Has anyone here bought a home from a parent?

I'll give you a brief explanation:
My dad is almost 80 and not in good health. I am one of 4 children and my DH and I want to buy his house.
He's offering the house to us at 25% off market value as our share of the inheritance.
Although the 25% off would help us A LOT, it's not fair to the other 3 children since he could, technically, spend all the remaining money and they get nothing after his death. My father refuses to accept full market value (I'm wondering if there's an alterior motive going on here).
Has anyone been in a similar situation and if so, how did you resolve it?
Any advice would be great!!
TIA!

Re: Has anyone here bought a home from a parent?

We bought DH's parents house for fair market value. My only advice is to talk to your siblings about it and make sure they are ok with it. Also, get an inspection, we didn't since ILs thought they knew everything that was wrong with the house and it's been a nightmare since the code has changed a lot since they bought the house nearly 40 years ago.

Re: Has anyone here bought a home from a parent?

Re: Has anyone here bought a home from a parent?

That's a tough one - $$ does strange things to people.

What if you took the other 25% and split it between the siblings yourself - don't even get your dad involved. Would that work??

Re: Has anyone here bought a home from a parent?

sticky situation, I would definitely speak with your siblings, or ask for their inheritance ot be givent o them NOW as well so your father can watch his family enjoy their inheritance rather than be money given out of a result of his death.
I think everyone gets equal, if not the others may feel resentment towards you. Good luck Make sure nothing is said or done behind the others' backs, I think this causes more problems and is so horrible

Re: Has anyone here bought a home from a parent?

Posted by emilain

sticky situation, I would definitely speak with your siblings, or ask for their inheritance ot be givent o them NOW as well so your father can watch his family enjoy their inheritance rather than be money given out of a result of his death.
I think everyone gets equal, if not the others may feel resentment towards you. Good luck Make sure nothing is said or done behind the others' backs, I think this causes more problems and is so horrible

Re: Has anyone here bought a home from a parent?

Posted by Ookpik

Posted by sarahsmommy

We bought DH's parents house for fair market value. My only advice is to talk to your siblings about it and make sure they are ok with it.

Thanks for answering!
This is the root of my problem...my siblings aren't ok with it. I don't blame them if they're angry my father wants to give us such a big break but we're willing to pay market value. I've thrown some suggestions around to my dad (things like split to profit 5 ways at 20% each, etc. to be fair) but nothing is being well-received.
Does your DH have siblings and did they have any issues?
We'll definitely get an inspection!!

Re: Has anyone here bought a home from a parent?

I would normally say do not buy it. It is not worth the conflict within the family, and I see their point. Would you buy the house for market value?

What if your father stays in the home, and you care for him? Then the money isn't really being "given," because you would be helping him a tremendous amount. Hiring an aide would be a much better quality of life than him living in a nursing home.

Re: Has anyone here bought a home from a parent?

Yikes--I'm so sorry that happened Cathy!! I really think this type of thing brings out the absolute worst in families!
The problem with having my dad living there is he's a severe alcoholic, amongst other things. I definitely wouldn't feel safe with him living there-especially with my daughter around.
It really is stinky because the house is huge, on an acre in a great community. He's offering us a great price for it but it's causing such a problem. We're thinking of backing out but when I told my father I wanted to since it was causing problems, he wouldn't accept that. I think he's geuinely excited about going to a senior community and only wants to sell the house to family.

Re: Has anyone here bought a home from a parent?

Like everyone said & it seems it has already started you might want to sit down, you, your siblings & your dad and discuss this maybe they will see it differently. It isn't like you are getting the house for free he is selling it to you. If you get hte house i am assuming that you are agreeing to get less than your siblings if your father should have anything left should he pass away.

