Buying a house from family member

lanciadub

Hi all, am looking at buying the family home from relations and the proceeds will, be split between them,
I was just wondering what processes if any are different from a normal house purchase, for example we won't need an estate agent so ill, be factoring in these savings , is there any other advantages or maybe disadvantages anyone can think of?
Thanks

skooterblue2

1. get your own lawyer
2. they are all going to fall out over their share of the money.
3. There will always be moaners .... "can I get my share under the table", "Why is tommy getting the house at a cheap price?", Money always brings out the worst in people!

cruizer101

The issue is valuing the property you will want to pay as little as you can they will want as much as they can, particularly because there is a few of them so at least one will push for more.
You can get valuations done but they will vary. Ideally you might agree to get 2 or 3 valuations done and agree to buy/sell at the average but that gets harder the bigger the difference between them.
It sound like a good idea but could well lead to a lot of stress.

JustMe,K

Are you planning to pay the full value or less?

skooterblue2

I think this is going to end badly. Not in terms of the house but there is always one family member wanting a bigger share or "Auntie May said she was willing that house to me". I would say buy a less "complex" house.

lanciadub

cruizer101 wrote: »

The issue is valuing the property you will want to pay as little as you can they will want as much as they can, particularly because there is a few of them so at least one will push for more.
You can get valuations done but they will vary. Ideally you might agree to get 2 or 3 valuations done and agree to buy/sell at the average but that gets harder the bigger the difference between them.
It sound like a good idea but could well lead to a lot of stress.

Yes, unless everybody is in full, agreement it won't haooen, it'll be fairly close ro market value but afaik the cutoff for inheritance tax is 320k, house is worth aboit 330 or 340, so after 320 tax is paid at 33%, taking away the savings of estate agents etc it might be worth it them to take the hit of the 10k or so also less hassle for them, viewings etc , it'll be divided between 5

lanciadub

skooterblue2 wrote: »

1. get your own lawyer
2. they are all going to fall out over their share of the money.
3. There will always be moaners .... "can I get my share under the table", "Why is tommy getting the house at a cheap price?", Money always brings out the worst in people!

Yeh, defo gettin own solicitor

Proceeds are being split evenly 5 ways, so should be no arguments, only down to final figure.

Not neccesarally getting house cheaper than open market and no one else in family is interested in buyin it

lanciadub

kcdiom wrote: »

Are you planning to pay the full value or less?

Close enough to full value, taking in to account of inheritance tax after 320k it'll be a balancing act, give or take 10k

skooterblue2

lanciadub wrote: »

Not neccesarally getting house cheaper than open market and no one else in family is interested in buyin it

No I mean as there is always another cousin/brother with an axe to grind. For the sake of stirring the pot, they will say they could have gotten 240k when the auctioneer said consistently it was only valued in line with area prices at 230k.

cruizer101

Inheritance tax is on anything above 310k for parent to child, but that is 310k for each child so unless there is a lot of other stuff in the parents estate won't be anywhere near limit if splitting 5 ways.
5 is lot of people to have a say especially when you include spouses.
Not saying you can't do it and all be happy but it could be troublesome and unless there is particular reason you want to buy that house ( can understand if its family home and you have strong ties to it ) you may be better off just buying a different similar house.

JustMe,K

If the house is worth 330-340k, the most you are realistically saving on the estate agents fee is about 6k. I would be cautious of this whole thing and ensure that everyone is on the same page from the beginning. It *should* be a straightforward enough process but it all depends on the relationship between yourself and the 5 other people, and the 5 people themselves without your involvement.

Even if you are not mortgaging the house, do not bypass surveys by any means. As has been said, use your own solicitor. Is there anyone living in the house? If there is that is potentially a whole other complication as clearly you would them out for completion date.

skooterblue2

cruizer101 wrote: »

....................... you may be better off just buying a different similar house.

+1

lanciadub

Thanks
Relationship is good between all parties and all monies are being split 5 ways, no arguments, it's just a matter of agreeing on a price, valuer goin in tomorrow, everybody would like to see the house stay in the family, shoukd be just a matter of agreeing a price everyone's happy with

monday monday

just my tuppence..

I bought my dads family home 4 years ago. it had been lying idle for 3 years and had to be completely gutted and renovated. the money was being split 10 ways. the only problem I encountered was that I was buying the house 20k below the valuation. AIB saw this 20k as a gift and they wanted me to get all 10 people to sign something that they wouldn't come looking for this money.

Regarding the family, there was a family dinner and there was some heated discussion as to the price they would sell it to me. thankfully I wasn't at this dinner. it all worked out in the end.

lanciadub

monday monday wrote: »

just my tuppence..

I bought my dads family home 4 years ago. it had been lying idle for 3 years and had to be completely gutted and renovated. the money was being split 10 ways. the only problem I encountered was that I was buying the house 20k below the valuation. AIB saw this 20k as a gift and they wanted me to get all 10 people to sign something that they wouldn't come looking for this money.

Regarding the family, there was a family dinner and there was some heated discussion as to the price they would sell it to me. thankfully I wasn't at this dinner. it all worked out in the end.

Excellent, glad it all worked out and gives me a bit of hope

Edgware

Get three valuations. If all agreed total the valuations and divide by three to get average. Deduct your share and sell. People will want the money rather than hanging on and think they might make a few extra thousand by using an estate agent who will have a cut anyway

Dolbhad

I would say get more than one valuation. If your getting a mortgage your bank will value it any way. Are you familiar with the condition of the house? On your families side it’s all about a fair price in what they want/think. If I was buying I’d want an engineer out here Asap to do a report and see how the condition is. You can go back to a private seller who you don’t know and re negotiate if engineer’s report reveals issues - may be harder to do that with family.

Also you should get a solicitor on board now and your family appoint one also. Is this a house previously owed by someone who had passed away? If so a grant of probate would have been taken our requiring a CA24 to be filed and a valuation of property would have been done for it. If that’s the case, you should see what valuation amount was and when it was dated. As far as I am aware if property increased in value sunscreen grant of probate, there could be CGT on their side also.