real estate transaction in family?

Question

I bought a condo in 2006 for 177,000. I now owe 107,000. Because of the housing market the condo is worth about 160,000 now. I would like to sell the condo to my brother for 145,000 to give him a deal on it. My brother  only earns 37k a year but has a 740 credit score. My father is willing to co-sign with him if need be. My father earns 200k a year and has a 730 credit score. What would be the easiest way for me to sell condo to my brother and how much would he have to put down. My biggest concern is ticking people off in the building by selling the condo at such a low price I dont want to bring other property values in the building down. Also the condo is on lake michigan and the values have not gone down their as much in most areas. What are my options?

chatsplas · Accepted Answer

Even if it is a cash deal, the sales price is reported and a matter of public record.....and it IS the business of other condo owners in bulding, but specifics of your transaction are not.
 
If you're in IL, you need an attorney to represent you, the seller, and draw up the contract and deed and documents.
Rule of Thumb:  Bro can afford to buy home at 2.5-3 times annual income.  Higher his down payment, the better.  Minimum with FHA is 3.5-5% down.  With conventional, need 10-20% down, and 20% down avoids extra costs of PMI.
Both Bro and Pop have good credit, and if they have not got heavy debt loads, this could work.  Need stable employment, adequate income, sufficient down payment, low debt load, good credit score to get mortgage in this economy.

Anonymous · Answer

If the condo is worth $160K and you sell it to your brother for $145K, you will have to file a gift tax return for the difference.

? · Answer

What you sell the unit for is no one elses business.  Your brother applies for a mortgage just like any other buyer

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real estate transaction in family?

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