Would you take a free house...

[Laila619]

...if a family member wanted to give it to you?

DH and I currently rent but we've been looking for a house to buy for a while. However, when his grandparents hear that we were house hunting, they offered to give us their second home, free and clear (well technically it will be "sold" to us for $1). The title and all the other paperwork would be in *our* name, and we would have no mortgage payments at all since it's obviously already paid off--all we would be responsible for are the property taxes basically (and of course all the other expenses that go along with being a homeowner ). It's an extremely generous offer, and DH and I are tempted to take it but part of us wants to have our own house that no one helped us with or gave us. It's a pride thing. Plus even though it would officially be our house, we still worry that the grandparents would feel like they have the right to offer advice or meddle in our business since it's their home they're giving us.

What do you think? Thanks for the advice.

 

[Tanzigrrl]

Heck, yes, I'd take it. It's a generous offer and could save you major money. If I didn't have a house payment, imagine the bling I could buy!

 

[sna77]

yes.

/end thread.




But seriously--taking a gift from family is nothing to feel shame about etc. When your son comes of age, I'm sure you'll want nothing more than to provide for him and his family, ensure their financial security etc. I mean if you can't give to your family, who can you give to? It's what makes working hard all worthwhile...

 

[Lottie]

I think it very much depends on your relationship with your grandparents - are they likely to feel as though the house is still theirs? Are they likely to keep a key for themselves and 'drop in' from time to time to see what you are doing with it? Would they be upset if your remodelled the kitchen?

From your Grandparents point of view, this is a very generous gift they are giving and you would need a really good reason to turn it down without hurting their feelings. I know pride is a factor but honestly - looking down the road, is this something that you would be happy to do for your own children/grandchildren?

You could always accept the offer, then mull over the rights and wrongs on the fabulous holiday you can go on using what would have been your mortgage payments

 

[Laila619]

I think it very much depends on your relationship with your grandparents - are they likely to feel as though the house is still theirs? Are they likely to keep a key for themselves and 'drop in' from time to time to see what you are doing with it? Would they be upset if your remodelled the kitchen?

Yes, yes, and yes to those questions, Lottie. That is why we are a bit hesitant. If we did any remodeling, they'd probably feel hurt. They might still treat it as though it were their house, even though it wouldn't be anymore.

Also, there are 5 other grandchildren they have, so there might be some jealousy issues stirred up.

 

[Laila619]

Thanks Tanzigrrl and sna77!

 

[lulu66]

yes.

/end thread.

ditto...unless i knew of some family history or personality conflict that would attach "strings" to it. while i understand pride, this is a generous gift, one that could allow you to save all $ you would have been putting into a mortgage for the next 30 years. that's a big deal. i would sit down & seriously discuss with your grandparents: their expectations & yours & see if they line up (or can be made to). good luck with your decision. i say, go for it & reap the savings & appreciate the generosity!

 

[TooPatient]

Depends on the relationship with the grandparents and how they are financially.

If accepting the offer could leave them in a difficult position financially, I wouldn't do it. If it would be a help to them financially (reducing their monthly expenses due to taxes & maintenance), I'd be likely to accept.

As for the relationship, this would be the big thing for me. If they are the sort of people to hold a gift over your heads so you'd "owe them"... that is a big thing. Would they be comfortable with you not just re-decorating, but possibly doing major remodels? What if you had to move for work (or just because you want to) -- would they be okay with you selling the house?


I'd lean towards accepting if I thought there was any way to make it work for everyone. You can always save what you would have been paying to the mortgage and use it as a nice down payment on a different house in a few years (combined with selling the one given to you, you might be able to pay for a house in cash and not have to worry about a mortgage!).

 

[Lottie]

I think it very much depends on your relationship with your grandparents - are they likely to feel as though the house is still theirs? Are they likely to keep a key for themselves and 'drop in' from time to time to see what you are doing with it? Would they be upset if your remodelled the kitchen?

