Buying A Home
jibberjabbers
member
Buying a $550k home from family for $300k (on paper) possible?
Wondering if this was possible for property tax purposes.
Sister is selling me a house for $550k.
I'll get a $350k loan with $50k down. And give me Sister $200k cash. Can we on paper say I bought the house for $350k?
Sister is selling me a house for $550k.
I'll get a $350k loan with $50k down. And give me Sister $200k cash. Can we on paper say I bought the house for $350k?
Re: Buying a $550k home from family for $300k (on paper) possible?
This is also true where I live. Although the assessor's office will sometimes take into consideration what you actually paid for the house (on paper), they will also pretty much throw out that consideration for foreclosures or sales between family members. Probably just for that reason.
And the other PPs are right about the legalities. I don't know if you have ever purchased property, but some of the documents you sign...both as buyer and seller...verify there are no "side deals" between the two parties.
It is only rare circumstances that a bank will "call a loan", which basically means you are given a specified period of time to pay the entire loan...usually only 90 days. But the situation you are describing is the kind of thing that many banks would use as a reason to call the loan, if they ever got wind about the large side deal.
I hear where you are coming from, but it is just not worth it to MAYBE save a bit on property taxes. On the good side, with that large of a down payment, you can avoid PMI plus save a lot on interest.
Not only that, but even if this were possible, when you eventually sold the house, the $350k would be considered your cost basis which could screw you come tax time.