Buying a home is hard, but if you want to learn how to buy a home from a family member, you’re entering truly treacherous territory. Because, let’s face it, we’ve all been to family dinners where a seemingly benign issue can instantly turn into a blood feud. And when it comes to real estate—usually the largest asset most people have—there’s a lot at stake financially.
Buying a home from a family member might seem deceptively easy at first glance. You know where they live, so you may think there’s little risk of getting swindled, and maybe they’ll even cut you a deal. The biggest pitfall, however, is thinking you can skip important steps in the home-buying process because you’re on the same family tree.
In the interest of keeping future holidays merry, leave nothing to kinship alone and follow these steps.
Have a family meeting
Difficulty can easily occur when a homeowner and a potential buyer in the same family agree to a sale but keep it to themselves until the deal is in motion.
“Two or more people often come to an agreement about a piece of real estate only to have their ideas ruined by someone who wasn’t kept in the loop,” says Seth Lejeune, a real estate agent at Berkshire Hathaway HomeServices, in Malvern, PA.
The biggest issue occurs if someone secretly promises a house to a family member and then dies. Or maybe you want to buy your aunt’s house—but so does your sister. As soon as the idea of a potential interfamily sale crops up, notify every person affected and come to an agreement.
Work with a real estate agent
Doing a home sale transaction without an agent may seem like a great way to save money and, hey, you’re among family, right? But go it alone, and it’s most likely the fastest route to headaches and confusion. An agent can not only represent both sides of the transaction fairly, but also keep an emotional distance.