Anyone buy a house from someone they know?

As the title states. I've idly been looking for a house for a couple years now. Requirements were pretty basic. Two car minimum, pool, no hoa. Preferred seminole county (oveido, Longwood etc for those in Florida). Budget ~250k. I can stretch to probably 400, but I don't wanna pay those taxes. It's just me and swmbo and taxes are dumb. 

I was striking out pretty hard at hitting all the requirements. No hoa is pretty easy, but houses in Florida just aren't built with garages. And the ones that are are not built with pools for some reason.  So, it was down to what do I want to pay for myself. A building, or digging a hole. 

Out of nowhere a coworker suggests I buy his house. I know what he paid for it. I know it's got a brand new roof on it. I also know it's completely not the right area. However, it's the right area. The big downfall with seminole county was the absolutely horrid commute we would face. This house is in Osceola, close enough that it would put me in the celebration school district, and miraculously, closer to my job than I am now (which is only 2.5mi door to door as it is). Swmbo's commute to Disney would not change. 

Then I'm thinking, this house is going to suck like all the other houses in the area. 

https://www.zillow.com/homedetails/2657-Oneida-Loop-Kissimmee-FL-34747/55792669_zpid/

It checks all of the boxes. I'm not thrilled with an electric kitchen, but I can go outside and use my gas burner if I have to. I know it's been repainted inside since these photos were taken, prior to my co workers possession. 

The part that weirds me out is buying a house from someone I know. I like the concept of total anonymity when it comes to negotiation, because I hate negotiation. 

Anyone done this before? Am I dumb? Should I move on?

We bought our house as a rent-to-own from a coworker of my wife. It was our first place and we didn't have money for a down payment, so we drew up a contract. Part of our rent each month went in a joint savings account in their name and ours. After one year they sold the house and we had right of first refusal. If we bought, the money in the account became our down. If we opted out, I think we split the account 50/50 or something. We bought and are still there almost 20 years later.

There's some stuff that was not great about the house physically, but it passed inspections and overall has been fine. It's realistically much worse now due to my lack of maintenance work until the last couple years. It's a cheap suburban stick-built house, we couldn't have done much better but we sure could have done worse.

Mndsm said:

The part that weirds me out is buying a house from someone I know. I like the concept of total anonymity when it comes to negotiation, because I hate negotiation. 

I bought my first house from my manager.  This was convenient because the housing market was nuts at the time (the bay area during the dotcom boom) and it meant I wasn't competing against 4 or 5 other peoples' offers.  Didn't need to do any negotation -- he had already set a reasonable asking price and I said "sounds good".  No issues after the fact, although it helped that the house was only a few years old (my boss had bought it new), and I got a home warranty to cover it for the first couple years.

We sold my wife's old condo to her neighbor there that she knew and was friendly with. We made a reasonable to conservative estimate on the sale price in open market, backed out the realtor cut, and that was the price. He squirmed at first, but once he realized we weren't budging, and it was a good deal for him, he took it. Condo is easier re: inspection condition. We haven't seen him since (2016). You'll still see your co-worker. Keep it light, ask to look around the property and see what they want for it. If you're far away, probably not worth it. 

I never have, but I would have no problem with it. The risk is really on his side, but even that is really no different than any other buyer. The only thing at jeopardy is your friendship, but frankly you should look at a house as a business proposition and think of things in it as black and white. As a buyer I'd probably prefer it, as the seller is probably more honest with the problems that are known. 

bluej (Forum Supporter) said:

We sold my wife's old condo to her neighbor there that she knew and was friendly with. We made a reasonable to conservative estimate on the sale price in open market, backed out the realtor cut, and that was the price. He squirmed at first, but once he realized we weren't budging, and it was a good deal for him, he took it. Condo is easier re: inspection condition. We haven't seen him since (2016). You'll still see your co-worker. Keep it light, ask to look around the property and see what they want for it. If you're far away, probably not worth it. 

We're less than 5 miles from each other door to door. 

A plus side is that you could probably do the deal using a real estate attorney and finding your own title company, rather than using one or two real estate agents and having them both take a cut. For a simple transaction like this, fees for a real estate attorney are far cheaper than realtor commission.

I don't think I could from someone I was friends with and hung out with, but a coworker that I was just aquaintences with could work.  I'd still feel weird about telling them when I was changing stuff about the house, though.

In reply to newrider3 :

x2

I bought my current house from Curmudgeon/Jensenman when he moved to Columbia to be closer to family. 

We discussed it, settled on a price and called an attorney to write up the paperwork. It was as painless as it could be and we didn't have to pay the real estate fees. 

