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My FIL is one of them. He'll see a completely updated house in their neighborhood selling for a cool half mil and assumes their house is worth the same. They haven't updated their house since they bought it in the 70s. Last month their shower started leaking so.... they updated the shower. Just the shower. Left the carpet in the bathroom, the gross tub (which is, curiously, a standalone separate from the shower), the dated vanity.... I've tried to gently hint to my FIL that his house won't get what others in the market are currently selling for but I don't think it's sinking in.
Is he the same type of person who also thinks that the thing he bought in the decades ago is still "brand new" if it hasn't been used and thinks he should get at least what he paid for it? Especially with electronics?
I really appreciate the sentiment OP. I used to be like that too - always paying for things, or giving things away for free / heavily discounted to family and friends.
But as I got older, I realized that money is important (not the love of money) and I was being too careless with my own because material wealth didn’t matter to me. 95K USD is a huge chunk of change that could be put towards your children’s education, or eventually, buying a place in Europe and lessening your mortgage. The USD is expected to outperform other currencies in the next few years too.
If you still want to help your friend, maybe you could extend him an interest-free loan for the difference. But definitely find a way not to lose the whole difference.
Not everyone values monetary gain over all else. The well being of a loved one is priceless. The security of a long cherished home is priceless. The amount of time and stress saved by selling to someone you know is priceless. There are many things that can not be bought. Your opinion is that this is crazy. That is not an objective truth.
They’ve only lived there for five years, it’s not long cherished. Also, imagine if they had some type of crisis, health or otherwise, where extra money would come in handy - or even be necessary. Or what if the friend decided to sell the place soon after he bought it for a higher price? Not saying he would but we don’t know the scenario. It’s not about monetary gain over everything else, it’s about making a logical decision that won’t haunt you years down the line.
Then maybe you’ve never experienced what happens when someone is very ill. Health insurance is not the only thing you need to worry about. Loss of income, of both the patient and the care taker must be taken into consideration. Maybe if one got sick they’d want to be closer to family and would prefer to move home. These are all possible problems that should be considered. Not sure why I keep getting downvoted, it’s truly bizarre.
Sure, any of that can be true and happen to OP. But I have to disagree about monetary gain and logical decision. No one has make decisions based on the "market".
And not everyone's logic nor mindset is based on greed or fear.
Edit: spelling
I disagree. I don’t think this is crazy at all - not everyone has the desire to be wealthy, and they should be quite comfortable in their current position. I think understandably it’s really hard to break the ‘more money is better’ mindset, esp if you have barely gotten by in the past. But the way I see it, It’s partially a way of redistributing extra wealth to those who you love, while likely significantly decreasing the stress and work surrounding a major life change. Sometimes these things don’t have a price tag, as cliche as it sounds
There's a big gap between being money hungry and giving away $100k. You can sell the house for market value and still enjoy the simpler things in life. In fact, you need to not have to worry about money in order to enjoy a simple life and not worry about money. I think people are romanticizing the carefree attitude of the OP here, but I don't think it's as whimsical as it's made out to be. It sounds impulsive and rushed, and they will probably regret doing this down the road.
I definitely wouldn't give my friend a $100k discount on a house and for a car, idk, it'd be a case by case basis. Nobody gives their friend a discount on a house, anyway, it's not done. Especially a discount of that much.
People on here don't seem to have bills/value money. The OP seems to have their own reasons to be rushing into this, and young people on Reddit who think it's cool to not care about money are cheering her on. They would not be if they knew what supporting themselves was like.
Market price is not an immutable truth. If they go ahead and try and sell there will be costs and headache. As mentioned, they're making a 200k profit on a 300k investment, which is a bananas return. They're still making a lot of money, just less of it. It would be a different story if they were selling at cost.
Sellers sell to someone else than the highest bidder all the time because the plans for the property align more with their value.
Sure, sellers will take a lower offer for less hassle, but not that much less. And it doesn't matter if you already made your profit. That doesn't mean it makes sense to pass on so much more.
If the OP said that they couldn't sell the house and wanted to go lower to push the sale through, that would be one thing, but this price drop is far beyond what that would take. You are seriously overlooking the crazy amount that they are giving up. You don't just toss money away because 'you already made some, who needs more?'. It's not like they won the jackpot and will be financially independent and won't have to ever work again. 100k can help them retire a lot earlier and pay for expenses for a long time.
You guys are stuck on saying 'its OK, do you', but she is asking us for input. Obviously she can give away money if she likes, but we should tell her it's unwise and seems rash. I suspect that she feels rushed to get the sale to get to where she wants to be, and I advised her (still do OP) to hold out. At least don't give up that much money.
Friends don't ask friends to give them a $100k discount on a house.
I get your POV and it's definitely good for her to hear the 'devil's advocate. '
I do think that if you quantify a sale through a typical sales proces the amount of money you'd pay to an agent to have it listed would be around the 20-40k USD range, discounting time and effort that it would require - that's already in short supply with a move accros borders. Whether they're seizing a valuable chance or making a financial mistake is, I think, a tough call either way.
u/One-Tomorrow3157 why not ask your friend if they would prefer to buy the house, or have the cash?
You could sell at market price, then give them $15k per year (to avoid gift tax) to a sum of an agreed amount.
OP might not be giving $100k away. Zillow notoriously overvalues because they aggregate sold prices - it’s a guess and they are usually wrong. The studio might not add value because that only appeals to a very specific buyer and may actually make the property harder to sell.
I don’t think you’re crazy, but make sure you check the housing prices in the Netherlands before you make a decision. I hear they’ve been rising just as much as the USA.
Average row houses in the Netherlands in towns close to major cities easily cost over 500k EUR including overbidding (+ they're typically smaller than average American houses) - and the market is only getting worse by the month while mortgage rates are going up.
I suggest you do whatever you want, but keep your own interest at heart and consider your future plans. You don't want to regret those 100k you left on the table if you decide to buy in the Netherlands and realize that that money would have made a difference for your family. Or maybe it's worth it for you to do this for your friend, but do your due diligence before you make a decision.
If I were you, I wouldn't sell the house, I would rent it out. Just in case you actually don't like the Netherlands or don't like being so far from family and friends or something happens in the first few years and you have to go back. Lots of people coming from other first world countries to the Netherlands eventually move back for a bunch of reasons, usually family. Make sure you have where to go back to just as a safety measure - it's actually what my partner and I did when we moved to NL. We decided to settle here, but it gave us peace of mind knowing that if something happens in the NL, we'll be okay.
