My husband and I bought our house from my parents recently. The amount they received was lower than expected.

Question

It wasn't much lower, but there's more to the story. A couple of years ago we were in the final stages of buying the house when I had to get a new car. We didn't want to be financially strapped, so we held off on buying the house. During that time, the housing boom took off, and my parents came up with a new price for us... $125,000 MORE than what they originally offered us. You can imagine how we felt. My sister bought a house from them also and did not have to pay anything near that. Anyways, I finally had it. I e-mailed them stating that we paid for all repairs on this house and were never re-imbursed, though we gave them our receipts which they wrote off on their taxes!!! We finally stopped giving them receipts when we weren't getting reimbursed, though my mom continued to ask for receipts!!! I think they finally saw my point and came up with an offer for us.. we'd pay about $7,000 more than what they paid, but they would pay our closing costs.

This would allow them to get a tax break on paying the closing costs. My dad underestimated slightly how much my parents would receive and my husband and I felt bad. We offered to pay them some money once we got our tax return, but is this the right thing to do? They are getting the tax break and they got off on not reimbursing us. The difference is less than $1,000 in what they received at the close. We did find out there was an error on the closing costs and we were told we could either get a refund or have our mortgage payment be lowered. We chose to take the money to give to my parents to help out with the difference, on top of giving them some of our tax return. This would give them way more than what they originally expected. Your advise would be greatly appreciated.

My question was right there.. is us giving them more money the right thing to do even though they are getting the tax break and filed their taxes with our receipts.

Hi Wise Guy- my parents own several houses and rent them out. They are all paid for. They pretty much bought this house for us to buy. We moved in after it was bought by them. One person mentioned that I'm just trying to brag, but that's so not the case. Everyone knows the housing situation and our neighborhood is a great example of how the market has affected the prices. There's a house across the street for sale for almost $100,000 less than what the previous owners had it listed for. I just want to do what's right, but have it be fair.

I almost forgot.. we even offered to give them half of our profit on the house if we ever sold, but I don't expect to sell.

A person asked if my parents live nearby. Yes they do. I e-mailed them first, and also talked with them in person. They originally offered to finally refund us the money from the receipts we gave them and that's when I brought up that I never would have said anything about the recipts if we had been given a fair price on the house since my sister did. My brother also bought a house from them and he did not have to pay an inflated price either. I'm just trying to be fair. They are away now, but I think I will ask them what amount they would be happy with. That way I can hear it from them instead of just guessing on what to do.

Answer 1

I think that emailing your parents with issues that are important isn't right. Sitting down and discussing issues face to face, especially when it comes to something like this is more appropriate.

(do they live close by? i guess if not, then emailing or the phone was your best bet).

I think that discussing this and coming up with a solution the four of you can agree upon would be the wisest choice. When it comes to money, there can be problems. Perhaps approach your parents and let them know you don't want a house or money to come between you, and that you'd like to work out a solution.

Take care, and you are fortunate to have parents who can do these things for you. Most of us don't.

Answer 2

I think this is more a question of family relations, rather than a business deal.
If you can live, guilt free, with paying your parents far less than true market value, then do so. Just remember, they are your parents and never charged you for your upbringing and they can use as much money as they can get, for their retirement.
Good luck. I'm sure you will do the right thing.

Answer 3

The housing boom seems to be going into reverse now. It is always hard buying from friends or relations; you should always have an independant valuation.
As you seem to be in the USA and I am in England I don't know the tax implications.

Answer 4

You might want to think twice about buying a house from your parents only because it sounds like money could very well get in the way of your relationship. Sounds stressful! Good luck!

Answer 5

You paid for the house, they are the ones who underestimated what they would received. You don't owe them anymore and don't need to pay them anymore.

Stop worrying about this.. you have no reason to feel guilty.

Answer 6

Ok So what is the question.

Or are you bragging that you ripped your parents off. They could have been planning to use that money for their retirement.

I wonder if you would be so generous with your children. You seem to be a very materialistic person and are concerned with yourself and not others.

Answer 7

Stand on your own 2 feet and be prepared to do battle. They are not honest people and will screw you over big time.

Answer 8

these things happen. would you still be upset if the house was worth more? and it will be worth much more in 5-7 years. get it settled and get past it.

Answer 9

well i think you should pay them......
not bcz they're your parents but bcoz its a business & they play it fair for you

Answer 10

i'm glad u got that off ur chest. what's the question?