Yes, yes, and yes to those questions, Lottie. That is why we are a bit hesitant. If we did any remodeling, they'd probably feel hurt. They might still treat it as though it were their house, even though it wouldn't be anymore.

Also, there are 5 other grandchildren they have, so there might be some jealousy issues stirred up.

The question over their emotional attachment to the house would be a big red flag for me, you have to be able to live there and feel as though it is your home and not theirs. Do you think his parents would be able to sit down with the grandparents and tactfully point out that they would be giving up rights, such as keeping a key (unless you want them to have one) and having a say on what you did to the house? Sometimes a middleman is good for ironing out emotional issues.

 

[MichelleCarmen]

I'd only take it if they would be okay with me renting it out to someone else. Usually there are strings attached and with something such as a house, I seriously doubt it would be a just a nice, no-string gift.

The reason I would rent it is because moving would mean taking my kids away from all their friends and us relocating and we wouldn't want to do that. But, say the house is right down the road and nothing would change except our address. Kids could stay in same school. Yes, of course I'd take it. Then I'd know for sure DH and I could save up money to help contribute to our kids college educations. ETA - or we could use the rental money to buy a home where we live now. Which I guess technically defeats the purpose of having a home given to us, because NO, I wouldn't take a home if it meant giving up our established roots. We've moved around A LOT but the one thing we've managed to do is keep our kids with their friends.

Is the house nearby where you live?

 

[MsP]

Depends on the relationship with the grandparents and how they are financially.

If accepting the offer could leave them in a difficult position financially, I wouldn't do it. If it would be a help to them financially (reducing their monthly expenses due to taxes & maintenance), I'd be likely to accept.

As for the relationship, this would be the big thing for me. If they are the sort of people to hold a gift over your heads so you'd "owe them"... that is a big thing. Would they be comfortable with you not just re-decorating, but possibly doing major remodels? What if you had to move for work (or just because you want to) -- would they be okay with you selling the house?


I'd lean towards accepting if I thought there was any way to make it work for everyone. You can always save what you would have been paying to the mortgage and use it as a nice down payment on a different house in a few years (combined with selling the one given to you, you might be able to pay for a house in cash and not have to worry about a mortgage!).

I think the problem is that you don't know these things until it's too late and you're already in hot water. Even if the family member says, "Suuuuure... go ahead, remodel as you wish" NOW but then down the line they feel resentment that you did XYZ and you feel pressure to remodel in a certain way, etc. I do like the idea about asking if they would feel comfortable if, after you received the gift, they would feel comfortable if you sold it. I think this would generate some very good discussion and reveal their feelings.

Do you have siblings? Or are there other grandchildren. Consider resentment there too. Do you want to destroy those relationships... are they getting equal gifts, etc?

I know my family and I would NOT accept. I have a very close family and I have seen the downside play out all too often on these "no strings attached" monetary gifts.

 

[Laila619]

I'd only take it if they would be okay with me renting it out to someone else. Usually there are strings attached and with something such as a house, I seriously doubt it would be a just a nice, no-string gift.

That is what worries me, MC. These things tend to have a way of going south. Resentments seem to come up down the road.

Plus, would it really feel like "our" home?

 

[Laila619]

yes.

/end thread.

ditto...unless i knew of some family history or personality conflict that would attach "strings" to it. while i understand pride, this is a generous gift, one that could allow you to save all $ you would have been putting into a mortgage for the next 30 years. that's a big deal. i would sit down & seriously discuss with your grandparents: their expectations & yours & see if they line up (or can be made to). good luck with your decision. i say, go for it & reap the savings & appreciate the generosity!

Thank you lulu! That is a good suggestion.

 

[Laila619]

If accepting the offer could leave them in a difficult position financially, I wouldn't do it. If it would be a help to them financially (reducing their monthly expenses due to taxes & maintenance), I'd be likely to accept.

