More adults returning to old neighborhood, buying parent’s home
Marilyn Kennedy Melia, CTW FeaturesPosted: Monday, May 13, 2013, 10:30 AMSometimes, familiarity breeds content.
There are young adult buyers who want “a home in the neighborhood they grew up in, “says Val Nunnenkamp of Prudential Fox and Roach in Marlton, N.J.
Typically, buyers want to return to their childhood neighborhood because it has good schools and because “they know what to expect from living there,” Nunnenkamp says. “They already are familiar with where to shop [and] what the homes are like in the area.”
Buyers returning to their former turf usually like the homes there as well, Nunnenkamp adds, but that doesn’t mean they don’t want to remodel to meet their current needs.
Some buyers move not just back to the old neighborhood, but actually buy their home from their parents. Then, some re-decorating may be necessary, not just to reflect their own tastes, but to eliminate feeling like they are still ten years old, says Amy Goyer, the AARP home and family expert who herself bought her parents’ home.
Especially in the past troubled economy, Ralph Schumann, real estate attorney in Schaumburg, Ill., says he’s seen adult children purchasing from their parents.
This happens when parents want to move, but don’t want to go through a potentially lengthy sales process, Schumann explains. Children who buy can take away all the bother of preparing a home for sale.
While such a sale won’t require cleaning up for open houses and showings, all the other aspects of sale between parents and an adult child should be like a transaction with a third-party buyer.
“There is a temptation to [give the child] a sweetheart deal,” Schumann says. But unless the price is the fair market value, the IRS could look at the difference between market price and price paid as a gift.
And, notes Schumann, state or local tax entities may come back and demand more real estate transfer taxes, based on what they know the fair market value to be."
** Interested in selling your home, maybe relocating back home? Visit Sell Your Home Today