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Ok – myself and my husband are ready to buy a house after our lease is up on our apartment. We have been looking around and can’t seem to find anything in our budget in an area that we like. Plus, I should mention that my dad was going to give us a loan for the upfront costs so we could buy the home.

My husbands uncle went through a divorce last year (it was messy where they sold the house and then backed out of the sale and tried to make it work with each other but couldn’t) so now he is ready to sell and asked us if we were interested in buying his home. We were but,he was going to put his house on the market for $ 50,000 more than we could afford to spend. YIKES!

He tried to stay in the house with his 2 children but decided that it was too much maintenance for 1 person. Now it has been so long and he is ready to just be done with it. He doesn’t want to go through the hassles of putting it on the market again – and he just wants out of the house and wants to move on with his life. He is willing to work with our budget and sell it to us for something that we can afford to pay monthly.

How do we do this? I don’t know what upfront costs there will be and I am new at this and this isn’t exactly a normal situation. I don’t know where to start. Any suggestions or tips?

Thanks!

6 Thoughts on Any advice for a 1st time home buyer with limited upfront money and a family offer?
  1. Reply
    goz1111
    August 31, 2011 at 2:23 am

    In my personal opinion make sure the deal works for both of you not just the uncle. Remember at this point its a buyers market, so its really immaterial what the uncle wants to sell but what is the fair market value of the house in one of the worst housing bubbles in decades?

    That said the uncle may have an unrealistic value of the home, he may see an opportunity to on load the property for a higher price then the FMV based upon your current circumstances, as such I state you should move with precaution, for even though you maybe in love with the house a bad deal in a down market could haunt you for a long time

  2. Reply
    loveradsrn
    August 31, 2011 at 2:29 am

    i would get everything in writing …my in laws had offer us a house when we were first married ….but they lied to us ..we paid back taxes
    and fix all the problems in the house …after that we move in …three weeks after that his father kick us out ..saying he was selling it to someone else …because we didn’t have it in writing he got away with it ….never again will i trust anyone that way again

  3. Reply
    Ed Atun
    August 31, 2011 at 3:16 am

    This is a dream situation for any buyer; but especially for a first time buyer. See if you can move in to the house now. Set up a payment plan with Uncle. Just like he was the bank. He will do it. If he is worried about having all his money tied up in the house, tell him that you will go get a regular bank loan within 2 years. After 2 years of homeownership any bank will be thrilled to give you a loan. Get to work. .

  4. Reply
    Dizzy_Lizzy
    August 31, 2011 at 3:19 am

    Get an attorney involved and split the costs. The attorney can draw up the sales papers, and advise you both on your legal obligations.

    Do not buy the house without a home inspection. Family or not, you deserve to have a professional tell you what problems you’re buying. This will be roughly $ 500.

    You’ll have to pay a title company for their work

    * It reviews the owner history of the property, checking for who purchased the property, who sold it, and when.

    * It performs a tax search to verify the present status of taxes.

    * Some title companies conduct on-site inspections to verify lot size, the location of improvements, and evidence of unrecorded easements.

    * It conducts a judgment search to determine whether there are any general liens against the property.

    * It issues a “Commitment of Title Insurance” to the lender after completion of the title search. It receives instructions and documents for the closing, and prepares a final Settlement Statement. At the closing, which may take place at the title company’s office, the title company is responsible for collecting and disbursing the monies.

    You need to get quotes from a few home insurance companies so you can choose one. You must select one before the sale can go through.
    Your lender will quote all other costs to you.

    It is VITAL that you are aware whether your lender will add taxes and insurance into your payments, because that makes a huge difference in your payment and thus what you can actually afford each month (though you’d have to pay these bills at some point either way). My mortgage payment without those additions would be around $ 820/mo. With them, it’s more like $ 1,100.

  5. Reply
    Kathyrn F
    August 31, 2011 at 3:24 am

    I would start with a contract to buy the real estate. You will need to determine what reapairs need to be done, taxes to be paid, home association dues, if any, etc. Then I would see about pre qualifying for the financing, and a mortgage application will cost you up front, that covers appraisal and credit report. After that, there will be closing costs…stuff like inspections, title fees, doc prep fees, etc. I would also call around to title companies, a lot of them do For Sale By Owner packages, where they charge a much lower fee than a realtors commission. They will help you get it all together to close the deal, including an owners policy of title insurance and they also work with the lender. Some of them will also supply you with a blank contract that you and your uncle can write down all the specifics.

  6. Reply
    chatsplas@sbcglobal.net
    August 31, 2011 at 3:50 am

    Best way is to buy it outright and get a mortgage from a lender. Everything is businesslike. BUT this means your uncle has to sell to you at a price you can handle and get a mortgage for. Your father will have to do a gift letter for the closing costs.

    Home sale prices are declining nationwide. You need to pay for a certified appraisal to know what the value of this house is NOW. You can get free market analysis from realtors, but you should pay for certified one.

    You can do a Rent to Own with your uncle, a Contract for Deed. Get yourself and attorney, your uncle should have his own, and get the contract drawn up and vetted by both attorneys.

    BUT I question whether you are really ready to be homeowners. You don’t have down payment, you don’t have closing costs. Do you have good credit, do you have a history of making good financial decisions? DON’T buy more house than you can afford; Don’t overextend yourself financially.

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