Ever bought a home from a friend/acquaintance?

[redheadbaker]

I had mentioned to the parent of one of DS' friends (the parent is friendly and both H and I get along well with him) that we were interested in buying a home in the town (we currently rent), but that homes rarely go up for sale here. He said his family was planning to sell their home after this school year ends. It's a nice house that meets most of what we want in a home (under 2k sq. ft, 2 bathrooms, etc.). 

Is buying a home from a friend/acquaintance a bad idea? Obviously this is all theoretical -- we don't know how much they'll be asking for it, whether we'll be ready to buy at the time, etc. 

[rosiebear]

I sold one to a friend and it worked out fine. If things had gone south for some reason, this particular person wasn’t so close a friend that we’d have felt pressured to cave in for the sake of the friendship.

My advice would be to communicate and do business through real estate professionals. I’d steer clear of a FSBO.

[litskispeciality]

I worked with a guy who sold his house to another co-worker. The house was flipped, so in theory you should know came with problems. My co-worker kept hearing about issues from the person who bought it. Not incredibly helpful, but I guess just make sure it's in good shape, or get a good inspection, so that you don't have awkwardness after the sale.

[bronxgirl]

My parents bought their apartment from my aunt and uncle. because they knew each other so well my parents knew all about the apartment, when updates were done, costs, etc. it went very well for them, but might have been different (but might not) if they weren't so close.

[madringal]

We bought our 1st home from a friend that we knew them both well and it was a great experience. 5 years later we sold it to one of my co workers and it was awful. Her fiancée was an absolute nightmare and actually committed fraud during the process. It was a whole mess.

[achi]

Are you considering it solely because the house meets your needs or is it to avoid realtor fees? I’ve seen it go well and seen it land in the crapper. It seems to depend in the reasonableness of both parties and their ability to understand it as a business transaction and leave any personal feelings out of it. I don’t know that I’d personally feel comfortable doing it without a realtor or someone else representing your interests who is neutral in the situation.

[Susie]

It seems like a fair number of particularly desirable properties in our town are selling before print, and I think it typically is an acquaintance situation vs. what I hear about in the NoVa area where properties are offered internally within a firm before being offered publicly.  I think there has been an uptick during covid because it's attractive to sellers to not have to host an open house or have multiple buyers in for showings at a time of relatively high risk.  

If it were the right property, I'd totally do it as a buyer, so long as the sellers were ok with me doing all the usual inspections/etc.  I'm not sure if I'd do it as a seller.  We sold last spring and honestly we just cleared out of the house for the one weekend we had showings, and then it was over.  The competition drove bids up significantly, so it was worth our while to offer it publicly.  Even if we had an acquaintance, we probably would have publicly listed it.  The delta between asking and contract price covered our REA's fees, and we had the benefit of her assistance through the transaction.

[macmars45]

With a realtor, sure I'd be happy to buy a house that fit my needs from a friend. Without a realtor, no.

ETA: I have never bought a house from anyone I know

[jamaicam]

I sold to an acquaintance - I mentioned when we were chatting at an event that I was thinking of selling in about a year and they called me about 9 months later to see if that was still the case. it worked very well for us - we both used lawyers (common here to use lawyers not real estate people) and were able to help each other out in the process too (they sold and had to move in with family so i stored some furniture for them for a few months ebfore closing, and then they renovated a bit and I had to move in with my parents while waiting for my new place to close and was able to leave some of my furniture behind until then).

[7costanza]

We bought our house from my in-laws. They never lived in it so didn’t have any emotional attachment but it was still tense at times. We didn’t use a realtor on either side but my H and I did consult an attorney to make sure it was all being handled appropriately. They gifted us a bunch of equity so it was a bit different than a straight sale at market value.

[elefun]

I agree with realtor. Communication can go through them.

I just had an acquaintance buy my house and did feel a little pressured to cave a little with them but I had an extra shitty scenario where we even had a dual agent (not intentionally). So the dual agent fucked me more than the acquaintance part.

[redheadbaker]

Jan 4, 2022 15:50:35 GMT -5 achi said:

Are you considering it solely because the house meets your needs or is it to avoid realtor fees?

Because it's exactly the type of house we're looking for.

[redheadbaker]

I totally forgot about the FSBO option. My question assumed we'd use realtors.

[verycontrary247]

We sold my townhouse to a friend of my inlaws. He wasn't actively looking when it hit the market and didn't have a realtor yet, so he ended up using ours.

Our realtor knocked a percent from the total commission since we "brought" the buyer.

They still got an inspection and we did their requested repairs.

All in all, it went very smoothly.

[tacokick]

I’d be fine doing it with realtors and since you don’t seem that close. I’d be prepared if things went weird that you may no longer be friends though. People are strange about houses! Remember the bathtub Mary!

My parents and their neighbors actually bought the house in between their houses from their neighbor together (so lot 1 & 3 bought lot 2) and it went fine. In their situation they had known the owners of lot 2 for years and decided to tear down the house and divide the lot up. Everyone won.

