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You would want to contact a lender and ask them if you are qualified to purchase the home. Once you know, contact a local Real estate attorney/title company to write up contract and purchase the home! You don't need a realtor.
I agree with the answers below in regards to speaking with a CPA for the tax hit. I have 15 years of experience in the mortgage business and i can tell you this: This is what they call an "arms length transaction" meaning the seller and buyer have a mutual interest or simply put " related" so the rules that will apply to your purchase will be a little different. I think the way to go here would be to have your parents add you to the mortgage AND title. Once they do that, since you know you can get a loan for 140k, after AT LEAST 12 months, refinance the mortgage out of their name and into yours solely. Treating the deal as a refi as opposed to a purchase will be a lot easier for you. Since refinancing requires closing costs, i would recommend you go to a place like RP Funding out of Tampa, they have ZERO closing costs when you refi, and they do that because they hold the paper and dont sell it off to a secondary investor so they are making money on the interest rate and thats so its actually a pretty good deal. If you want more details to what your options are in this situation, please call me at 813-990-9232. Hope this helps!
I have already answered, see below, however if you would like to give me a call, I can refer you to the best in the industry for 1031 exchanges, lenders, tax accountants.
Their Capital gain is over now after 5 years of renting, but in my opinion just get the best financing available for the property that is satisfactory to you and that your parents get what they need. Keep in mind that you will be paying property taxes on the purchase amount, and if you parents are using the money to buy another property they might not need to pay taxes, or if they buy another investment property they could do a 1031 tax exchange, but that will cost additional money to postpone capital gain and in this regard you will best get an advice from the tax accountant.
Hello, a CPA would be best to answer the tax implications. Since this is a private transaction you should contact a real estate attorney to complete an agreement for you and the same attorney will probably be able to handle the closing/title work for you.
Thank you for the replies. Wish i could have been more detailed in the first post. My wife and I are approved up to 140k. Orginaly we were going to buy for 100k,a gift of equity for 20% down and seller pays closing costs. If they sell below market value would big brother come after them for taxes on the difference of purchase price vs market value? Would them refinancing adding me to the mortgage and then i refinance shortly after that to remove them be a better option? We'd like to leave as much equity in the house as possible as we only plan to stay here another 4-6 years.
Please call me it would be a pleasure to help you in this venture.
A Real Estate Agent can provide you with all the details of a transaction.
You would want to contact a lender and ask them if you are qualified to purchase the home. Once you know, contact a local Real estate attorney/title company to write up contract and purchase the home!