Estate Planning for the clueless.
April 2, 2006 8:09 PM Subscribe
What are the advantages and problems involved with buying my father in law's home?
My father in law owns a home and is starting to think that he might like to sell it. We would like to buy it, but there is a significant difference between our top affordable price and the likely value of the home. What, if any, are the pitfalls of him selling us this house at the price we can afford, and not the value of the house? Would we run into legal and/or tax problems?
If we do this, would we save anything on closing costs? Also, would the difference between our price and the value of the home be considered inheritance? Is this a bad idea, or a bad way to pass on an inheritance? He will not need the income from this sale to buy a new house.
My father in law owns a home and is starting to think that he might like to sell it. We would like to buy it, but there is a significant difference between our top affordable price and the likely value of the home. What, if any, are the pitfalls of him selling us this house at the price we can afford, and not the value of the house? Would we run into legal and/or tax problems?
If we do this, would we save anything on closing costs? Also, would the difference between our price and the value of the home be considered inheritance? Is this a bad idea, or a bad way to pass on an inheritance? He will not need the income from this sale to buy a new house.
Generally, when older people leave a home, they leave behind a property that needs a bit of maintenance. Are you in a position to have it inspected? Would you feel comfortable scuttling the deal if the inspection turned up a repair you could not afford?
posted by crazycanuck at 9:59 PM on April 2, 2006
posted by crazycanuck at 9:59 PM on April 2, 2006
I would be more careful in regards to personal issues that would come up. I've seen plenty of families get torn about over money, which could happen in a scenario like this. Arguments over money, who is responsible for what, misunderstandings over a transaction....just try to be prepared for that possibility.
posted by Todd Lokken at 5:50 AM on April 4, 2006
posted by Todd Lokken at 5:50 AM on April 4, 2006
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You need to use a real estate lawyer for this transaction anyway. S/he should be able to get you through this without legal/tax surprises -- this isn't an unusual situation. Find someone who is recommended as being one who explains things well to clients.
posted by winston at 8:43 PM on April 2, 2006