When you buy a home that a close friend or family member is selling, you might be tempted to think of this as a relatively informal affair. However, this is still a relatively serious business, and you will want to check off all the boxes in legally taking possession of the property. Though it will likely be a bit easier to manage, a home purchase from someone familiar is something to take seriously. 
As a result, there are still several important factors to keep in mind when making this transfer of property:
- You need a home inspector.
Before buying the home, have it inspected This will help you determine what issues might exist in the home, and determine whether it is your responsibility or the current owner’s to repair them. It can also uncover any needed code upgrades and help your home insurer when setting your rates.
- A mortgage might be your best bet when paying for the home.
Rather than paying your acquaintance directly, it might be easier to manage your payments and financial obligations by financing the home with a mortgage. Therefore, you’ll build a relationship with the bank, which can be a reliable partner when it comes to resolving monetary disputes.
- You must file all appropriate documents.
Before you can finalize buying the home, you will need to file the appropriate titles, taxes and other ownership documents. Usually, you will need the help of an attorney or a real estate agent to do so.
- It’s important to have the home appraised.
The cost that you pay for the property might be a deal, considering it is between friends. However, the selling price is not reflective of the actual value of the home. Therefore, you must have the property appraised. This will help you know how to list the appropriate value for taxes and choose the right coverage limits for your homeowners insurance.
- Ensure that both parties understand exactly what selling means.
Even if you buy a home from a family member or friend, it is officially your property once the papers are signed. Therefore, if you have any agreements about letting the former owner live on the property, or asking them to provide certain upkeep, then make sure those expectations are set in writing.
Yes, there are fewer hoops to jump through when it comes to buying a home from a close acquaintance. However, there are no exceptions to important legal tasks that are needed formally take possession of the home. Therefore, when there is red tape, just remember that it is there for your benefit. Still, your legal teams and your homeowners insurance agent will make certain you get all the appropriate protection you need to feel secure in your new property.