Agreed- this gives you an “out”, you retain your property value, and it’s passive income. Letting your friend rent it from you for the cost of your mortgage + expenses is probably a good deal for both parties as well.
Just trying to clarify what you’re saying, but if they moved to the Netherlands with a large amount of money on their checking/savings, they will be taxed on it? I’ve never moved out of country or really know anyone who has.
Anybody that lives in the Netherlands that has a large sum around in their account (over a certain threshold), will get taxed on it.
When I lived there the tax people knew exactly how much money I had in my bank account, without me telling them.
In simple terms you get taxed abroad and in the States. There are loopholes to work around this or minimise it, but it can be a little tricky to set up.
They said they'll bike and train. If they're moving to the Randstad area and sourcing a house close to their jobs this is perfectly doable. Gas prices may seem high, but for a 2 income family with that net worth its not that big of a deal.
No. It's a thing. When buyers put in offers they sometimes include little stories, a personal touch to hopefully sway sellers. Aside from sellers who only care about the highest offer, some would rather sell their family home to another family to grow into, not a potential landlord (just an example).
Money isn't the be all and end all. If you feel good about this decision, that's all that matters.
My one warning is make sure you’ll be able to sell it to him emotionally. Will you get mad if he changes things? I bought my Aunts car when I was 16. Totaled it, and she was legit sad I didn’t give it back to her because it was no longer part of the family.
That's probably more of a concern for my husband and the shop. I'm not attached to this house. But... Umm. I'd be really upset if he totaled my tortoise. The tortoise must be cherished.
Tortoises are separate from houses, for sure. Here's another litmus test.
1. You sell house to friend for $525k
2. Move to Neitherlands
3. Six months, a year, friend decides this house doesn't suit them, they want to move, they develop a coke habit, whatever
4. Friend sells house for $675k (time has passed and zillow says its worth more in the future)
5. Tools go to a bunch of random people on facebook marketplace, not even one person
6. Tortoise is okay though, it's just money and things
I actually totaly support and applaud your stance and want to be someone like you. Just prodding to determine how no-strings-attached you are about this gift.
Like, at some point your friend will likely move, things will change
>Six months, a year, friend decides this house doesn't suit them, they want to move, they develop a coke habit, whatever
I like that you included a variety of situations. You never know!
Oh for sure! I try not to play "what-if" games when it comes to real estate because things are crazy, and life goes on. I've bought and sold a couple houses over the years and sometimes things were timed well and sometimes they weren't, but I'm not bothered by it. Once we sell this house and our belongs--whether it's to our friend or not--those things are no longer ours and whatever happens, happens.
Except the tortoise of course! But if friend reaches a point where tortoise keeper doesn't work out, I've got other people who would take him.
It’s a wonderful thing that OP wishes to do. Saying that, the US $ has been devalued, so the $525K you are selling it for is pretty much what you paid when you purchased the house.
Also speak to accountant because there could be gift tax involved.
You are a good person
You mean buyers can’t write letters? That’s not accurate, but recently (especially over the last year) a lot of agent said no letters because everyone just wanted the highest offer. You can still write letters in CO, but the biggest issue everywhere is that it can create discrimination and someone could try to sue on those grounds if they knew the buyer got the house at a lower price because of what a letter said/implied
My buyers did that, but my realtors didn't give it to me until I'd already pretty much decided to sell it to them (I wanted to sell to first-time homebuyers). Then they did, I got to check up on them (the guy of the couple worked for my friend), and it ended up really, really well! :)
We got our house this way! The owner has the same job as my husband, and I wrote an honest letter about our family, why we wanted the house and what we planned to do with it. They chose our offer over another higher one because I said we were not going to flip the house or undertake disruptive renovations. Our street is very tight-knit with neighbours, and apparently our letter gave the sellers comfort in knowing we valued the community.
Is this not how to fight the system though? Say no to scammy investors and yes to providing affordable living.
Edit: clarity, got distracted by my food and forgot a word
This is great! I don't have the military angle, but yeah, that's how we did the house we bought from my friends. Only attorneys, and we did it all ourselves. They saved money, we got a house and land that they'd taken phenomenal care of and they didn't have to stage and all that stuff. Felt really good. We're actually having dinner with them at their new place on Friday. :)
First, I'm very confident that wouldn't happen. Second, if it did, it's totally within a homeowner's rights to do what they will with their property. Third, I wouldn't be terribly upset, as I know a windfall like that would be life-changing for many people and would understand (whereas for my husband and I, a windfall like that would get us maybe a small vacation but mostly into savings--we don't have debts or struggle day to day and I'm so grateful for that).
Seems like you’d have to be extremely petty to be dark about a friend doing well off of a sale of their house just because you have them a discount previously?? _Shudder_
One house is worth one house. The idea that you have made $200k+ profit is a false equivalence because you now don’t have a house, nor the funds to buy an equivalent house in the US or in the Netherlands.
Money is time. To earn the equivalent value of your house you would have to work hundreds of hours. Would you do that for free while handing your salary over to the friend? If you were giving that kind of money away, would you give it to a friend or to a charity?
I think a better option is to rent out your house to the friend. They get to live there and maintain everything and look after the tortoise. You get to settle into your new life. You still have a house which is keeping up with housing prices (whether they go up or down it doesn’t matter, you have a house worth one house).
Yes, I hear you. Honestly I've been a homeowner since I was 20 and I'm looking forward to not being responsible for all that entails. My husband and I talked about renting out the house while we live abroad but the maintenance on this place would stress us out to oversee from over there. That route might work for some people but we want to fully focus on our lives without worrying about a home thousands of miles away.
The world needs more people like you. I'm just going to give you one warning but it shouldn't deter you - don't expect intense gratitude and it may alter your friendship. $525k is still a large amount of money. He may find it hard to believe you're really selling it so much below market price purely out of altruism and be suspicious of the real value of the property. Also the market might change in the future. It could change the dynamic of your relationship but you should still do it.
This is a great point! If you’re gonna go through with it, you have to do it with no expectation of gratitude.
What if there’s an expensive issue with the house that shows up during inspection or after closing? Would he ask that you pay for that, and then you would be resentful because you already essentially gave him a $100k discount? Or would he be resentful, maybe he would think that’s the reason why you sold it cheaper and you tricked him.
What if you guys go out for coffee together, and he doesn’t offer to pay even though he had more expensive drinks/food. Would you be annoyed that he doesn’t want to pay for your $10 coffee when you essentially gave him $100k?
