance. The proceeds of the auction sale will be used first to pay off any mortgage balance. Prior to the auction, CARS, our real estate partner will determine if the likely value exceeds the mortgage balance. In cases where an asset doesn't have enough equity to result in a surplus, we'll unfortunately be unable to accept it.

Can I give a portion of the equity to DAV, or do I have to donate it all?

Yes. If the donated property has a high enough value, the donor may elect to donate a portion of the equity (falling under a Bargain Sale-IRS Section 170).

How will the tax deduction be determined?

The value of real estate donations are based on the full appraised value, not the sale price. In most cases, donors may deduct the difference between the cash received and the fair market value based on an appraisal specifically completed to assess the value based on IRS gift appraisal guidelines. Donors may not deduct proceeds that were applied to pay off mortgages or back real estate taxes. The deduction can be carried forward up to five years following the year of sale.

How long does it take to complete a real estate donation?

Most property donations will be completed within 45 days, and some as quickly as 14 days. Our goal is to maximize the value of the property.

Who pays commissions and/or closing costs?

Donors do not have to pay any commissions. If the property is currently listed with a broker, the DAV Real Estate Donation Program provider will pay the commission owed based on either the list price or the tax assessor value if there is no list price. All unpaid liens will be paid off at closing. The donor is generally not asked to pay anything out of pocket, and there are no closing costs to the donor. Prepaid property taxes and assessments will be remitted back to the donor at closing.

Can either party cancel the donation agreement?

In short, it depends on the transaction. If we can’t achieve a sales price that results in a surplus, or if there are title or serious repair issues found, we may have to terminate the donation agreement.

What if a property has environmental issues?

The DAV Real Estate Donation Program provider has the ability to process properties with environmental issues, however, only high-value assets would be considered due to the risk and complexity. We have investors specializing in environmental clean-up and often issue indemnities to sellers via complex insurance placements.