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#1
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Buying a house from a parent?
Well, its about that time, and I'm scared to death.
I'm in a situation where the best option includes me buying my mothers house. We have not talked to a real-estate agent yet, but I was wondering if there was any knowledge on the forum side of the world that could help me out. How big of a legal can of worms does it open up to buy a house from your parent? Are there any loopholes that this situation falls through. Some situations with this for vehicles are a tax free transfer, but I'm guessing a home buy is a different ball of wax. Bit scary for a 21 year old, I can do anything, but boy is this spooky. I've never spent more then $2000 on any one thing in my life at this point. Spending 150ishk is astounding. Little help? ~Nate
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95 Honda Shadow ACE 1100. 1999 Plymouth Neon Expresso. 2.4 swap, 10.5 to 1 comp, big cams. Autocross time attack vehicle! 2012 Escape, 'hunter" (5 sp 4cyl) |
#2
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Why does the situation make it the best option?
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1977 300d 70k--sold 08 1985 300TD 185k+ 1984 307d 126k--sold 8/03 1985 409d 65k--sold 06 1984 300SD 315k--daughter's car 1979 300SD 122k--sold 2/11 1999 Fuso FG Expedition Camper 1993 GMC Sierra 6.5 TD 4x4 1982 Bluebird Wanderlodge CAT 3208--Sold 2/13 |
#3
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You need a mortgage broker and maybe a lawyer, not a real-estate agent. The sellers and buyer are already connected in this case, so paying some frou-frou bint 5% commission would just be dumb.
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#4
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Gotta agree with Kerry on this one. Having a 21-yo take on a 150k mortgage is an iffy proposition. You need to have everything clear and in writing. Is your mom going to stay there? What happens if you default? Are reverse mortgages not an option? Is the house worth what your mom wants? Is it an asset/liability you really want to take on? IIRC, you're either active duty, guard or vet. Are you using VA or some other program? They may have special rules or inspection requirements. Or they may have special rates. Don't overlook them. If you have the option, contact your JA. Maybe an estate planner or local real estate attorney is your best bet. Since you asked about special circumstances, there are some listed here: http://www.bankrate.com/finance/real-estate/7-tips-for-selling-your-home-to-family.aspx |
#5
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If the house can be rented out at a profit, then it's a win regardless whether the 21-yo lives in it (cheaper than renting) or rents it out (a few hundred per month towards rent somewhere else). |
#6
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Not around here, nor in most places in the USA according to the Economist.
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1977 300d 70k--sold 08 1985 300TD 185k+ 1984 307d 126k--sold 8/03 1985 409d 65k--sold 06 1984 300SD 315k--daughter's car 1979 300SD 122k--sold 2/11 1999 Fuso FG Expedition Camper 1993 GMC Sierra 6.5 TD 4x4 1982 Bluebird Wanderlodge CAT 3208--Sold 2/13 |
#7
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Quote:
(My apartment is ~4% and it's in NYC which has notoriously suck rates of return.) |
#8
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I could have lived in the Penthouse floors of my first place, a high rise apartment with no maintenance, pool, hot tub, gym, driving range, basketball court, unlimited secured enclosed parking, ballroom for rent, and close to everything for $1100 plus about $300 for utilities. Normal apartment was $650 a month. http://250douglasplace.com/ Plus I'd be all by myself, and wouldn't be suffering with a 2 car garage.
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1985 500SL Euro w/ AMG bits 130k 1984 300SD Turbodiesel 192k 1980 240D Stick China 188k 2001 CLK55 AMG 101k 2007 S600 Biturbo 149k Overheated Project, IT'S ALIVE!!! |
#9
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As far as the apartments, amazing. Something like the 1 bdr floorplans on the site would rent for $1500-3500/mo in Manhattan, depending on the area, with not so many amenities either. Not that that entices me to move to Kansas I've seen quite a few properties that would make 7% or more profit on cash investment, but maybe that's because I'm actively looking to invest at the moment and have learned to actively ignore the ones whose rates of return will suck. Lastly, most "buy vs rent" comparos are screwy, because they compare median rents vs median purchase prices in a given city (often for a given # of bedrooms). A better method would be to take a random sample of individual properties that have been both sold and rented in the preceding year, and average the % cash rate of returns. The first method is stupid because rental properties are often of poorer quality/lower end than those for sale. |
#10
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I just don't feel comfortable with debt, and I feel like getting the balance knocked down right now would be smarter than putting the difference in my investment account.
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1985 500SL Euro w/ AMG bits 130k 1984 300SD Turbodiesel 192k 1980 240D Stick China 188k 2001 CLK55 AMG 101k 2007 S600 Biturbo 149k Overheated Project, IT'S ALIVE!!! |
#11
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Right, but my point was that if you got a killer job in CA tomorrow and had to move in a month, you'd at least break even on the rent vs expenses. The place isn't tying you down.
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#12
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I agree, paying down a mortgage is a smart thing to do. I did that and paid off my first house in 12 years.
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For the Saved, this world is the worst it will ever get. For the unSaved, this world is the best it will ever get. Clk's Ebay Stuff BUY SOMETHING NOW!!! |
#13
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Debt sucks......
How do you spell relief?? By making that LAST damn house payment.......
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Palangi 2004 C240 Wagon 203.261 Baby Benz 2008 ML320 CDI Highway Cruiser 2006 Toyota Prius, Saving the Planet @ 48 mpg 2000 F-150, Destroying the Planet @ 20 mpg TRUMP .......... WHITEHOUSE HILLARY .........JAILHOUSE BERNIE .......... NUTHOUSE 0BAMA .......... OUTHOUSE |
#14
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Given the choice between a fully-owned property and an encumbered property, but with money either in the bank or in investments, I'd choose the latter.
Debt is good if you can afford to be conservative with it. |
#15
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There is some truth to that during "normal" economic times, but I am sure happy to not owe on a mortgage nowadays.
__________________
Palangi 2004 C240 Wagon 203.261 Baby Benz 2008 ML320 CDI Highway Cruiser 2006 Toyota Prius, Saving the Planet @ 48 mpg 2000 F-150, Destroying the Planet @ 20 mpg TRUMP .......... WHITEHOUSE HILLARY .........JAILHOUSE BERNIE .......... NUTHOUSE 0BAMA .......... OUTHOUSE |
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