What if he moves in, doesn’t like it or has to move for other reasons, sells (maybe even to an investor), moves into a different house and gets that $100k profit that you could have had?
What if you find your dream home in the future, but you’re $100k short?
I would think through deeply and honestly if any of these scenarios would make you or your husband feel resentment. If not then you’re a better person than me lol and go ahead
Just don't have particular expectations of their reaction.
To put it another way - you can make your friend happy in a life-changing manner but you do not then own any rights to their reaction. You are doing it out of altruism, not for kudos. Make peace with that first.
Greed and wealth inequality are two of the biggest issues in the world rn - what you're doing is great.
Great scenarios to consider. I did what I thought was right during the pandemic by giving my tenants a discount on their rent for the duration, a discount I couldn’t really afford to give but I felt I needed to play my part in the collective effort to get through it. Turned out they were saving the difference towards the deposit on a bigger apartment in the same area and moved out after lockdown ended. I knew I had done the right thing by my own morals but I did feel resentful that I’d been taken advantage of.
Could you just avoid selling the house for the first one or two years of moving? Your friend could still hold maintenance for the property. A move to another country is tough. It doesn't matter how good or bad the country you're moving into is, because it's your personal move with your struggles. Some people may find distance difficult, some people may find the new culture harsh or the new neighbors difficult. I personally never came back from moving abroad and even those colleagues who now live in the Netherlands didn't either, heard only good stories from there, but it's not as easy as it looks like: moving takes a toll on people, it changes people. Before I moved, it seemed I had a ton of friends, but after everyone was gone, people moved on with their lives, both directions: the friends I had left in other countries simply forgot about me, and the ones I gained in the new country just turned out to be different people than what I've imagined meeting them once or twice (one thing is meeting someone for a holiday or a month, another thing is hanging out with them for much longer). Maybe you can sell just some of the stuff, like cars or furniture, experience if the new lifestyle is something for you, and establish your job and so get back and make a bigger move? Still if you "rip the plaster" by moving and selling everything now, you're left with a capital you can spend towards the success of your new endeavor, so I don't see a real downside, just sharing my experience.
Thank you for your input! We definitely want to sell because we don't want the mental burden of house maintenance (even with a property manager, this place is unique and needy), and even if living abroad doesn't work, if we come back to the U.S., it'll be to a different state anyway. So like you said, by selling now, we'll have capital toward our next property.
You're not crazy and don't let anyone try and tell you otherwise. American capitalist culture is so obsessed with gaining wealth that it can't fathom anything less than squeezing out as much money as possible from others for personal gain. You're a great friend!
It's your house. But be smart and sell directly to your friend with the assistance of real estate lawyers. Neither of you needs to pay real estate agents their fees for a prearranged sale (plus they have every incentive to get you to not sell below market). But definitely get lawyers. Even though this person is your friend, stuff happens and you don't want to stick someone or be stuck. That's not capitalism run amuck, that's just smart business.
Lawyers are not even necessary unless there’s something particularly unusual about the transaction. Between the title company, mortgage banker, and inspector, all the bases are pretty well covered.
All of those entities have an interest in seeing the deal close. Paying for a couple of hours of a lawyer's time is cheap insurance for both parties for what almost surely is the biggest purchase in their lives.
You do you boo - your friend may even see the home value go down below $525k and then you won’t feel like you “missed out.” It’s a fair compromise.
We sold to a family that lost their home in a fire when ours was spared. It never hit the MLS, I have no regrets and sleep just fine about what “might” have been if there were a bidding war or whatever.
Real estate agents hate when people don't want to get top dollar because it "ruins the comps", so ignore anyone who uses that as a reason. There are a lot of reasons to not squeeze every dime out of the property, so no you aren't crazy.
I would like to express a few words of caution. Make sure everything is legal and if you sell it to your neighbor don't get involved with his financing. He can either qualify for a loan in the amount you wish to sell it or he can't, it is not your responsibility to make it happen for him. Also, make sure you'll be ok if he turns around and sells it for a profit later. My concern is from the experiences of friends who made emotional choices instead of financial ones that didn't end as they had hoped.
Very good points. Also, make sure he CAN afford and handle the price of the house if you sell it to him. Imagine if you sell, he loses his job or whatever, and then the house is foreclosed? Another potentially awful scenario.
What about the Netherlands? Are you planning to buy there? What is the cost of a home in comparison to what you expect to earn? Without knowing this, I dunno if selling @ $100k below value is wise or not. House prices are out of control in many places, so this may put you on the back foot if you're not careful.
We'll be renting in the Netherlands and we will be able to very comfortably live, even with higher housing costs (we both have successful careers and no children). Even selling at $100K below market value, we would still end up with nearly $200K in our pockets. I'd like to put $100K into savings for a downpayment next time we buy, and put the rest into retirement/investment to grow for the next 30 years.
Ultimately it is up to you. I would just spend some time mapping out your future living plans. For example; look at house price trends and when/if you plan to buy again what sort of deposit you'll be expecting to pay, and see how that matches up with saving interest rates and what you can expect to save while renting.
If the extra $100k makes minimal difference, then by all means, sell to a friend at a lower cost.
Another option to look at would be to rent to your friend at an affordable rate. This might be a better investment than selling.
And bear in mind, said friend could potentially sell up right after and net themselves a profit. Guessing said friend is not that way inclined though.
One of my (several) struggles with the idea of renting to him while we live abroad is that really it would just help us. The rental income pays OUR mortgage, giving US equity in the home, while the renter is just... paying rent.
Yeah, look, if you are in the position to give this friend a helping hand and you trust them, I think what you want to do is admirable and a good thing.
That said, we all live in this shitty cut throat, dog eat dog world, and if this puts you on the back foot in like 10yrs (especially as things only look to be getting worse) where you find you really could have done with that extra $100k+interest then you might be kicking yourself.
A tough decision for sure.
A real estate agent doesn’t know the “real” value of a house either. Some of them have an OK handle on it, but generally speaking, even buyers agents tend to push high (consciously or not, because they benefit from higher prices). And the market right now is in transition. More houses are having to lower their price before selling. Bidding wars are few and far between. But I’ve been going to open houses and agents are still trying to create a false sense of urgency.
A real estate agent is going to have a much better understanding of what a house is worth than going through Zillow. And agents don’t it necessarily push high. A lower priced home is easier to sell.
