Expert: Jessica Bryan - 5/23/2006

Question
My husband and I are buying the house my mother has lived in for the past 30+ years from my brother for a very reasonable price, We just don't know how to go about it.  Do we need a lawyer? Surveyer? We are approved at our credit union for a loan.  What's next?  Thank you.

Answer
Dear Gaye;
Buying a home from your brother still involves some legal documents.  Since you are getting a loan the lender will require an appraisal. You should still also have the home inspected just to know how much fixing and maintenance is involved.  The last thing you need is an unwelcome surprise after you take ownership and find that the heating system has to be replaced and you didn't budget for it!  A survey is always a good idea just to make sure that there aren't encroachments on your land and that there aren't walls or structures that are in easement areas.

Getting an attorney to draw up a contract, a new deed, examine title and procure new title insurance are all important aspects of transferring ownership.  In addition, the lender will need for you to sign mortgage papers at a closing where the attorney will explain everything to you and then record all of the documents.

I would also suggest that you get a termite and pest inspection, radon inspection and if there is a well or septic system have that inspection done too.

You mentioned that you are buying this home at a reasonable price.  Are you absolutely sure that you are getting a really good deal?  Have you done some comparative shopping?  Sometimes, people think that buying from friends or relatives is better than buying from strangers but often get burned by not shopping around and being truly knowledgeable of the market.  However, if you are certain that this is the right home to buy, then treat it like any other home purchase regardless of your relationship to the seller. Everything should be in writing and legal.

So...to summarize:
1.  Find a real estate attorney and discuss his/her fees and ask for a contract to be drawn up (use the state approved residential real estate contract).  The attorney will advise you of the rest of the procedure with the contract, closing and recording.  There will be certain dates set forth in the contract and time periods to complete inspections, get a loan approval, etc.

2.  Once the Seller--your brother signs the contract, tell the credit union how much of a loan you will need and begin the loan application process.  (You will need to provide a set amount of earnest money which will be held by the attorney until all of the terms and conditions of the contract are met.)

3. Arrange for the home to be inspected by a licensed home inspector (you can find them in the Yellow Pages or ask someone you know who has recently purchased a home for a referral).

4. If there are any problems found in the home once the inspections are complete, make sure to negotiate who will repair these things prior to transferring title.

5. Set up a day and time for signing all of the papers at the attorney's office. Find out how much money you will need to bring to the closing.

That's it.  I hope that the transaction goes smoothly and you enjoy your home!
Sincerely,
Jessica Bryan
Managing Broker
House to Home Realty Services