Buying a Home From Family and Friends

Sure you love them. Maybe you have known them your whole life. However when buying a home you still have to do it by the book. A home is your biggest financial investment you will probably make in your whole life. You want to make a sound investment. You want to protect your family. So just because you are buying a home from family or a friend does not mean you should not follow the right buying steps.

1.) Always get a home inspection – this is a major. You need to be aware of the issues. If you know about them and do not want to act on them because they are family or friends then that is your problems. You just do not want to be screwed and inherit a money pit from a family member who “was giving you a great deal”. I had a young lady who bought this home from her brother. She didn’t have a home inspection done. She didn’t know better, but the basement walls were buckling. It was a major structural issue. Her brother sold her the house at fair market value. Because of the basement issues the house would sell way below market value. Her brother took her for a ride.

2.) Always go through a title company. Yes you may have enough cash and they will just do a quick claim deed to you. DO NOT DO IT. What happens if your dear sister has a tax lien against the house from not paying Uncle Sam. What happens if your best friend was notorious for not paying contractors. There may be $20,000 worth of construction liens against the house. You bought it without a title company, you now own a house that can’t be sold without paying those liens off. It is a dumb move to buy a home without a title company involved. A title company will only transfer title to a new buyer if the title is clean. So use a title company.

So follow the normal buying steps. Sure your brother, cousin or aunt may be a very nice person but the sale of a home is too big to just trust somebody. There should be no problem having a home inspection done or using a title company if there are no hidden issues. If they are trying to talk you out of doing either of these two things that is a major red flag. It’s not that you don’t trust them. It’s too protect your family and your money.