Real Estate Donations For Your Major Gifts Program

Every nonprofit wants to go it alone, and we get it.

The thinking goes something like this: “It can’t be that hard. If we do it all in-house, we’ll save tons of money!”

While that’s a noble goal, the end result is almost always just the opposite. After spending countless hours trying to learn about a complicated gifting vehicle, the fundraiser either tries to handle a transaction solo and fails, or sets it aside with the intention to come back “when there’s more time.” Of course, there’s never more time …

This is especially true with gifts of real estate. Instead of enlisting someone who can handle these substantial donations for just a small fee and no headaches, too many fundraisers end up trying to go it alone — with sometimes disastrous results.

Real estate consultant Chase Magnuson, president of Real Estate for Charities, has created the following list of reasons why you should always hire a professional to handle donations of real estate. It covers interviews for professional services, donor documentation and buyer documentation.

“A gift of real estate involves complex timing and documentation issues well beyond the usual monetary donation,” he says. “Most organizations don’t realize how complex real estate transactions have become. The success of most property gifts comes only with solutions to problems that always arise—whether minor or major. Solving those are for experienced consultants with years of successfully completing transactions in most of the 26 specialties within the real estate industry.

“Here is the basic question a charity must be asked in terms of cost efficiency and chances for success: Why would they try to cross-train one of their staff members to handle the occasional real estate gift when existing expertise is available?”

Most charities simply do not have the in-house expertise to handle donations of real estate safely and efficiently. Are you thinking of going it alone? Before you do, review the following list of documents and issues that surround even the simplest of donation arrangements.

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Documents and Challenges Involving Gifts of Real Estate

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1. Interviews for professional services:
   • Qualified appraisers
   • Home inspectors
   • Title Company escrow officers
   • Realtors (26 specialties)
   • Surveyors
   • Environmental engineers
   • Donor interaction
   • Local real estate attorney

2. Documents for Donor:
   • Donation agreement
   • IRS forms #8283 and #8282
   • Listing agreement
   • Property insurance
   • Property management agreement
   • Phase I and II environmental reports
   • Homeowners Association Policy
   • Zoning regulations
   • Title search
   • Radon reports
   • Estoppel forms for leases
   • Copies of leases for review and audit
   • Easements appearing on survey.
   • Condominium declarations and policies
   • List of personal property
   • Deeds
   • Pending assessments
   • Smoke alarm certification
   • Lead based paint waiver
   • Transfer tax and recordation requirements
   • Foreign ownership waiver
   • Settlement statements
   • Resolution for authorization of signature
   • Mechanic lien wavers
   • Proof of installation of water conservation devices, security lighting and locks, seismic gas shut offs.
   • Contingent listing and sales contract language
   • Owner’s Declaration
   • Copies of service contracts
   • Withholding Certificate if needed by the State.

3. Documents from Buyers:
   • Fully executed purchase agreement
   • Assignment and assumption of leases
   • Lender instructions, fees, address, and documents
   • Proof of funds
   • Signing authorization
   • Corporate resolution to purchase.