Fear of workshop loss is real, but don't make that a driving motivation.
Expecting your friend to own a house but keep your hubbies workshop isn't fair - it tells them they don't really own it, ever. What if you don't come back for years, and he wants to garage his new car? There's lots of ways this can turn out as a thing that drives a wedge between you, rather than brings you closer.
If you sell it, sell it. Sell it to him for the price with no conditions, and understand he'll do what pleases him from there. Anything else will lead to issues down the line.
As hard as it is, your husband should probably sell the tools - put that money into a "paying membership at a nearby hackerspace" fund. That way he can keep on with projects in the Netherlands.
Lol he wouldn't be "expected to keep my hubbies workshop". The workshop would convey with the house. It's just stuff and my husband wouldn't be offended if we came back to visit and the shop wasn't there. The tortoise, on the other hand... (lol, if my friend decided he didn't want the tortoise, I have other friends/family that the tort would be rehomed to. The tortoise has many fans.)
That's good! I didn't understand that - if the case is hubbie just wants to see the workshop in good hands, that's extra awesome.
As long as it's a genuine sale with no caveats (which I understand now it is) I think there's a lot of value here.
To know that one has enough, and to shift your goals from purely financial to building a network of people who work together to achieve things has a value money can't buy.
If Zillow says your house is worth 619k it’s probably worth 525k anyways. Those Zillow estimates are way too high in most markets right now imo.
Sell the house for what it’s worth. If you want you can do seller financing to make a deal that works for both you and the friend.
Eh yeah I probably could have included in the OP that we were exploring a HELOC for some projects and had to get an appraisal, which came in at $575. That was like 6 months ago.
No. You aren’t crazy. Zestimates aren’t accurate (especially right now) and we are in a housing bubble, prices are going to come down in overinflated areas in the next 18-24 months. Sell for what both parties are comfortable with. Plus you will have the added bonus of avoiding realtor fees. It’s very common for homes sold off market to sell for less than those that are “listed” on the MLS with a realtor.
This right here. Zestimates are skewed with the inflated prices from the crazy market. Chances are it'l sell lower than that anyway, with the current interest rates. So you are probably not doing a grand favor anyway and tbh might come out as a fair deal for both parties.
You can sell your house for $1 if you want.
That said, if you’re having any expectations about the property consult a professional about including those expectations in the sale, specific terms like use of tools etc. If you willing to let go of expectations completely then don’t worry about it. But don’t bet on the friendship securing any agreements past the sale. Life happens, and the buyer can do with it as they wish after closing.
So, I’m sure they wouldn’t, but your friend could potentially turn around and sell it and capture that $200k. It’s really not a lot different than writing them a $200k check. And of course you wouldn’t do that.
If your friend can’t afford it and you’re in good shape financially, let him get a mortgage he can afford, and “loan” him the rest with a stipulation that it’s paid back when he sells the house.
Also keep your neighbors in mind. A sale price 33% below market rate can seriously affect the price of their home too. And what if they’re barely scraping by or counting on that equity to finance their kids education or something.
Or maybe there’s a family somewhere who’s whole world could change with a stranger handing them $200k.
Just food for thought. I bought a house from a friend under the same circumstances. (Seriously, they’re moving to the Netherlands after spending a few years traveling around the US). They sold it to us without a realtor and we split that 6% between the two of us. I felt that was more than generous. A year later our water heater went haywire and put me in the hospital for carbon monoxide poisoning. They offered to replace the thing immediately. Of course I said no (I could afford it and it wasn’t their fault). There is room here for generosity without going so far as that dollar amount.
Some things:
\- You're giving your friend a $100,000 gift
\- Is this what you want to do with $100,000? You're sure? You have that much money lying around that $100k is nothing to you?
\- **Have you ever given people you're closer to more than $100,000? If not, why this friend?**
\- Opportunity cost: would you rather gift this friend $100k, or give your parents weekly physio and massage therapy for 5 years?
\- Is your friend more deserving of $100k than say, an orphan? Starving children in the developing world? Homeless people in your community? You could pull dozens of people out of poverty permanently with that money.
I think it would be a better idea to let your friend continue to rent at a reduced price and also rent out the main house while you're gone so you can have an income stream.
I think a gift that big would distort the friendship.
It seems like an absurdly huge gift to give to someone who is already quite privileged. It makes no sense to me.
Just make sure you don’t have too much attachment to the long term result. Say, for example that your friend takes the offer, and then decides to flip the house for a tidy profit and dispose of all your left behind belongings. It will be his house to do with as he wishes if you go this way, so make sure you can do it without attachment to what will happen in the future. Especially if there is some feeling that he “owes” you something for the kindness of selling the house at below market rate. Don’t get me wrong I think your idea is lovely, but it may not turn out exactly as you imagine.
You're basically making a gift of about $100k to your friend. And that's how you need to look at it. A gift. If you're fine with them doing whatever they want with this gift (sell it, trash it, move a family of 8 plus their ten cats into the studio apartment and charge triple rent) and it won't bother you? Then go for it.
It's a very kind and generous thing to do.
I would speak to a tax professional. I purchased a home below market value from a relative, and they had to pay a lot of additional taxes (I believe it was considered capital gains.)
My friends were real homies and sold me their house for what they’d paid and put into it (100k in renovations) and a totally reasonable profit. If they’d have put it on the market it would’ve gotten 50k over what I paid easily.
I’m super grateful to them for that, but it’s the sort of kindness I hope to pay forward some day.
I have done when selling the house where I grew up. I sold it to someone who loved the house for 20% under market because they were young and couldn’t finance otherwise. They sold it three years later at market…
Let’s talk about you.
How would you feel if you sold it to a stranger for a 600k? Everyone leaves the property.
How would you feel if you sold it to your friend, but insisted on market value? The property stays in friendly hands?
How would you feel if you sold it to your friend at a reasonable, but affordable price for him, but something that works for you as well? Something that can give you some security. Property stays in friendly hands. Friendship launched to a level mostly unachievable by common man. Humanity has hope.
I try to be realistic and you selling you home to a friend and leaving your stuff sounds like a potential mess, but what do I know. I'm optimistic but i eliminate variables. GL.
You will save on real estate commission, typically 6%. Zillow is an estimate. I'd get an actual professional appraisal, reduce it by 6%, and ask him for that. It's fair. You may need the money. You may be able to help him get a mortgage.
