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Homie, Home Buyer in Gables At Preston, P...

I'm thingking of purchasing a home for my son in cash. Half of the funds will come from my account and half from his aunt. is that gona be a?

Asked by Homie, Gables At Preston, Plano, TX Thu Apr 26, 2012

problem?

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15
As the other agents stated, cash isn't an issue when there is no loan involved. If the cash is coming from the out of the states or other accounts there may be some delay in the transfers or liquidating so you will want to plan accordingly.

Real estate attorneys are advised because they would ask you the though questions to insure the peace is kept in the family in the event something goes sideways. Who owns the houses, what is your son's roll in the home, will there be a note and deed of trust between your son, and the family members, if it were to be sold later who gets the money and if equity how will that be split, or if no equity how will that be absorbed, who will be responsible for property taxes and maintenance? Just to name a few.

Getting these things in writing now verse later is always advisable.

Your son is very lucky to have such trusting and loving family members to help him buy a home.
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Thu Apr 26, 2012
It should be no problem but be prepared to provide either bank statements showing proof of funds or a letter from your Branch manager saying you have sufficient funds to close the escrow especially if the home you are buying is a short sale or Bank owned property.
1 vote Thank Flag Link Thu Apr 26, 2012
There woukd need to be a proper paper trail indicating that the funds will be a gift if there was going to be any type of loan.

Jim Mauldwin
Intero Real Estate
408-863-3010
DRE # 01125380 since 1991
1 vote Thank Flag Link Thu Apr 26, 2012
Suzanne is correct this will not be an issue, the only little point I might add is that should make sure that it is liquid and there will not be any "holds" or waiting when transfering funds. This is not a big deal it just could be a bump in the road.
At your service,
Allyson
408-705-6578
allyson@homesbyallyson.com
Certified Distressed Property Expert
1 vote Thank Flag Link Thu Apr 26, 2012
Not at all, the only time gifts of money to buy a home becomes an issue is when you are obtaining a mortgage for the home. Since you are paying in cash, there will be no issue whatsoever.
1 vote Thank Flag Link Thu Apr 26, 2012
Please don't forget that some sellers (banks) have seasoning requirements for the funds. In other words, the funds have to be in the account that will be used to fund the purchase for at least 60 days.

So, gift the money early to avoid any issues with seasoning. If you don't, then you have to identify the sources of the fund by Gift letters and establishing relationships.

Good luck.
0 votes Thank Flag Link Wed Jun 20, 2012
If you are paying cash I guess the question is whose name is going to be on the deed. If his name is on the deed to the property it is his to do what he chooses to do with it. If you expect him to pay you and his aunt back I suggest you have documents and an amortization schedule drawn up and signed at the Act of Sale since basically you are doing owner financing. The title company can have this recorded with the Act of Sale. The best thing to do is get legal advice if you are not sure of the process.
0 votes Thank Flag Link Mon Jun 4, 2012
Hi Homie:

As long as there a Paper Trail of Legitimate Funds from US Banks, there should be
no issue at the Title Company.

Have a great weekend.

P Mistry

http://ruthandperry.com/ForeclosureHomeForSale
0 votes Thank Flag Link Fri Apr 27, 2012
I agree with the others that buying with cash furnished by you and his aunt is not a problem. You will have to prove to the seller the the cash is available so get ready to furnish copies of bank statements or whatever paperwork is necessary.

Ownership structure is also important. Since half of the purchase money is coming from you and half from his aunt, who will own the property? Make sure that you and his aunt have thought everything through completely. Seek professional advice as needed for legal, accounting and, of course, real estate advice.
Web Reference: http://www.johnjuarez.com
0 votes Thank Flag Link Thu Apr 26, 2012
Good for you...and your son!

This should not be a problem in terms of purchasing.
However, you need to check with the CPA on gift taxes, and with a real estate attorney about
title holding - because there are different types of title holding, and some might be more suitable than others in your situation. Also, estate advisor could help you in terms how to structure the funding - whether it is better to use your pension funds, IRAs or 401K, or a combination.

Finding the best way first is the way to go - and you are on your way by asking questions!

Best of luck,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Thu Apr 26, 2012
As Barbara mentioned when the offer is written, we need to attach a copy of the bank statements from you and the aunt showing you have the cash to complete the deal. The only question I have is your son buying and home and you're providing the cash or are you buying the home with your cash where your son is an occupant? If you wish to contact me, we can talk about the difference. The bigger issue will be the home search, preview and contract procedures. I notice you state you're from TX buying in San Jose. If your son is in San Jose, he can take care of searching for and looking at homes. It's also very important someone from the buying side in around during the home inspection. It's better to hear from the inspector first hand about what's going on with the home. About the contracts, depending on who the seller is, they may require actual signatures on the initial contract.

You should also know the real estate market here is crazy. Paying cash is a nice option but your success is more about your price range and flexibility in your housing options than paying cash.

What's nice is I, like most Realtors can help you no matter where you live.
Contact me if you'd like my assistance.

David Sciplin
Coldwell Banker Residential Brokerage
david.sciplin@cbnorcal.com
408-647-6326
DRE# 01477066
Web Reference: http://www.davidsciplin.com
0 votes Thank Flag Link Thu Apr 26, 2012
If you are paying cash for the full amount of the purchase price then their should be no problems. I would talk to your Realtor, if you have one, and they can help you with all the questions you will have about the transaction. If you don't have an agent then I would choose one to work with before you proceed with any purchase. It is very important to be well informed when purchasing a home.
0 votes Thank Flag Link Thu Apr 26, 2012
There would be no problem if you are buying cash. Are you giving your son a gift? Does your son aunt giving him a gift?
Web Reference: http://www.homenet123.com
0 votes Thank Flag Link Thu Apr 26, 2012
Hey Homie,

With an all cash offer, no problem at all. If the cash you are using will be used as downpayment and all the downpayment will be coming from you and his aunt, then he probably will not approved for a conventional loan. With FHA he can get approved.

Hope this helps
0 votes Thank Flag Link Thu Apr 26, 2012
Thank you,

Suzanne said it best. This is not a problem, uness a mortgage is involved.

My question is whether or not the money from his aunt is really considered a gift or a loan.

Also, is the money from you considered a gift, or a loan?

You may consider whether you want to have the documents drawn up to have some or all of this money as a loan or whether or not you should have some ownership interest, and whether or not you and the aunt should also be on title with your son.

I recommend that you talk with a Real Estate Attorney and a Certified Public Accountant with respect to these issues, alothough there is no requirement that you do so..

When you consider the amount of money involved, the advice from a Real Estate Attorney and a Certified Public Accountant is cheap, in comparison.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
0 votes Thank Flag Link Thu Apr 26, 2012
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