This was an issue with my mom & her siblings but it was a little bit different. My aunt bought a house when she moved which had an apartment so my grandparents could live there. My grandparents gave my aunt a decent amount toward the downpayment. There was a big discussion because when she sold her house after a divorce she didn't give the money back to my grandparents. My mom & my aunt had a huge discussion with their parents & my other aunt & they finally decided that the money she got from teh sale was part of her inheritance and that she would get a reduction in her inheritance if & when the time comes. It ended up working out find and didn't create a big deal but I remember it being a problem at first. It is all about everyone getting equally & unless that happens nobody will be happy.


Is there any other sibling that wants the house or do they all own their own homes already?

Re: Has anyone here bought a home from a parent?

Re: Has anyone here bought a home from a parent?

If your father is in his 80's & is considering selling the house at 25% less market value, I would suggest consulting an elder care attorney.

My grandmother was just put into a nursing home. Her home was put into a trust so that it doesn't sell until she passes away. Medicaid/Medicare can't touch the house.

There are numerous issues you can face with this. With Medicare/Medicad try to go after it during their "lookback period"? If he needs to go into a nursing home, who will pay for it? Is it more beneficial for him to "gift" you the house each year if he's planning on living it with you? He can leave you the house - and you inherit at market value - he wouldn't have to pay capitol gains (not sure how much the hosue is worth, he may not have to pay at all).

In addition to the family, there are other issues you need to address (mainly the care of your dad). An attorney can help you out with that & it's the perfect reason to ask your dad to get his wishes down in writing.

eta. Honestly, your dad can leave his entire estate to you. Inheritance issues bring out the worst in people. If it's an area you love & you want the house, I would buy it. You're going to have issues with your siblings regardless of the house. How would you feel if you opted out of the house because of this & one of your siblings bought it?

Message edited 3/26/2006 8:11:14 PM.

Re: Has anyone here bought a home from a parent?

I have not bought a house from a parent, but have been through the distribution of the estate with my siblings. I would recommend that if you are going to buy the house, insist that you buy it at market value or you won't buy it.

As other people have said, $ does strange things to people and things that are minor disagreements have a tendency to remain in your mind for a long time after the estate has been settled. If your siblings are already telling you they have a problem with it, I imagine they are saying even worse things when you are not around. If they feel things are unfair, they will hold a grudge. The other thing to consider is that they all have an emotional tie to the house, and they might just be having a problem with your dad selling it at all, and you are the easiest target for their frustration, anger or disappointment.

Re: Has anyone here bought a home from a parent?

Thank you everyone for your advice!
Your feedback is excellent...we're definitely at a crossroad about this. Feelings of resentment, anger have already been directed at me unfairly. I think the suggestion to seek out an elder care attorney is great! I'm concerned about the house being taken away if he needs nursing home care...
Thanks again!!

Re: Has anyone here bought a home from a parent?

My MIL offered to sell her house to us, for less than market value. It was tempting, b/c it is a bigger house than we could have afforded otherwise, but we saw that there could be too many strings attached - like my BIL would want to live with us (he was 17 at the time), and my MIL would want to stay with us when visting from Florida. We never wanted my BIL to feel he had been left out, even though he never voiced concern over that, but he was also too young to maybe see it that way.

In the end, we decided against it, b/c it would just come with too many strings attached and we could see problems down the road.

Re: Has anyone here bought a home from a parent?

Re: Has anyone here bought a home from a parent?

Re: Has anyone here bought a home from a parent?

What if you bought it under fair market value and then refi and give the proceeds evenly divided among the siblings? Minus applicable taxes, etc. Definitely needs to be done with an atty and you also want a clause that they can not expect proceeds in the future.

Re: Has anyone here bought a home from a parent?

Both my parents have passed away. We took the fair market value at the time of death, took off what was left of the mortgage that I was paying, and then split it in half the value of the house. ( It is just me and my sister.) I then " bought her out" of her half of the house. We then paid off the balance of the house, which was not much, and then refiananced and put me and DH name on the house. Hope this helps.
Hugs to you , this can be a stressful time.

Message edited 3/27/2006 3:47:32 PM.