What's the worst that could happen if we buy a house from my husband's boss?

March 26, 2007 4:08 PM

I'm interested in buying a house that is owned by my husband's boss. Is this a bad, bad, bad idea?

I'm not sure what I'm worried about exactly. So I'm looking for anecdotes and advice from anyone who has bought or sold a house to friends, co-workers, and acquaintances. The house needs work, so there will definitely be some back and forth over the inspection. It's currently listed by a realtor, but it's possible that we could go to him directly and try to cut the price by cutting his commission obligation. Do we need to disclose the fact that co-workers have described the work they've done on the house?

It's a small town. If things soured somehow, there are really no other jobs for my husband right now. But there aren't too many homes for sale either.

posted by saffry to home & garden (11 comments total)

As long as you accept that any problems not found in the inspection process are yours and yours alone, I wouldn't worry about it.

Sellers expect buyers to haggle over repairs, and most of the time, it's done through an intermediary, eliminating any potential awkwardness.

I wouldn't buy a car from your husband's boss, but a house purchase involves lots more 3rd-party input and buyer protections. Just make sure you don't give any special considerations because of the relationship.
posted by M.C. Lo-Carb! at 4:14 PM on March 26, 2007

I sold a house to a friend. It's not a good way to stay a friend unless you feel like you're getting a deal and the person selling thinks they're getting a deal. In my case, there were a few misunderstandings about minor details, and that wasn't fun.

Here's the things I would say you can expect to have to live with:

1) Realistically, you will not be able to go to the seller and complain about anything. Think about whether you're the type to want to get a hatchet and go after the previous owner when tree roots clog the sewer line two weeks after you move in, or even more serious problems like a badly cracked foundation which wasn't caught by the inspection.

2) In the same spirit, you will have to hold your tongue about problems when asked about the house by the boss dude. Anything you say he, in all likelihood, is going to take personally.

3) If it's a really good deal for you, and your hunband's boss is of the wrong nature, it could potentially be a problem for your husband at work. "Hey, I gave you a good deal on the house, it's only a few hours overtime" or "you got your raise when I sold you that house." This is less likely, but possible.

But if it's a nice house and a decent deal, go for it. I would make extra effort up-front to make everyone understand it's a business deal and not a favor in either direction. Unless it is. See above.
posted by maxwelton at 4:22 PM on March 26, 2007

The idea of cutting out the realtor commission to save yourselves some money may be very appealing, but IME with something like this it's better to keep it strictly business (also, if he has signed with a realtor, he probably can't sell it without the realtor and not pay a commission--IIRC, when we've listed houses for sale with realtors, the agreement specifies that the realtor gets the commission even if someone else sells it).

That said, house sales are actually pretty straightforward. The negotiating takes place with realtors as intermediaries, rather than with buyers and sellers face to face. Unless the boss is a person who is inclined to be nutty and unprofessional, it should be fairly straightforward.
posted by not that girl at 4:29 PM on March 26, 2007

It's maxwelton's #3 possibility that screams out to me, 'Danger! Danger, Will Robinson!'

You will have to judge for yourselves, of course, whether the boss really is that kind of a person. (How well do you know said boss?)
posted by eritain at 5:08 PM on March 26, 2007

It's currently listed by a realtor, but it's possible that we could go to him directly and try to cut the price by cutting his commission obligation

Nuh-uh. Even if you went directly to the boss and bought it, that commission will be owed. Whether or not the realtor handled the deal.

You need to have your own realtor (a buyer's agent) to negotiate FOR YOU. The commission would then simply be split by the two realtors and it would cost you nothing. If you went in without a realtor, their realtor would be looking out for THEIR best interests not yours.

But unless this is a killer deal or your husband is already looking for a different job, I wouldn't buy this house. There are too many things that can go wrong with a deal, or that can make the two sides antagonistic-it's bad bad news.
posted by konolia at 7:11 PM on March 26, 2007

I think this is a bad idea. You cannot negotiate effectively with your husband's boss. He makes decisions about hiring and firing your husband: raises, working conditions, job assignments, etc; and this gives him leverage over you that you can't match.

For example, you could get halfway into the negotiations and find yourself in a situation where not giving in to his unreasonable demands would anger him and pulling out of the negotiation would anger him. No matter what you do, you are screwed. Then, your husband is working for someone who doesn't like him. Although fair employment laws prohibit obvious retribution there are plenty of ways for a boss to make an employee's life miserable. So I would not risk this.
posted by ikkyu2 at 7:41 PM on March 26, 2007

I would seriously advise against this for all the reasons listed. Plus, depending on where he works, there are quite possibly company policies against this, whether he or his boss knows about them or not. If it is a public sector job, they could likely both lose their jobs over something like this.

Best of luck.
posted by etc. at 8:22 PM on March 26, 2007

I purchased a home using my friend's wife as a realtor. Long story short, issues arose, and it created a very big problem. But I think this was more of a specific personality type of issue, and less of a general one.

Bottom line: You and your husband are the only ones in a place to make the call. Is your husband's boss the sort that can take frank talk, takes responsibility for his own mistakes, and has very good boundaries? If not, then I would beware. As you mentioned, you have a lot to lose.

I also wouldn't let your 'house lust' get in the way of looking at this objectively. This is a big decision that could have a lot of consequences.
posted by jazzkat11 at 9:29 PM on March 26, 2007

yeah walk away. small town, too? yikes.

here's the chances of getting people ticked off:

buy house- boss 50%, realtor 50%

don't buy house- boss 0%, realtor 0%
posted by thilmony at 6:53 AM on March 27, 2007

My best friend purchased my house in a very small town, through a realtor who was also a friend. We did everything by the book, and I was thrilled that my beloved home went to my beloved friend, and that my realtor pal made some money. We did invest a couple of hours in a very direct, frank conversation, trying to anticipate (with the realtor's expertise) what the potential landmines could be and coming up with a multi-scenario plan for each.
posted by thinkpiece at 7:28 AM on March 27, 2007

I think ikkyu2's hit the nail on the head. The boss has a lot of employees who show a surprising amount of loyalty to him, but my husband is not one of them. I think he would expect us to be more pliant in negotiations, and be surprised and then angered if we weren't. Yeah. Bad idea.

I'll try to forget the beautiful kitchen, large yard and hardwood floors and instead focus on the puddles of water surrounding the foundation.

Not that girl: Unless the boss is a person who is inclined to be nutty and unprofessional So definitely a bad idea then.
posted by saffry at 10:07 AM on March 27, 2007