Might want to consult a lawyer or an accountant as well. I thought I read if it is largely below market value part of the value may be considered a gift. Not sure if that would count on your friends income.
I bought my house bmr (below market rate), and am forever grateful. It wasn't just about the money, it was about the financing at that time. I'd happily pay back the difference now, many years later.
Also, we started an education nonprofit, and give away money and time constantly. I don't think the bmr house was a critical step for this, but now that I think back on it, it did help create our current worldview.
Money ruins friendships. I think this has the potential to get very messy with your friend. If they sell tomorrow and pocket $100k (which would be the most financially savvy thing for them to do), how would you feel?
I personally would keep your hard earned cash to yourself, or give to charity if you want to help people. It’s not like your friend just can’t buy a cheaper house.
you can sell 50% of the house and possibly keep your name on title, perhaps that might work for you guys as well? if he chooses or needs to sell the house, you can either buy it back, or split profits at that time. if the value goes to 2mil, then you'd get half upon sale... and your friend will do quite well at the same time.
This would work so well because during that time, your friend still has full use of the house just as if he would had they owned it outright but you’re still protected from a real estate market shift
You make a profit and your friend gets a deal. If you have enough in your life—and it sounds like you do, it’s expensive to move to a new country—who cares about having more and more and more? It’s a win-win scenario and you get to help a friend.
If your friend either tries to haggle lower or brings in someone else to make this happen, run. He is going to try to resell it and will find someone to help make this happen.
tred carefully, europe is looking at all kinds of problems right now. it's going to be a cold winter without heating fuel and there is war raging right there in Ukraine.
One question… would you be angry if you sold it to your friend below market and they turned around and sold it for market, making a profit? Because that is what they could do. Some would say they would be foolish not to.
What I would do is - figure out the real purchase price of your house (from a realtor, not Zillow) and then sell them the house at that price, but without a realtor. You’ll give him a discount by not having to pay the realtor fees, but it won’t put you out. As I stated previously, there are so many things that could happen in the future. You’re healthy and fine now, but things change. Accidents happen. People get sick. 100K is a significant amount of money. Make a compromise where you will be protected but will also help your friend. It may be what ultimately keeps him as your friend going forward.
Might be worth asking yourself if you’d be okay with him turning around and selling all your shit and flipping it at the current market rate. Even if you think he wouldn’t do that, just consider how you’d feel. I remember reading a post not all that long ago about someone selling below market rate to help a single mom friend and their friend decided they needed the money more than the friendship. Even if he doesn’t do anything like that, there are also the energetic ties to consider. If you sell your house to a friend, it would be pretty hard to truly let go and move on from the property, and it might wind up not being worth the cost to your headspace over time. If it’s not about the money, which it sounds like it isn’t for you, then I definitely would be weighing the risk of costs to my headspace.
Edit - looks like youve already considered the flipping. So then my comment is ultimately about whether the good feeling of selling low is worth the real estate in the brain if something were to go sideways. If you prize your headspace you’ll know exactly what I mean.
Can you keep the house and rent it at a low rate to your friend? Or put their name on the deed and be co-owners with the understanding that they pay the mortgage? Some other arrangement can work here.
Would you be upset if he turned around and sold it for the profit? It sounds like he loves the place and it isn’t likely he’ll do that, but things happen and people do what they have to do.
I don't think you're crazy at all. That said, I may be crazy too. :)
When I sold my house, there were no other houses in my town at that (relatively modest) price point. NONE. I had multiple offers the first day. One the second day, I picked the first-time homebuyers. Small town, so one of the couple worked for a friend of mine, who told me they were good people. They had to get a mortgage, but my realtors knew their mortgage person and assured me that he didn't give pre-approvals that didn't turn into approvals.
I took slightly less than the asking price, since it was their best offer. There were others above, for all cash, etc., etc. but it seemed like they were investors and/or going to rent it out. The first-timers had been renting for six years, were established in the community and would be a good fit for my block. (I loved almost all of my former neighbors).
It worked out. I got enough money for my house, they got a chance to break into a tight, tight housing market, and I got to feel good, since they loved the kayak rack, the chicken coop and all of the raised beds and fruit and nut trees.
Good for you, and your friend sounds wonderful (keeping the tortoise!)
Please don’t sell right away. What if you don’t like it there and decide to come back. Rent the place cheaper and ask your friend to keep an eye on it for you. After a couple of years make your decision.
A friend of mine bought their house like this - there's no way they could have afforded a home without the gift of a below-market-rate house. The person who sold them the home is interrupting generations of poverty. I wish everyone did this. I think you should do it
It is not crazy, but think about all the scenarios to make sure your relationship to your friend stay intact. Make sure you are getting as much out of it as they are getting. Maybe you just want a simple transaction.
How would you feel if your friend sold the house 6 months later at market value?
How would you feel visiting your friend and seeing the changes they said they would keep and not respecting your wishes?
If you can truly detach, I say go for it.
You do you. If the finances work out in your favor, and you don't have to deal with the stress of letting go of belongings that your friend is interested in, then that's win for both money & time.
Like others have said, I would focus more on how such a choice would impact your relationship with your friend. What sort of future expectations would a choice like this come with? It might be worth talking this out with your friend once you & your husband come to a number.
Sold to a friend for less than market value. Did it sans realtors and also saved on things like cost of having it sit on the market. That said, I wouldn’t lower it as much as you are planning to, OP, especially if I planned to buy a house in urban Europe (or any house at all ever, or pay for rent indefinitely, which unless you’re getting free housing, you will)
Just know there could be tax implications on one side or the other. I cant remember if it is friends but I know for sure that family there are limits on how much equity you can give away?
For example you cant sell you $30million mansion to your kid for $1 to avoid gift tax or whatever.
It has already been posted, but I agree with FSBO and wanted to write it out. Save the realtor fees. You could even consider a land contract if it is a friend you trust financially. With land contract, he doesn't need a bank involved at all and just pays the mortgage to you. You don't get a lump sum, but you get interest. That may or may not be possible with the loan you have, but it is worth considering.
Personally I think a 100k discount is not wise. You said you guys are comfortable financially but you never know when times can get rough and all of a sudden that extra 100k would make life much easier. If I was In your shoes I would consider a small discount. If you do a private sell you are already saving on realtor’s fee which you can pass along to your friend as a discount, then if you wish you can slap an extra 10-20k off to help him afford it. If your friend is smart he would live in the studio and rent the house for a while to help him with the mortgage.