[ste]

We did. We went into it knowing they weren’t negotiating price and it was being sold as is. We did an inspection but were comfortable with the findings (and it was all things they’d told us in advance).

We used a lawyer for the paperwork. But we also live in a small town where everyone knows everyone and there isn’t much market (especially for what we wanted).

[krystee]

I actually don’t think you’d need a realtor if you get an appraisal and a real estate attorney. Once our offer was in, all contact went through the attorney, so if you feel comfortable getting an appraisal and basing the offer on that (which seems like a neutral way for them to price and you to offer, without adding emotion), they could then price it at appraisal minus half of the real estate agent fees, so you’re each saving a little bit.

[trissie18]

Jan 4, 2022 19:14:36 GMT -5 krystee said:

I actually don’t think you’d need a realtor if you get an appraisal and a real estate attorney. Once our offer was in, all contact went through the attorney, so if you feel comfortable getting an appraisal and basing the offer on that (which seems like a neutral way for them to price and you to offer, without adding emotion), they could then price it at appraisal minus half of the real estate agent fees, so you’re each saving a little bit.

This is what we are planning to do with our neighbor this summer. We bought the land our current house is built on from him and have first right of refusal on the 10 acres between us but we also want his house and pole barn as a rental and eventual retirement home for my parents so rather than deal with the hassle of listing, etc. we will get an independent appraisal and work everything through our lawyers.

[namasteak]

My mom sold her house to family friends and it was fine. It was sold to my sisters childhood BFF . We used 1 real estate agent and negotiated a 3% commission (vs 6%) which trickled down to the buyers on a lower purchase price.

Mom still made them do all the regular home purchase stuff (inspection etc) and didn’t negotiate much on repairs since she was already giving them a good deal.

[jinkies]

I don't know anyone who has used a real estate lawyer in PA. I'm sure they exist, but they aren't a standard part of transactions the way they are in some other states.

I know 3 different people who have bought homes in our neighborhood from acquaintances/family/straight fsbo in the past 3 years.

All of them used one realtor for the paperwork, and negotiated a single realtor fee.

They were all straightforward sales and all allowed inspection but were clear it was being sold as is.

[preppy]

We bought our current house from friends. We aren't super close with them but a group of friends my H played hockey with. They were flipping a house in town and had planned to use it as a summer rental then decided they didn't like owning a short term rental. We each hired our own lawyers and didn't use a realtor and we got a little off of market value since they saved the realtor fees. It went really well and so far, over a year out, we are all still friends.

[Captain Serious]

My husband bought a house from one of his best friends, who was also a coworker. It worked out fine. We were dating at the time, and it was a little weird at first, as we started redecorating, painting, etc., because they'd come over and see and comment on the changes (they had 4 kids, we had none, so we changed the kids rooms into adult bedrooms and an office). In the end, though, we made so many changes (including structural), that we all just felt like it was our home and not theirs. We ended up living there longer than they did.

We also bought our ski house from an acquaintance. I didn't know her very well, and she moved across the country, so there was no weirdness involved. That sale worked out wonderfully.

In each case, we used attorneys, but no realtors.

[artichokie]

This sounds like a terrible idea.

[redheadbaker]

Jan 6, 2022 11:47:18 GMT -5 artichokie said:

This sounds like a terrible idea.

Wow, that's so helpful. Why? Have you had a bad experience yourself? If so, what went wrong and do you think there was anything you could have done differently?

[dexteroni]

We bought my aunt's house from my mom and it went fine. In our case it was super informal because we knew the house and obviously the parties knew and trusted each other. We still did an inspection, but we had a real estate attorney walk us through the transaction and didn't use realtors.

In your case, I recommend using realtors and treating it like you would any other sale from a stranger. The advantage you're getting here is finding an off market house. But since these people sound like very informal acquaintances, I wouldn't be willing to cut any corners during the sale process itself.

[themoneytree]

We did and it was very, very tricky.
We let them pick the closing date but asked them to be sure about when they wanted once the contract was signed.

I think they felt that they had a lot of extra leeway because we were friends so they kept changing the closing date…. which was a major issue due to our mortgage lock expiring. We said no to the 3rd change and my friend got really upset. Then the tornado came through and took down the huge tree in the backyard a week after we were meant to have closed and a week before we were meant to close again.
My friend flipped out. It was like we had personally ordered the tornado to come.
Additionally there was a financial issue - they stopped paying their mortgage when Covid hit. These are VERY high earners with multiple high end vehicles and crazy high standard of living. They had owned the house for 14 years. Turns out the ‘refi’ I knew about was actually a second mortgage. They had to bring money to closing. It was bad and we didn’t know if we were going to close until we were at the closing table.

We talk again now, but it took a long time.
My advice is to have both sides use a realtor and/ or attorney.

Good luck! We love the house and it was worth it in the end, but not easy.