Perhaps the most intimidating thing about buying a home is not knowing exactly what you're signing up for. Though having a home inspection can alert you to issues that may be lurking with that property, that still doesn't guarantee you won't buy a house only to have to replace its roof, water heater, or air conditioning system within a year. And unfortunately, sellers aren't always so forthcoming about problems.
It's for this reason that you may be considering buying a home owned by a friend of yours. If you know someone who's looking to sell, you'll get the inside scoop on that house.
But is buying a home from someone you know a good idea, or is it a decision you'll ultimately regret?
The upside of buying a home from a friend
The primary benefit of buying a friend's home is that chances are, your friend isn't looking to cheat or mislead you. If it's a good friend, he or she will let you know what problems exist with that property so you'll know what to prepare for logistically and financially.
Furthermore, if you buy a home directly from a friend, it means that friend may not need to hire a real estate agent and pay the commission that goes with it. As a result, your friend may be willing to pass some of those savings on to you in the form of a lower asking price.
Finally, if you buy a home from a friend but encounter issues with it afterward, you'll have a resource for troubleshooting problems. Say you purchase a friend's home and find that its oven is finicky. At that point, you'll be able to call that friend and ask for advice on how to address the problem rather than rush to bring in a repair person who will charge you for assistance.
The downside of buying a home from a friend
On the other hand, buying a home from a friend could sour that relationship. Imagine your friend neglects to disclose an issue with the property that you discover after the fact. At that point, you're out money, which may serve as a source of bitterness for you.
Similarly, you may not agree to your friend's asking price for that home, and your friend might accept a lower offer to close the sale. But he or she might then harbor resentment over not having gotten top dollar.
Furthermore, if you choose to make cosmetic changes to that home after moving into it, your friend may get offended once he or she sees the work you've done.
In other words, buying a friend's home opens the door to strained relationships and conflict, and that's something you may not want to sign up for.
The bottom line on buying a friend's home
Buying a home directly from someone you know well could result in savings and help you avoid unpleasant surprises after moving in. Just be aware of how that transaction could impact your relationship, and decide whether it's worth taking that risk.