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Thread: Buying my parents house?

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    #1

    Buying my parents house?

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    In 2001 my parents bought this house for around $320 I believe. Since my dad moved jobs to a different state 4 years ago the house has periodically gone on the market with no success. I've lived here the whole time while going to school. Its a big house (2700sq ft, 4 bedrooms), and I've been desperate to get my own little apartment closer to downtown. Now I've graduated and got a full time well paying job I finally told my parents I can't do this anymore (manage the house, deal with horrible renters who can't keep the house clean and the stress of always trying to keep the house presentable for buyers who don't want to buy anyways cus the kitchen is outdated and the house needs a little TLC).

    Yesterday I found my dream apartment. Its $760 a month. I called to tell my mom, and she basically started crying saying how she wished I would stay in the house. I currently agreed to pay them just $450 a month plus my share of utilities. I agreed to take on only one roommate this time, who would also pay $450 a month. Even though combined, we're still contributing less than half their mortgage, its enough to keep them afloat financially since they also have a mortgage and home in their new state. I guess the stress of not having me here to take care of the house (and trust me, its a lot of work) and potentially not having my income (regardless of how little) has just broken her. I hate making my mom cry like that, and I hate disappointing my parents. But I told her I wanted my own place, and I've been discussing it for months. She's always said that this financial burden was theirs and not mine, and if I wanted to move out and get my own place I could...

    DB suggested that I should try to buy the house from my parents. They currently have it on the market for just $218 so they're taking a huge pay cut but they are thisclose to foreclosing on it if it doesn't sell. I'm only 23. This seems like a huge responsibility for me, however financially I AM rather stable (full time nightshift RN). I thought about how I could buy it and take it as an investment, living here and possibly renting out a room to another nurse or professional. In the 2 years I have to stay here (hospital contract) I could do the house up, give it all that loving and all the upgrades it needs, so that when the market picks up I can sell it and possibly turn a small profit.

    Who do I go to? Our realtor? Do I have to have a downpayment (I just decided I wanted to try this so I really don't have any savings)? Since its between us, could I just go to a bank myself and apply for a home loan? How do I find the best loan provider for me? From those with experience, does this sound like a good plan in general, considering the market and such? I just want opinions and advice honestly.
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    #2
    if you can financially do this, then yes it is a good plan. as long as you think you can rent out.... the house is a bit on the expensive side... but if you dont think you can do it, then dont! help your parents find renters, if no one wants to buy...

    go to your bank, see if you are eligible for a loan first. (your advantage, there are very low interest rates right now) discuss it with a banker you trust, tell them you are buying from your parents, (but do not by any means skip on the legal portion because they are your parents). that is the first step, the banker will be able to give you good info on a loan and how it amortizes, etc....

    good luck!
    R.I.P. My Love, Everyone was supposed to come home together, I'm sorry you had to come home early
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    if there is a realtor involved YOU have to go thru the realtor- for a 200,000 dollar home you will need 20% down for a conventional loan- you might be able to go FHA as a first time home buyer but will still need 3.5% down and closing costs-
    you mortgage would be about 16-1800 a month depending on how much you put down.

    you will also need to be on the job for 2 yrs to be considered for a conventional or FHA loan.

    also look at the costs of redoing the house- the market has not bottomed out in every location and homes are still losing value, you could very well put in 20 grand and still LOSE when you need to sell in 2 yrs.

    also look at the monthly costs of lawn care, maintainance utilities ect- can you afford to pay 2,000 dollars a month or more if you cannot find a and keep a room mate?
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    Hm, that's a lot to consider. I did think about housing costs and that's what really scares me too to be honest. I mean, it's a lot of house. Electricity can get up to $300 - $400 a month for the summer, water is around $60... I don't know what homeowners association fees are, my parents currently pay a gardener but that's a luxury I'd probably skip out on. I didn't realize the mortgage would still be that high to be honest. I mean, even with a roommate, I don't think I could ask half. I could rent a room out for like $450 which would offset my costs although I'd still be paying the bulk of it.... Does the realtor always need those closing costs? He's a family friend and has honestly done nothing. That's why I was asking about loans. Couldn't my parents and I do it privately and skip the realtor? Saves both parties money but I'm not sure about all the legalities behind that. Not to mention when DB pcs's again in year and a half to 2 years I had been planning to go with him. I don't like the idea of being tied down like that. Seeing my parents struggle cus they can't sell has scarred me. Db just said to do it as an investment and to help my parents... He suggested I just hang onto it til the market picks up, but who knows when that'll be!
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    It seems to me as if you are unsure. I would not do it if there are doubts in your mind. I know you want to help your parents and to own a house at 23 is good. But without knowing exactly where you are, you might need more than one roommate to make the mortgage and bills. And than if you and your boyfriend go more serious (ie married) and him being military you will have to manage the house from far away if it doesn't sell when you are ready to move. I know many people do this but I can vouch from experience (my parents did) it is a lot harder than it sounds especially if you might be overseas and getting back if needed is harder to do.

