Parents would like to sell me their house below market value with monthly payments no interest is this legal.?

Question

I have 3 Siblings and have been living in the family home for 20 years. All of the upkeep have been provided by me my parents has agree to sell me the house for only $20,000. I have been searching hi/lo for some type of contract agreement for the 3 of us to sign. Is there any such agreement? I would like to protect myself from the other Siblings in case something happens to my parents. My parents lives in another home. For some reason both parent thought by giving me the home as a gift would not be fair to their other children, but since I have maintained the home for so many years my parents agree to do it this way because frankly the other 3 children can not afford it. Thanks.

Answer 1

its all legal ..if the house is payed off its there decision to sell the house how they feel.. and they can do owner financing(meaning you pay what yall agree too ) but to cover both of your butts . go to a lawyer explain the situation and have him draw up papers stating all you have agreed on........... now another way is if your good with wording you and your parents can draw up papers on your own taking them to a notary to sign them and make them legal but a lawyer is probably your safer bet

Answer 2

I didn't read the other responses, so I apologize if I'm being redundant.

Tread cautiously here, you could be setting yourself up for some serious tax implications if title is not conveyed correctly.  You are going to want to talk to an RE attorney on this.

Answer 3

Sure it's legal. I would visit a lawyer and have him draw up some papers stating the agreement and that should be all you need to do.

Answer 4

The deal may run afoul of the Internal Revenue Service.  They could say the difference between the $20,000 selling price and the actual value of the house was a gift.  If that amount is greater than $12,000 there could be a gift tax levied on it by the IRS.  Additionally, a no-interest loan will definitely get their attention and they could conclude that a portion of what you are paying your parents is interest and charge them taxes on it.

Answer 5

You know, you should see a real estate lawyer to draft an iron clad contract and make sure that title passes properly. It is definitely worth it to pay a little now rather than have some kind of huge fight with your siblings later on. Don't be penny wise and pound foolish. Get it done right, and don't go to office max for an off the rack contract. You want to buy new title insurance, have your deed recorded, and do it correctly. Also, you want to set up a mortgage agreement, if you have to pay over a certain amount of time--and you want to be sure that your parents give you the appropriate tax paperwork so you can claim any interest on your taxes. You want a HUD-1 record of the sale, too.

Answer 6

Your parents can sell you their home for whatever price the three of you can agree on.  You could obtain your own financing and then the house would be in your name legally or your parents can carry the note and you can have paperwork drawn up accordingly.

Answer 7

There are tax issues here as well as legal ones.  Consult a good attorney and a tax advisor.  Together they can structure a proper agreement.  It may not be on the terms you mentioned but it will be legal and protect all parties.

Answer 8

For a simple answer, you set up a land contract with a purchase agreement between your parents and yourself.  Now you have a legal document to purchase the property and make payments.

Now for the legal issue with your sibling, I recommend to consult an attorney but it shouldn't be an issue since you have a legal purchase agreement.

Answer 9

Unless, there is an expressed reason on title why they can't do it, anyone can sell a home for as much or as little as they want.  

However, if there is a lien on the property, you might not get a clear title.

My advice would be to use a Real Estate agent as a disinterested third party to complete the transaction.  You don't have to pay the agent a lot of money.  It is typical in a situation such as this to pay 1%. You will also need to pay recording and transfer fees. Your agent can give you an estimate of fees.  

The small amount of money you pay now will be worth it if your siblings decide to initiate legal action against you later.