Buying A Home From Your Parents: How to Do It the Right Way

Buying a home from your parents is a great way to get into the house of your dreams, without jumping through the hoops involved in a traditional home loan and mortgage process. If you’re interested in purchasing your parents’ home – regardless of whether or not they still live in it – here are the steps you’ll have to follow for a straightforward and enjoyable process.

1. Talk it over with the homeowners

If you haven’t brought up the idea with your parents yet, now is the time to do it. Maybe your folks have been considering downsizing to a smaller place, or maybe they’re simply interested in selling the home and getting something new.

Maybe it’s never occurred to them to sell the home! Whatever the case may be, talking about the potential home sale is the first step in making it happen.

For best results, have this conversation at a time when everyone is well-rested and not rushed, since it may take some time to hammer out the details.

2. Come up with a down payment…and put it in writing

Buying your parent’s home does require an exchange of money, and developing a plan for the down payment is critical. There are many ways to structure a down payment when you’re buying a home from your parents. If they can give you part of the cash and “hold the paper” on the sale, that’s great.

You may also be able to purchase the home based on its equity or provide a small or nonexistent down payment. Talk to a financial expert to find out which approach is right for you.  Once you’ve determined the best option, put it in writing and have it notarized.

3. Get a mortgage

The next step is applying for and getting a mortgage. This step can take some time, so be sure you’re accounting for an ample timeline on the purchasing process.

4. See a real estate attorney

Exchanging money within a family can sometimes get a little messy. It’s a good idea to consult a real estate attorney to ensure everything goes off without a hitch. In addition to helping you establish a payment timeline and develop titles and deeds, a real estate attorney can also assist in structuring the sale itself.

The legal representation is critical for people who intend to buy the home while their parents are still living in it, or who are offering little or no down payment.

5. Set a purchase date

Now comes the final step – buying a home! To finish the process off, set a time to sign the papers and make your parents’ home your own!

Buying A Home From Your Parents: A Smart Path to Home Ownership

If you’ve ever considered buying a home from your parents, now is a very good time to make it happen. By following the steps laid out in this article, you can streamline the process to be easy and affordable for everyone involved.