4 things to remember if you want to buy a home from a friend

Whether it's moving, buying a house or finding the best airfare for your next vacation, we all want to find an easier way to do whatever it is we're doing. As fun and adventurous as it is to go house hunting, many people would love for it to go a little quicker and be a little easier.

This is one reason why so many would love to be in a situation where a friend or a family member happens to be selling at the same time they are looking. After all, you probably know how the person treated their home, what issues it has and what they love about it. There will probably be fewer surprises in store, and you just saved yourself weeks, maybe months of searching. 

As great as the situation may sound, when buying a house from a friend or family member, you need to proceed with just as much caution as though you were buying it from a stranger. An important relationship is involved and you want to be sure you remain close well after the transaction is complete. These four tips can make sure both parties walk away happy.

  1. Decide on a fair price. Have an appraiser evaluate the home, as this is the best way to ensure both parties get a fair deal.
  2. Be nitpicky about financing. Just because you know the person and have a certain rapport or level of trust, don't skip any steps. Make sure you've been pre-approved for the right amount and all the paperwork is in order. Having the deal fall through because you didn't cross all the financial T's and dot all the I's could damage your relationship.
  3. Be sure to disclose the nature of your relationship to the lender. While it's highly unlikely you'll be denied a loan because you are friends with the seller, many mortgage applications do ask for this information and it's required by law.
  4. Make sure all the problems are taken care of. No matter how close you are, don't skip the home inspection stage. Remember, treat this transaction like a professional deal with a stranger. It may seem odd, but letting a crack in the foundation or a leaky faucet go because you're friends could end up doing serious damage to your relationship.

To learn more about the housing market in Cedar Rapids and how to get exactly what you want, contact a Coldwell Banker Hedges Realtor® today. With years of experience, they know the area and can help you find a fantastic home!  

Blog Archives