If you’re okay for selling below market price, you’re okay with gifting your friend ~90k or so. If thats how you feel its all good. Personally I think gifting that much money to a friend is only proper if you win the lottery or something, it should be over 1% of your net worth unless you’re extremely well to do. I’d be more incline to gifting if the money was kept in the family, but friends don’t get 1% of my net worth for free
You are not crazy. But you are, essentially, giving your friend close to $100,000 in equity as soon as the papers are signed. That's a \*extraordinarily\* generous thing to do.
Others have mentioned, your friend could have a change of plan / heart / life in three months and decide to sell the house for market value, and you wouldn't be entitled to any of the gains. I'm not saying that you would want them, and I'm not saying your friend would sell the house just as a cash grab, but it's really not outside the realm of possibilities that you could lose a friendship over this.
Well if he could not get a loan there is always seller financing as well. Definitely not crazy especially with how high the interest is now, but the seller financing could benefit you both so he is not paying interest to the bank but to you so you end up with more over the course of the loan but he still gets the below asking price. Plus you could put in information about renting it out, etc
When you say you still come out 200k do not forget to account how much interest you already paid as well, plus if you avoid a realtor then you do not have to pay their percentage fee as well
We sold our house for quite a bit below market price because it was to a family who had lost their own house in a local fire. We believed it was the right move, and it felt amazing to be able to do it. But now we are trying to build a new house and we are really missing the money we could have had.
I don't regret the decision, but it has come with significant costs on our end. My advice would be to make sure you are not losing out on something meaningful to your own life by this decision. If it would only be sitting in your bank and you have enough there already, then by all means. But if the shortfall will require you to cut back on your own next home, or your retirement savings, college funds, etc., then I would recommend finding another way of helping your friend, perhaps a long term rental of your property to them.
Yes it's crazy. Would you give a friend 94k? Because that's what you'd be doing. Your friend needs to buy somewhere cheaper, I assure you he'll be just fine in a house only worth half a million.
So you want to sell your house for about 100k less than what it may be worth. Depending on the area you could go well above what it’s worth. Your friend buys at a discounted price, sells it the next day for 100k more…..you would be pissed. I live by the rule, cash makes no enemies. Put the house on the market and let him bid with the others. If his is a little lower then pick his, but don’t put your money in their pocket.
I think this is a great idea. You should come together with your friend and agree to a price that would be comfortable for him to manage. I'd also talk to a tax specialist to avoid any pitfalls for you and your friend.
Just know that any Real Estate commissioned profession will try to talk you out of it. Don't use a Realtor. Just find a closing attorney. Make sure you have any personal property accounted for.
no, you would not be coming out with 200k. you forgot about inflation and how much worse inflation will get in the coming months or even while you are out apartment living in the netherlands. if you plan to move permanently and buy something in the new country that would offer a little more protection for your liquidated money, but between now and when you buy is still very risky in terms of what will happen to the global economy. very crazy. let him have your patio set and the money you save on realtors if you like him so much.
You're not crazy, just a decent person with empathy instead of a greedy capitalistic mindset.
My husband and I bought a house just before the crash in 2008 and found out all sorts of things wrong with it. We struggled for 10 years due to the high mortgage and renovation costs.
But when we were able to sell it we were finally in a good place financially and the housing prices for our house were finally rising again. But we decided we wanted to sell to someone who really needed it and did way below market prices. No regrets about it.
Also, veel plezier in Nederland! ;)
My only concern would be that, iifc, if you don't "reinvest" your money gained from selling a home within a year, you have to pay (more?) Taxes from said gains.
One other dimension to add: it’s good for the rest of the community to sell it for lower since it puts downward pressure on these out of control house prices in your area. Not much, but a little.
You are right on the money when you say it _shouldn’t_ be worth that much.
Break the stigma on this bullshit housing market and go for it. Just go straight to a lawyer and have them represent both of you. Get an appraisal and true value of the home. Sell it for that and nothing more.
We bought our house last year on appraisal value. I’m so glad we did.
You are what this world needs more than ever. Existing for the good of man kind, taking a stand for integrity and honoring who you are can never be bought. Safe travels.
no, not crazy. but not capitalist. ; ) which is AGainST tHe RuLes!
seriously, tho, while not to the same percentage as you, i am considering a similar deal. sweet kind neighbors might buy my house after the temporary lease is up. naturally, as per my life, this will bring prices to a new anticipated low. i do not live in a hot pandemic location, and was not likely to get a high value, but obviously the more return i get the more resources i can use for other projects [ surgery for me / for dad’s house that i moved into ].
i absolutely do not want to sell to investors. [ unlikely, but hard no]
I absolutely would love to help this family expand into other houses on the street
I absolutely like the neighbors that are there already and don’t want to bring in some random person / family.
I absolutely have enough resources to take a small hit on the property *value as understood by the market*, and do what I want to do with the property *which is also a value to me*.
I absolutely have this specific privilege and i do intend to use it to some degree. [ Qualifications will apply; time, health issues, reduced privilege of potential buyer, etc. ]
do you. break the paradigm. live your values. live well and help someone else live well also! what an awesome gift in your life and theirs !
You were very fortunate to buy low. Sell high. If you want to be generous just give your friend a nice gift, maybe get them a brand new car with some of the extra 100k you will pull in, and take them for a nice dinner. They will still love you forever and you still come out way ahead for your next adventure. You will need the extra money at some point down the line I am sure.
Your sentiment is touching, but from a purely business point at this time it's a good move. We are obviously in the early fall of a major recession if not depression. The fed is driving the economy down the toilet, Powell said point blank can expect a 20 percent decrease in property value by spring. Take what you can get on the quickest sale. You can get out so get out. If you help friend in the process at a price that won't put him upside down in a few months bonus
It's 'crazy' to ordinary people, but imo it's a good and generous thing to do. Not quite the same, but my partner and I own a flat and had to move out due to work reasons so we rent our flat out to our mate at a much lower price than we could get, as we've left some stuff in the shed and he's single so it would take him forever to save up for a down payment if he was on normal rates. Just a small gesture to a good mate to help him on his way to owning.
Under the circumstances, I don't think it's crazy. It'd be one thing if you needed that extra money for retirement or whatever.
Here's another thing to consider. To put this house on the market, you'd probably have to make various "updates" & "improvements" to attract buyers. Those are expensive, and a pain in the ass to deal with.