    Think long and hard about this. And last piece of advice. If you do this, parents or not, make sure EVERYTHING is done legally. Do not skimp simply because they are your parents.
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    Quote Originally Posted by Reeses*Pieces View Post
    Hm, that's a lot to consider. I did think about housing costs and that's what really scares me too to be honest. I mean, it's a lot of house. Electricity can get up to $300 - $400 a month for the summer, water is around $60... I don't know what homeowners association fees are, my parents currently pay a gardener but that's a luxury I'd probably skip out on. I didn't realize the mortgage would still be that high to be honest. I mean, even with a roommate, I don't think I could ask half. I could rent a room out for like $450 which would offset my costs although I'd still be paying the bulk of it.... Does the realtor always need those closing costs? He's a family friend and has honestly done nothing. That's why I was asking about loans. Couldn't my parents and I do it privately and skip the realtor? Saves both parties money but I'm not sure about all the legalities behind that. Not to mention when DB pcs's again in year and a half to 2 years I had been planning to go with him. I don't like the idea of being tied down like that. Seeing my parents struggle cus they can't sell has scarred me. Db just said to do it as an investment and to help my parents... He suggested I just hang onto it til the market picks up, but who knows when that'll be!
    if your parents are under contract with a realtor they have to use him to contract a sale- and usually there is a clause that gives him rights even after the contract ends ( usually with in 60 days after the contract terminates) if he is a family friend e may be able to terminate the contract and allow your parents to sell with out the realtor fees.
    there are always closing costs- you can ask your parents to pay them for your, and in addition to closing costs are pre paids- these are things like your taxes and insurance you have to pay in advance for the yr.

    there are alot of costs to owning a home.
    our motgage, insurance and taxes are 1400 a month ( our home was 189,000 no money down VA) we pay an additional 600 a month just for living, that is internet, plhone, cable, trash, water electricity, not counting the 75 every three months for mole treatment, the cost of taking care of the lawn every week, mowing, edging planting, trimming trees, fertializing the grass 2 times a yr, ect.

    and what happens if you cannot sell in 2 yrs? will your parents help bail you out and buy the house back?
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    Quote Originally Posted by Reeses*Pieces View Post
    Hm, that's a lot to consider. I did think about housing costs and that's what really scares me too to be honest. I mean, it's a lot of house. Electricity can get up to $300 - $400 a month for the summer, water is around $60... I don't know what homeowners association fees are, my parents currently pay a gardener but that's a luxury I'd probably skip out on. I didn't realize the mortgage would still be that high to be honest. I mean, even with a roommate, I don't think I could ask half. I could rent a room out for like $450 which would offset my costs although I'd still be paying the bulk of it.... Does the realtor always need those closing costs? He's a family friend and has honestly done nothing. That's why I was asking about loans. Couldn't my parents and I do it privately and skip the realtor? Saves both parties money but I'm not sure about all the legalities behind that. Not to mention when DB pcs's again in year and a half to 2 years I had been planning to go with him. I don't like the idea of being tied down like that. Seeing my parents struggle cus they can't sell has scarred me. Db just said to do it as an investment and to help my parents... He suggested I just hang onto it til the market picks up, but who knows when that'll be!
    one more thing.... don't forget about property taxes, in some areas they can be a big deal....

    honestly a home is a good investment. my family owns a rental house and an apartment building, you can use it as a rental house, and then all of the fees and bills will fall on the renters... you have to make an assessment based on the area you live in. in some areas the market really has hit rockbottom, and the only way for the value of the house to go is up.

    also there will always be fees, your parents have their house listed with a realtor and there is an obligation there. because you said he is a family friend, he may be able to write up the paperwork for a lesser fee...

    first i think that you should go and see if you can even get a loan that large, some people are really struggling to get loans right now....
    R.I.P. My Love, Everyone was supposed to come home together, I'm sorry you had to come home early
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    hey everyone... thank you so much for your advice. It gave me some perspective on the other angles of the situation that I had thought about but not thoroughly thought THROUGH. So much has happened... I talked to my dad and he seemed to like it but didn't seem to want me to take on this responsibility. He even commented that my boyfriend was in the AF and that in a couple of years I'd probably want to move. My mom pretty much had the same reaction, and I honestly don't want to be a homeowner. yes, to some it can be a great investment, but I've seen my parents struggle for years simply because this house won't sell and it scares me that that could be ME in a couple of years. I talked to my mom today and laid down a few ground rules. She seemed mostly relieved that I wasn't moving out, but I told her that she and dad need to set a strict timeline. Rent due the 1st. It is ___ much. Electricity and water are ___ and due on this date.... I also told her that I've felt like I'm always in limbo. Waiting for this house to sell, waiting to show it, cleaning to show it, or waiting for it to not sell, but still not being able to make my space MY space. I told her that if I agree to stay, I need to know that I can stay for the 18 or 24 months I may want to stay in orlando. That my current roommate situation is mostly hurtful cus shes a friend gone awry however in terms of cleanliness shes not terrible. It was just terrible when I was the only one cleaning when a buyer was coming in 20 minutes. STRESS! I told her that my new apartment I'd found was wonderful and I was most excited about finally decorating and painting and finding my place. My HOME. i haven't had that since they moved to GA 4 years ago and left me in FL. I want to decorate and paint and put rugs until you can walk in and not hear an echo. Anyways, thanks for the advice again. <3 <3
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    #9
    have they thought about renovating the kitchen and trying to rent the entire house out? you could live in your dream apartment, they could get someone to manage the property, and everyone would be happy. Just an idea.

    here is a link to a show on hgtv that does just what i mentioned above to help people transform their houses/part of the house into an income property and then helps them market it. Income Property : Scott McGillivray : Home & Garden Television

    i dont know what the requirements are to being on the show but i know that if you have 2 mortgages they try really hard to get it fixed quickly and rented out for you. (you do have to pay for the renovations, FYI)
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    Yea, I had thought about that too. Thats kind of what I want to do now, but overall its a lot of money to put into the house now if its NOT my investment and i walk away from it in a year or 2, you know? I want to help my parents out, and I do by doing a lot of home improvement projects myself... I had suggested renting it out to a family, or to a group of students so I can move out but my mom seems scared to let it out of the family. She says that nobody is going to take care of the house as much as we will (I WILL). Yea, I take care of it, but its a lot of work for just me. Oh well, I'm staying at the house for now. My parents seem happy. I told them to take the house off the market so at least that stress is off my shoulders and I can work on the renovations over the next year or so that I HAVE to stay in this city at my own pace.

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