TooPatient, they are currently renting it out, and the tenants leave Jan. 31. Grandparents said they want to be done dealing with tenants and being landlords, and they really want to do this for DH and me and our son.

 

[sna77]

yes.

/end thread.

ditto...unless i knew of some family history or personality conflict that would attach "strings" to it. while i understand pride, this is a generous gift, one that could allow you to save all $ you would have been putting into a mortgage for the next 30 years. that's a big deal. i would sit down & seriously discuss with your grandparents: their expectations & yours & see if they line up (or can be made to). good luck with your decision. i say, go for it & reap the savings & appreciate the generosity!

Thank you lulu! That is a good suggestion.

I try to always remove emotional decisions from financial ones. To me, assuming the house is in a place you are OK living, this is a no-brainer to take the house. I mean, it's your grandparents--make it work from a family standpoint. How much is your rent--$3,000 month or so? The cost of a $500k house over 30 years is over a million dollars! This is a HUGE advantage for you, your children etc. Figure out whatever needs to me figured out emotionally, and make it work...

 

[sna77]

and they really want to do this for DH and me and our son.

don't look a gift horse in the mouth... (or in this case, a gift house. )

 

[packrat]

I would do it in a heartbeat. We'd've been able to have a nice savings set aside for the nasty bumps in the road that come along that make us barely able to keep our heads above water if we didn't have a mortgage. We'd be able to put aside for the kids college also-which we are unable to do now. Our retirement as well. Any house will feel like "your" house when you put your stamp on it.

We're paying for our house-and my parents STILL -mostly dad-try to tell us what we can and can't do, what paint colors to pick, where to plant flowers, what kind of couch to get. Big dramatic arms waving in the air and eye/head rolls and yelling OH GAWD to the heavens. If his Grandparents want to be nosy about what you do, or try to tell you what to do, smile and say thank you for your opinion/help.

 

[marymm]

As long as the grandparents had enough money coming in to more than cover their own living expenses without the rental income or possible sale of the 2nd home, and as along as the grandparents weren't floating the "free house" offer simultaneously to other family members, and as long as the house was located in an area I (and my family) desired to live -- I would totally accept their offer and take the house! Once the house was titled in my name, I would immediately change the locks and re-key the whole thing, inside and out.

 

[iLander]

I would jump at it, if it were me. BUT I would talk over these points specifically;

What if you need to move? Is the house theirs again?

What if you want to sell the house? Can you do this? If so, who gets the money?

What about the other heirs?

It might be better if you just rent it at a cheap rate which covers all their overhead and expenses, and they retain the title.

Less messy for the heirs, and you get a good deal.

 

[diamondringlover]

I would not even hesitate...wow what a generous offer.

 

[purselover]

No I'd be way too scared of strings and bad feelings amongst everyone. Like it has been mentioned I would worry about what happens if you want to sell it in the future, as well as a million other little things. Recently my in-laws offered us DH's grandparents house on the cheap and without hesitation we said no way.

 

[Enerchi]

Yes indeedy! I'd take that in a flash... but I'd want an official legal contract drawn up first and read (don't know the proper legal term) but lawyers on both sides. I agree with the concern about things 'going south' and if there were a legal contract, that would hope to avoid that.

No mortgage payments? owning your own home - and you would make it yours by decor/furniture/garden, etc. - what a thrill so early in your lives together!

Good luck with your decision!

 

[mary poppins]

and they really want to do this for DH and me and our son.

don't look a gift horse in the mouth... (or in this case, a gift house. )

I know this comment was made in jest, but I just have to say that if you decide you're interested in grandparent's offer, it would be prudent to look this gift house in the mouth and everywhere else. Hire an inspector to look at the house thoroughly so you know what you are committing to (or decide not to commit for reasons revealed in the inspection).

ETA: Grandparents have presented quite an opportunity!