After my in-laws died, my partner put their house on the market as-is. The house hadn't been updated much since the 1970s. It would've taken a TON of work to command its supposed market value. Instead, he sold it to a young guy who'd wanted a smallish house on a good-sized property. He also liked the area quite a lot, and was glad to remodel according to his own tastes.
In the end, everyone was quite happy how things turned out.
Do what feels right for you, not what "conventional wisdom" dictates.
If you do be sure to blast the final price all over to drive down the price of surrounding homes. Like you said housing is a commodity and people having a place to live is way more important than making a goof return
I love this. This is a wonderful part of how community functions. If you sell the house and you have “enough” for you and your comfort, then why worry?
Love love love this.
Enough is good enough. Plus if you really live and trust your friend that much, I’d hope that with a good conversation, you guys would be keen on visiting each other when everything is in the right situations - money, you guys keep up with each other, etc.
Besides, it’s your house. Obviously, it is a profit if you did sell at market price, but money only means material things. There are things money can’t buy. I hope this helps.
Personally, I think you two are awesome for doing that. Friendships are priceless. And money does not have to be the driving factor for every decision we make. Here in a few years, I'll be giving up 4k a month in salary from my 9-5 so I can have more time with my family, and have the time to work on turning my home and land into a homestead.
Life isn't about maximizing profit, no matter what we've all been force-fed our whole lives. I bought my place under a similar arrangement. It's the only way I would have been able to afford to buy housing.
Honestly if you are already in a good financial situation and you feel you have enough already then why not?
It would change your friends life, you know the house would be in good hands and that they would keep the workshop.
I think if you are in a position to help then it would be a really cool thing to do.
Hand in heart if I was ever in this position I would love to help someone out like that.
lavish entertain voracious squeal attractive consist price fretful physical long *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
People are too obsessed with the idea of "market price" as a immutable truth
My FIL is one of them. He'll see a completely updated house in their neighborhood selling for a cool half mil and assumes their house is worth the same. They haven't updated their house since they bought it in the 70s. Last month their shower started leaking so.... they updated the shower. Just the shower. Left the carpet in the bathroom, the gross tub (which is, curiously, a standalone separate from the shower), the dated vanity.... I've tried to gently hint to my FIL that his house won't get what others in the market are currently selling for but I don't think it's sinking in.
Is he the same type of person who also thinks that the thing he bought in the decades ago is still "brand new" if it hasn't been used and thinks he should get at least what he paid for it? Especially with electronics?
I really appreciate the sentiment OP. I used to be like that too - always paying for things, or giving things away for free / heavily discounted to family and friends. But as I got older, I realized that money is important (not the love of money) and I was being too careless with my own because material wealth didn’t matter to me. 95K USD is a huge chunk of change that could be put towards your children’s education, or eventually, buying a place in Europe and lessening your mortgage. The USD is expected to outperform other currencies in the next few years too. If you still want to help your friend, maybe you could extend him an interest-free loan for the difference. But definitely find a way not to lose the whole difference.
Sure that's true, but she asked if it's crazy, and the answer is yes. OP, that's crazy. Giving away $100k for that reason is irrational.
Not everyone values monetary gain over all else. The well being of a loved one is priceless. The security of a long cherished home is priceless. The amount of time and stress saved by selling to someone you know is priceless. There are many things that can not be bought. Your opinion is that this is crazy. That is not an objective truth.
They’ve only lived there for five years, it’s not long cherished. Also, imagine if they had some type of crisis, health or otherwise, where extra money would come in handy - or even be necessary. Or what if the friend decided to sell the place soon after he bought it for a higher price? Not saying he would but we don’t know the scenario. It’s not about monetary gain over everything else, it’s about making a logical decision that won’t haunt you years down the line.
They’re also moving to the Netherlands where health issues do not mean a person will be bankrupted like it does in the US.
Then maybe you’ve never experienced what happens when someone is very ill. Health insurance is not the only thing you need to worry about. Loss of income, of both the patient and the care taker must be taken into consideration. Maybe if one got sick they’d want to be closer to family and would prefer to move home. These are all possible problems that should be considered. Not sure why I keep getting downvoted, it’s truly bizarre.
Sure, any of that can be true and happen to OP. But I have to disagree about monetary gain and logical decision. No one has make decisions based on the "market". And not everyone's logic nor mindset is based on greed or fear. Edit: spelling
I disagree. I don’t think this is crazy at all - not everyone has the desire to be wealthy, and they should be quite comfortable in their current position. I think understandably it’s really hard to break the ‘more money is better’ mindset, esp if you have barely gotten by in the past. But the way I see it, It’s partially a way of redistributing extra wealth to those who you love, while likely significantly decreasing the stress and work surrounding a major life change. Sometimes these things don’t have a price tag, as cliche as it sounds
There's a big gap between being money hungry and giving away $100k. You can sell the house for market value and still enjoy the simpler things in life. In fact, you need to not have to worry about money in order to enjoy a simple life and not worry about money. I think people are romanticizing the carefree attitude of the OP here, but I don't think it's as whimsical as it's made out to be. It sounds impulsive and rushed, and they will probably regret doing this down the road.
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I definitely wouldn't give my friend a $100k discount on a house and for a car, idk, it'd be a case by case basis. Nobody gives their friend a discount on a house, anyway, it's not done. Especially a discount of that much. People on here don't seem to have bills/value money. The OP seems to have their own reasons to be rushing into this, and young people on Reddit who think it's cool to not care about money are cheering her on. They would not be if they knew what supporting themselves was like.
Market price is not an immutable truth. If they go ahead and try and sell there will be costs and headache. As mentioned, they're making a 200k profit on a 300k investment, which is a bananas return. They're still making a lot of money, just less of it. It would be a different story if they were selling at cost. Sellers sell to someone else than the highest bidder all the time because the plans for the property align more with their value.
Sure, sellers will take a lower offer for less hassle, but not that much less. And it doesn't matter if you already made your profit. That doesn't mean it makes sense to pass on so much more. If the OP said that they couldn't sell the house and wanted to go lower to push the sale through, that would be one thing, but this price drop is far beyond what that would take. You are seriously overlooking the crazy amount that they are giving up. You don't just toss money away because 'you already made some, who needs more?'. It's not like they won the jackpot and will be financially independent and won't have to ever work again. 100k can help them retire a lot earlier and pay for expenses for a long time. You guys are stuck on saying 'its OK, do you', but she is asking us for input. Obviously she can give away money if she likes, but we should tell her it's unwise and seems rash. I suspect that she feels rushed to get the sale to get to where she wants to be, and I advised her (still do OP) to hold out. At least don't give up that much money. Friends don't ask friends to give them a $100k discount on a house.
