Sorry if I'm posting this in the wrong sub.
I been house hunting for a while now but homes where I live in California are pretty high ($550k) for a mediocre 2 bed 1 bath. A family friend who I know since childhood recently approached me and offered to sell me her runner down home (3bed 1.5 bath) for $400k. Homes around her neighborhood are around $550k.
Although the house is 3 bedrooms in paper, she has divided the garage into two additional bedrooms and built 2 crappy bedrooms in the back yard for a total of 6 rooms 5 of which she rents for $500 a month.
There is a catch to this deal though. She said that in order to help me with the "taxes and fees" involved with selling/buying a home, she would prefer only doing a personal "title transfer" (I'm not sure if this is what is called) and sell it to me on paper for $250K, which is what she has left on the mortgage, and have me give her the $150K left in cash.
I explained to her that taxes will be close to negligible whether I pay taxes for a $250k home or $400k home, and plus the city will most likely re assests the value of the home anyways and tax me at $400K for me to go through the risk of paying out $150k in cash.
Maybe I'm being too suspicious and distrustful, but is this something that can be done? What are the risks of doing this without listing the house or involving real estate agents? Is there something that she might be planning that might affect me in the long run? The only thing I can think of is her trying to avoid paying taxes on the residual income once then Mortgage is paid off.
Submitted January 03, 2017 at 11:13PM by zerob_directv http://ift.tt/2iGDhdB