 

[rainwood]

You should take the house only if it's something you would have bought for yourself in a location in which that you want to live, and would give you the pride of ownership you're looking for. And only if you are convinced you can deal with all the issues you've already identified. Just because the house is 'free,' doesn't mean it's a good deal. You could end up with a house that isn't you, that you can't remodel without ruffling feathers, that never feels like yours, and that causes a lot of family trouble. And the possibility of resentment of other grandchildren (or maybe even parents and aunts/uncles if their inheritance is reduced) is no small thing. Money does strange things to relationships.

 

[diamondseeker2006]

Wow, what a great opportunity!!! I would discuss with them up front that over time you'd be painting and updating features in the house and if that would bother them, then obviously you couldn't do it. I do wonder about the other grandchildren and how they may eventually feel about this. Could cause problems down the road unless they have other big gifts to give. But yes, being offered a free house is an amazing opportunity. You probably should speak with a tax lawyer about the best way to do it to avoid taxes on the gift, etc.

 

[Amys Bling]

I'd only take it if they would be okay with me renting it out to someone else. Usually there are strings attached and with something such as a house, I seriously doubt it would be a just a nice, no-string gift.

That is what worries me, MC. These things tend to have a way of going south. Resentments seem to come up down the road.

Plus, would it really feel like "our" home?

these would be my worries....

 

[partgypsy]

Yes I would, as long as it was somewhere I didn't mind living, and they were ok with us updating. As far as the other grandchildren, if the time ever came to sell the house even if not required, out of a sense of fairness I would split the proceeds from the sale with the other grandchildren. After all, as long as you live in that house you had the benefit of living basically rent-free in the house which the other grandkids didn't get. I also wouldn't assume that the house was paid off, or didn't have significant problems, or significant HOA dues, etc. It's hard to lose if you are getting a house for free, but it's best to understand all the pros and cons before formalizing it via deed or contract.

 

[dreamer_dachsie]

I would take it and dance a jig and thank the family member every single day.

 

[Jennifer W]

I would take it and dance a jig and thank the family member every single day.

I would too! Also, when the house title transfers, it's yours. You can do anything you wish with it, there is no possibility of strings (short of unusual terms in the missives, but your lawyer should attend to that at the point where the transfer of title is made). Further down the line, with remodels or selling on, there are always nice ways of doing what you want and presenting it kindly to people who would express an interest. Ok, it could cause bad feeling, but at this point, it's a hypothetical problem. Refusing the offer now could also cause bad feeling.

I don't know your grandparents, so of course I could be missing something, but I think it's a kind and generous offer made because they love you and want to give you a little bit of security. We were able to pay cash for our house from an inheritance, and honestly, I'm grateful for that every single day. Whatever happens to us financially, and in this climate, who knows what that could be, we'll always have somewhere nice to live. I know this is a different situation, but the feeling of relief that I got from owning a house free and clear was just incredible, after years of stretching every penny to pay for even rather modest accommodation in a very expensive city. Housing costs were always our biggest expense, and it's not like we ever lived in a palace. When that ended, we were suddenly free to follow hobbies, dreams, a little bit of frivolity, even. I was able to quit a job I didn't enjoy and go to law school, for example. My husband was able to take leave of absence from work when our daughter was born, then work part time for a year. It just made all sorts of things possible that I wouldnt have considered before.

It might not be the perfect house, in the perfect neighbourhood for you, but even when you buy with a healthy budget, you end up settling somewhere along the line, life being what it is. Unless there was something major wrong with it or it was in an area where there was a specific crime or environmental problem, I'd grab it with both hands, personally.

 

[Rhea]

It might be better if you just rent it at a cheap rate which covers all their overhead and expenses, and they retain the title.

Less messy for the heirs, and you get a good deal.

This. Any reason you can't rent it? Or rent to own? It would still help you out financially while being their house if you're worried about strings and the ability to re-decorate.

Is it possible they are concerned about inheritance tax later and are therefore trying to gift you something while they are still living?