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I did a little bit of searching on the forms and found a thread that was a bit similar.
Short story: my wife's grandmother is moving into a retirement home and is planning to sell her condo that has an HOA (she owns it outright and has lived in it for nearly 50 years) . My wife and I are currently house hunting and have talked about purchasing this condo from her and have talked to her family about it and everyone is happy about the prospect. We are planning to pay full market value for the condo and are NOT looking for any gifting/family-loan/deals to be made.
We are wondering if we could go through this process WITHOUT a Real Estate Agent (for both sides)? We would definitely go through a real estate attorney, get a proper appraisal, inspection, everything in writing, etc.
We're looking for pro's and con's for doing so. Has anyone every done this before? Any tips/suggestions? We live in WA, are there any state laws to watch out for?
Appreciate any feedback!
Last edited by mike62pp3; 02-10-2014 at 03:30 PM..
Go through a real estate lawyer. Or find a broker who will do the deal for 1% or so.There is no law saying you need real estate agent representation. The only reason buyers and sellers need agents is because they don't know each other and people get emotional on a home sale/purchase to the point that no deal would be made because everyone reverts back to being a 5 year old. And that goes for buyer or seller alike. The slightest thing will set off tantrums. So RE agents are there to baby the buyers and sellers through the process. So most people need a agent to represent them
I did a little bit of searching on the forms and found a thread that was a bit similar.
Short story: my wife's grandmother is moving into a retirement home and is planning to sell her condo that has an HOA (she owns it outright and has lived in it for nearly 50 years) . My wife and I are currently house hunting and have talked about purchasing this condo from her and have talked to her family about it and everyone is happy about the prospect. We are planning to pay full market value for the condo and are NOT looking for any gifting/family-loan/deals to be made.
We are wondering if we could go through this process WITHOUT a Real Estate Agent (for both sides)? We would definitely go through a real estate attorney, get a proper appraisal, inspection, everything in writing, etc.
We're looking for pro's and con's for doing so. Has anyone every done this before? Any tips/suggestions? We live in WA, are there any state laws to watch out for?
Appreciate any feedback!
You don't need a REA, that would just cost someone $$ that doesn't need to be spent.
I've done it 2x years ago, and it's hassle free.
I understand you aren't looking for any "deals" to be made in your favor, but what if they favored the grandmother? She's going to have to pay capital gains taxes on the difference between what she bought the condo for 50 years ago and what she is selling it for today. She could sell it to you for less than what she would to a stranger and hold a mortgage for you at the going interest rate that you'd get on your loan. Less taxes for her to have to pay and a steady monthly income for her.
Absolutely go through a real estate attorney. You're doing all the right things by getting an appraisal -- as long as everyone is in agreement on the price, this is going to be a relatively simple transaction.
Sawdustmaker makes a good point with regards to exploring the question of whether your grandmother would like to take back a mortgage in order to create an income stream. Part of me thinks that's a great idea -- another part of me likes to keep finance out of the family arena. Your relationship with your family and your own sense of credit responsibility will play a major part in this aspect.
You don't need a REA, that would just cost someone $$ that doesn't need to be spent.
I've done it 2x years ago, and it's hassle free.
I understand you aren't looking for any "deals" to be made in your favor, but what if they favored the grandmother? She's going to have to pay capital gains taxes on the difference between what she bought the condo for 50 years ago and what she is selling it for today. She could sell it to you for less than what she would to a stranger and hold a mortgage for you at the going interest rate that you'd get on your loan. Less taxes for her to have to pay and a steady monthly income for her.
Did the government get rid of the 250 single 500 married exemption? And was the house investment or due the Grandma live in the house/primary residence? Two in the last 5 years of ownership right? If primary residence up to 250 if single is exempt. Hell maybe that changed this year
There would be virtually no benefit in hiring a real estate agent (and I'm a broker). Get a good real estate attorney to handle the closing for you.
If everyone agrees on the price, and the market value is readily verifiable, I'd go with that. Otherwise, get an appraisal to establish the sales price. If you're financing, you'll need one anyway. I would avoid owner financing. No sense complicating family life if the loan would become part of her estate. Get your own financing now and you'll be better off in the long run.
Quote:
Originally Posted by Sawdustmaker
She's going to have to pay capital gains taxes on the difference between what she bought the condo for 50 years ago and what she is selling it for today.
No. This was her principal residence and the federal exemption still applies.
Quote:
Originally Posted by Electrician4you
She could simply add you to the deed.
I'm not sure exactly what you mean by that...but, in any case, that sounds like a bad idea. They should treat this as an arms-length transaction and not a family "deal".
Jack
What I meant is she could add. OP to the deed and the house is now In his name. Quit claim deed. This would involve a registration with county registrar and then he could set up a private payment for the house. But yeah it's best to keep arms length but can something like that be a option? Granted the worse thing to do is to make family deals.
Thanks for everyone's tips so far! I agree with Jack in treating this as an arms-length transaction. I'm pretty confident that we won't be going through a REA but instead going through an RE attorney and getting an appraisal. However, I think my wife's family would still wants to go through an REA on their side.
Just out of curiosity, and for my own knowledge, what are the benefits of going through a REA? I know they bring their knowledge of the market and ensure that you are finding the right home up to code, but is convenience all you're paying for?
Quote:
Originally Posted by Sawdustmaker
You don't need a REA, that would just cost someone $$ that doesn't need to be spent.
I've done it 2x years ago, and it's hassle free.
What was the process like in your situation?
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