any advice buying a home from a relative?

Tips and Deals Forums Buying Your Home any advice buying a home from a relative?

This topic contains 7 replies, has 7 voices, and was last updated by  Anonymous 8 years, 2 months ago.

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  • #208551

    Anonymous

    real estate

  • #264574

    Anonymous

    Don’t do it. Business deals with family can often end in heartbreak.

  • #277182

    Anonymous

    Let me tell you a story. My wife and I bought the house of our parents. This house is not a place where my parents lived life long. It was a house they had held for about 8 years. My dad was dying of brain cancer and the parents racked up quite a bit of debt. Since my wife and I were actively looking for a house we decided to buy it.

    The house was slightly overvalued and we bought on a house. We knew the house was overvalued, but try debating price with a person on a death bed. Not a pretty picture. So we bought it, and then the market came down crashing. Due to one thing or another we sold, and even though we took a big hit we were happy we sold when we did.

    The net effect of trying to make it easier on my parents was lost to my mother and siblings (except my brother). They thought we were ungrateful. I remember my sister telling me to my face, “but you got a great deal and look at all what they did for you.” My mother took things from the house that supposedly were ours as per the original handshake agreement. We said nothing, but the relationship with my mother has been very very distant. Yes we talk, and we are friendly, but if and when she needs money she is free to ask my siblings.

    Ok, so what did we learn?

    1) Never try to be nice because it will never be appreciated.
    2) Whatever deal you make take it to a third party. Let’s say the house is worth X, they say Y, then you get a real appraisal and pay that price. Remember to say this is a business deal and we will pay and you will accept the fair market value. A fair deal is the market no more no less.
    3) Ahead of time roughly draw up a contract. Don’t be too picky, but draw up something informal saying what you get and they get. I am referring to washing machine, drapes, etc.
    4) Don’t let your emotions get to you. Keep it fair and business like. Don’t make it like seem you are being vultures or suckers being taken advantage of. This is why third parties are oh so important. They keep things fair. And in the end if things don’t turn out, then they don’t turn out. You tried and that’s the way the cookie crumbles.

  • #277917

    Anonymous

    Either use an agent or a property attorney and get EVERYTHING in writing. Don’t skip the inspection just because cousin Bubba says that everything is OK with the house.

    Do everything just as you would if it was a transaction with a stranger.

  • #278003

    Anonymous

    Either use an agent or a property attorney and get EVERYTHING in writing. Don’t skip the inspection just because cousin Bubba says that everything is OK with the house.

    Do everything just as you would if it was a transaction with a stranger.

  • #285482

    Anonymous

    The very first thing the relative should do is call 3 local Realtors and request a ‘free’ market evaluation/analysis.

    When the three reports are complete, the relative will now have a realistic value of their property.

    In the meantime, you should go to your local bank and be ‘pre-qualified’ for a mortgage.

    Now you will have a written report as to exactly what you can afford.

    At this time, you are both ready to sit down and see if you’re both in the same financial ballpark.

    The reason I suggest these steps be followed…It takes the emotion and family feelings out of the dealings.

    With all parties knowing the cold truth, the value and the affordability…you can approach the purchase as a ‘business deal’.

    The relatives can then decide if they want to come down on their price to make it affordable for you…
    And you can decide if this is the house you really want…

    Before putting any agreement to buy in writing…tell them that your bank will require an ‘inspection’ of the property.

    You hire the company and pay for the ‘home inspection’. You will receive a report, telling you everything wrong with the house….and a ballpark cost to repair any damages or necessary repairs….or you may need to get independant estimates.

    The cost of the ‘most important’ repairs will also determine how much you can offer them for their property. A new roof and replacing the furnace could run you $15-20,000…..they make the repairs and reflect it in their price.

    When all is said and done…and you buy their house…you won’t have to spend the next 20 years listening to remarks from jealous relatives…how you STOLE the farm from Grampa.

    Trust me, this is the fairest way to handle purchasing a property from a relative.

  • #287889

    Anonymous

    A home is generally a person’s largest investment and appropriate steps should be taken to ensure that all parties are happy with the conclusion. I actually believe that all business done with relatives should follow the same formal procedures as with stranges to protect the interests and feelings of all parties.

    I suggest performing a full third-party inspection as you would if you were buying a home from anyone else. The inspection should prevent any future differences with your family member. For example, you don’t want to find out that the house has faulty plumbing and then stay awake at night wondering if you should seek compensation from your relative. In this manner, both parties will know if a problem exists and can mutually determine a remedy (or not buying the property) prior to the transaction.

    Hope this is helpful.

  • #290602

    Anonymous

    The answer would be NO, no if something should come up wrong for any reason;you are going to be very upset at your relative. Never do bussiness with family members or church members, because you can quickly learn to despise them.

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