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my son offered to buy house for us and in a year we would buy it from him. Is that something that is

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August 01 2012 - US
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Answers (3)

Profile picture for sunnyview
Your question was cut off, so you may want to post a bit more. If you are asking about your son to buying your own distressed house and reselling it to you in a year that would not be legal. If you are looking at an unrelated house and cannot qualify, your son can buy it and resell it to you without an issue.

I would caution you that real estate transactions with family often do not go as planned and can go south quickly. If you have a way to wait to buy or qualify a different way on your own, please consider that instead.
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August 01 2012
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August 01 2012
Hi,

Presuming you are asking about the pros and cons of accepting your son's generous offer, it would be wise to consider the costs involved of this double transaction.

First, the property would be in his name -- not yours. That means you property will be taxed at a higher rate for the duration of your son's ownership. You won't be eligible for homestead, senior, or disabled tax exemptions on this property.

Some other things to consider include capital gains taxes and the costs associated with closing twice... first when your son buys the home, and subsequently when you buy the home from him.

The biggest cost may come from your son's financing options, should he choose to purchase the home with a mortgage. A non-owner occupied note is treated as an investor loan, which totes higher rates and at least 20% down.

An FHA Kiddie Condo loan might be an attractive option to consider. At any rate, it would be wise to consult with a lender about all of your options, as well as your CPA to vet out the financial implications of each choice.
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