As your parent ages, you may find she has more expenses than income. Purchasing her home and then allowing her to live in it can help reduce expenses and increase the money available for paying them. Purchasing the house also allows you to reap the tax benefits of home ownership even if you are not living in the home. Before you purchase your parent's house, discuss it with her and then consult an appraiser and a tax professional.
- Skill level:
Research the selling prices of similar homes in your parent's neighbourhood. Your county's tax appraiser's office makes this information available to the public.
Determine the remaining balance on your parent's mortgage. Your parent can contact the mortgage company for the payoff amount if his home has not already been paid for in full.
Decide on a fair value of your parent's home based on the selling price of similar homes in her neighbourhood. Also, take into considerations any upgrades or extra land attached to your parent's property. Hire a real estate appraiser to ensure that your estimate of the home's fair market value is correct. To avoid any gift or inheritance taxes, you must purchase the home at a fair market value. Talk to a tax professional if you need more information on the tax implications of the home purchase.
Secure financing through your bank or a mortgage company if necessary. The lender will inform you of any paperwork or documentation needed to complete the purchase.
Pay your parent and the mortgage lender for the house. You and your parent will sign documentation like that used in a normal house sale. These documents legally transfer ownership of the home to you.
Draw up a lease if you are going to rent the home back to your parent. The lease should cover how much you will charge for rent. The rent amount must first be agreed to by you and your parent. Also include in the lease any provisions for that money, such as setting it aside to cover certain expenses.
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