Purchasing from family can cause friction between relatives from the early stages of negotiation until well into home occupancy. Jealousy from other relatives, buyer remorse and resentment are just a few of the issues that may wreak havoc on family relationships. While these are all common downsides of business transactions, it's important to remember when doing business with family that the business relationship often carries over into personal relationships. If you're considering doing business with family, make sure both parties are aware of these potential pitfalls and understand the risks before entering into a purchase agreement.
Now that you have a clear understanding of the benefits and risks of buying a home from a family member, here are a few tips when buying from a family member:
Ensure mortgages are current If the home is still financed, be sure that the mortgage payments are in good standing. The last thing you want is a lien put on the home when you are trying to purchase it.
Seek legal advice Make sure you have a lawyer look over all of the paperwork, including the offer, any counter offers and your purchase agreement. They will likely catch something you or your Realtor may have missed, and make certain the appropriate verbiage is in your contract to protect your property investment.
Once you've covered all of your bases, including understanding the risks, benefits and best practices for purchasing a home from a family member, you can be well on your way to entering into an agreement that meets both you and your family's needs.
Use a REALTOR® Many realtors are experienced in dealing with sales between family members. If this is the first time you are buying from a relative, your Realtor will be able to ask and answer the right questions for you to make sure your sale goes smoothly.
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