Mr_Asa said:

I don't think I could from someone I was friends with and hung out with, but a coworker that I was just aquaintences with could work.  I'd still feel weird about telling them when I was changing stuff about the house, though.

I can guarantee he doesn't care. He was talking about painting the outside and I asked him if I could choose the color. 

He paid cash for the house less than a year ago, and he's realizing he'd much rather have a quarter liquid than a quarter in a house. He's very much an outdoorsy prepped type, and property in the city just isn't his vibe. 

This is what we did and it worked out great. We didn't negotiate because the price they offered was more than fair, but I can see that being an issue if you do want to negotiate.

That's a pretty sweet house for that price. It's the easy button honestly. Real estate attorney boom done.

Bought my first house a year and a half ago. We probably looked at over 30 houses and backed out of buying one before finally finding ours. I learned a lot from that whole process and if/when we buy our next house I would kill to skip over the searching and touring process. We used Redfin and I spent so many hours searching for houses (I preferred this method).

I've bought used cars from people I know and probably would buy a house.

Have a good understanding of what he doesn't like about the place.  What's wrong and what's gonna need some replacement, but if the price is right, the house seems nice.  

Just know that like used cars, things break after you buy a used house.

We sold our place in IL to a friend & his wife on contract & it's been working out fine, but a). It would have been difficult to sell traditionally due to a number of reasons, and b.)  we don't need the cash from it to survive so if/when they're late for a payment I just let it slide(since that means more interest $$ for us anyway) & they eventually catch up & pay extra for a few months. 

clutchsmoke said:

That's a pretty sweet house for that price. It's the easy button honestly. Real estate attorney boom done.

Bought my first house a year and a half ago. We probably looked at over 30 houses and backed out of buying one before finally finding ours. I learned a lot from that whole process and if/when we buy our next house I would kill to skip over the searching and touring process. We used Redfin and I spent so many hours searching for houses (I preferred this method).

It is. That's what's killing me. I drove through the neighborhood too, and it's pretty quiet and we'll maintained. 

We just sold my wife's parents' house a little over a month ago to a neighbor's daughter that she has known since they were kids.

However, since both she and we already had real estate agents, we didn't have any interaction with the buyer or family after we were originally approached while we were prepping the house for sale.  The buyer put in a bid the day the house was listed, but there was a bidding war, and the house went $27K over the listing price (which was $19K over what we were told to expect)  

We really wanted the neighbor's daughter to have the house, and likely would have left $46,000 on the table without a Realtor.


While this may be viewed as just someone looking to brag about a home sale, my point is this-
Never underestimate the value of buying direct from someone who likes you, and wants you to get a good deal.
 

If it is that good a deal and hits all the requirements, I definitely wouldn't let this scare you. Get a good inspector just so you know. 

mtn (Forum Supporter) said:

If it is that good a deal and hits all the requirements, I definitely wouldn't let this scare you. Get a good inspector just so you know. 

 

Good inspector is worth every penny they charge.

John Welsh said:

Just know that like used cars, things break after you buy a used house.

Get the home warranty to cover stuff like appliances and roof repairs for the first year or two.  After that it's just normal homeowner pain rather than "Bob sold me a house with a bunch of defective stuff in it"

Have it inspected like you would do anyway.  Get a home warranty.   

Being able to skip that real estate agent commission gives you some room to get him to come down on the asking price some.  Any way to bypass that racket is a good thing.

codrus (Forum Supporter) said:

John Welsh said:

Just know that like used cars, things break after you buy a used house.

Get the home warranty to cover stuff like appliances and roof repairs for the first year or two.  After that it's just normal homeowner pain rather than "Bob sold me a house with a bunch of defective stuff in it"

 

I know the roof is less than a year old, it cost him 12k lol. 

He has a house.  You want a house.  Seems pretty straight up to me, unless you are a douche that is going to bitch about everything you have to fix in it for the next 40 years.

Streetwiseguy said:

He has a house.  You want a house.  Seems pretty straight up to me, unless you are a douche that is going to bitch about everything you have to fix in it for the next 40 years.

Yup. And remember, there isn't a used house out there that you don't look at something the PO did that makes you scratch your head and wonder WTF were they thinking. And that will happen when all of us sell our houses too. Don't hold it against the guy. Just deal with it as if you bought it from a stranger. 

Streetwiseguy said:

He has a house.  You want a house.  Seems pretty straight up to me, unless you are a douche that is going to bitch about everything you have to fix in it for the next 40 years.

I'm not gonna bitch about him. People before him, maybe. It was a vacation home. Those people are shady as berkeley.