Home Buying in Alexandria>Question Details

oct1875, Home Buyer in Daly City, CA

Buying a house under market value from a relative...

Asked by oct1875, Daly City, CA Tue Jun 24, 2014

Hello. My wife and I are renting a house from her sister. My inlaws bought the house in June 2012 for $560,000. (House is now worth $700,00-$725,000) We want to purchase the house for the agreed price of $580,000. I'm using my VA loan. What obstacle will i run into to make this purchase. Thank you in advance.

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If you're already approved for your loan, the biggest potential obstacle I can see is seller's remorse for leaving so much equity on the table. Because your in-laws are giving you such a great deal, I wouldn't ask them to cover any costs associated with the sale, such as the VA funding fee, closing costs, etc.

Make sure you have all the terms of the sale in writing and signed by the parties. You may even include an addendum that states that the seller understands and agrees they are selling the property below current market value and that the seller has no expectation of recovering any equity.

Although you've been living in the property, you'll want to have inspections completed. I wouldn't ask for any repairs whatsoever. Inspections are simply for your knowledge.

Check with your tax Assessor's office to see if there are any tax benefits available to you for a family transfer of a property.
0 votes Thank Flag Link Sat Aug 2, 2014
Do you still need assistance with your purchase? Let me know as i am available to assist in your real estate needs.

You may run into obstacles such the in laws not wanting to sell their home at the price of $580,000 but if everything is writing with everyone in agreeance, it shouldn't be unlike a typical standard sale. Of course, you need to meet your financial criteria and eligibility requirements.

Let me know if i can help
0 votes Thank Flag Link Sat Aug 2, 2014
My best advice would be to contact a local lender and a real estate attorney; the attorney can draw up the contract, conduct the title search, etc. while a lender can help you with your mortgage requirements. The lender will require an appraisal, but as long as the property appraises for the sales price, which sounds to be no problem, you will be fine. If it appraises for a lot more, then it is to your benefit.
0 votes Thank Flag Link Wed Jun 25, 2014
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