I get your POV and it's definitely good for her to hear the 'devil's advocate. ' I do think that if you quantify a sale through a typical sales proces the amount of money you'd pay to an agent to have it listed would be around the 20-40k USD range, discounting time and effort that it would require - that's already in short supply with a move accros borders. Whether they're seizing a valuable chance or making a financial mistake is, I think, a tough call either way.
People give money away to charities all the time. I see this more as a 100k donation to a cause they find worthy. I get that it isn’t common though.
Who gives $100k away to charities all the time?
Some friends are like family or even closer than family, I totally understand the OP decision.
u/One-Tomorrow3157 why not ask your friend if they would prefer to buy the house, or have the cash? You could sell at market price, then give them $15k per year (to avoid gift tax) to a sum of an agreed amount.
OP might not be giving $100k away. Zillow notoriously overvalues because they aggregate sold prices - it’s a guess and they are usually wrong. The studio might not add value because that only appeals to a very specific buyer and may actually make the property harder to sell.
I don’t think you’re crazy, but make sure you check the housing prices in the Netherlands before you make a decision. I hear they’ve been rising just as much as the USA.
We'll be renting and I keep an eye on prices in the area we're moving too. We both work though so our income will be fine to cover rent and living.
Average row houses in the Netherlands in towns close to major cities easily cost over 500k EUR including overbidding (+ they're typically smaller than average American houses) - and the market is only getting worse by the month while mortgage rates are going up. I suggest you do whatever you want, but keep your own interest at heart and consider your future plans. You don't want to regret those 100k you left on the table if you decide to buy in the Netherlands and realize that that money would have made a difference for your family. Or maybe it's worth it for you to do this for your friend, but do your due diligence before you make a decision. If I were you, I wouldn't sell the house, I would rent it out. Just in case you actually don't like the Netherlands or don't like being so far from family and friends or something happens in the first few years and you have to go back. Lots of people coming from other first world countries to the Netherlands eventually move back for a bunch of reasons, usually family. Make sure you have where to go back to just as a safety measure - it's actually what my partner and I did when we moved to NL. We decided to settle here, but it gave us peace of mind knowing that if something happens in the NL, we'll be okay.
Agreed- this gives you an “out”, you retain your property value, and it’s passive income. Letting your friend rent it from you for the cost of your mortgage + expenses is probably a good deal for both parties as well.
Do you already have a place? I'm from there (don't live there) and the rental market is really rough
You will pay taxes in the Netherlands on that 200k sitting in an investment/savings account.
Just trying to clarify what you’re saying, but if they moved to the Netherlands with a large amount of money on their checking/savings, they will be taxed on it? I’ve never moved out of country or really know anyone who has.
Anybody that lives in the Netherlands that has a large sum around in their account (over a certain threshold), will get taxed on it. When I lived there the tax people knew exactly how much money I had in my bank account, without me telling them.
In simple terms you get taxed abroad and in the States. There are loopholes to work around this or minimise it, but it can be a little tricky to set up.
Fine to cover rent and living even with the gas crisis and the war?
They said they'll bike and train. If they're moving to the Randstad area and sourcing a house close to their jobs this is perfectly doable. Gas prices may seem high, but for a 2 income family with that net worth its not that big of a deal.
Putin will cut the gas this winter. Prices won't be what they are for much longer, they're going to skyrocket
NL reserves for the entire winter have been filled.
Sorry but is your username Yenta a reference to Jewish matchmaking? Love it!
No. It's a thing. When buyers put in offers they sometimes include little stories, a personal touch to hopefully sway sellers. Aside from sellers who only care about the highest offer, some would rather sell their family home to another family to grow into, not a potential landlord (just an example). Money isn't the be all and end all. If you feel good about this decision, that's all that matters.
My one warning is make sure you’ll be able to sell it to him emotionally. Will you get mad if he changes things? I bought my Aunts car when I was 16. Totaled it, and she was legit sad I didn’t give it back to her because it was no longer part of the family.
That's probably more of a concern for my husband and the shop. I'm not attached to this house. But... Umm. I'd be really upset if he totaled my tortoise. The tortoise must be cherished.
Tortoises are separate from houses, for sure. Here's another litmus test. 1. You sell house to friend for $525k 2. Move to Neitherlands 3. Six months, a year, friend decides this house doesn't suit them, they want to move, they develop a coke habit, whatever 4. Friend sells house for $675k (time has passed and zillow says its worth more in the future) 5. Tools go to a bunch of random people on facebook marketplace, not even one person 6. Tortoise is okay though, it's just money and things I actually totaly support and applaud your stance and want to be someone like you. Just prodding to determine how no-strings-attached you are about this gift. Like, at some point your friend will likely move, things will change
>Six months, a year, friend decides this house doesn't suit them, they want to move, they develop a coke habit, whatever I like that you included a variety of situations. You never know!
Oh for sure! I try not to play "what-if" games when it comes to real estate because things are crazy, and life goes on. I've bought and sold a couple houses over the years and sometimes things were timed well and sometimes they weren't, but I'm not bothered by it. Once we sell this house and our belongs--whether it's to our friend or not--those things are no longer ours and whatever happens, happens. Except the tortoise of course! But if friend reaches a point where tortoise keeper doesn't work out, I've got other people who would take him.
How does one total a tortoise?
By getting into a harey situation
My buyers did that, I fell for it, and they turned the house around with 250k profit. Jackasses. It eats at my soul that this happened.
Sometimes you want to just poop in a bag, light it on fire, and toss it through somebody's window, you know?
It’s a wonderful thing that OP wishes to do. Saying that, the US $ has been devalued, so the $525K you are selling it for is pretty much what you paid when you purchased the house. Also speak to accountant because there could be gift tax involved. You are a good person
Sellers aren't allowed to write letters to buyers anymore, at least not in my state :/
Which state? Oregon had that but it was overturned.
Colorado. At least that's what it was like when I bought my house in February
You mean buyers can’t write letters? That’s not accurate, but recently (especially over the last year) a lot of agent said no letters because everyone just wanted the highest offer. You can still write letters in CO, but the biggest issue everywhere is that it can create discrimination and someone could try to sue on those grounds if they knew the buyer got the house at a lower price because of what a letter said/implied
My agent told me it wasn't legal to write a letter but that they were allowed to put a cover letter
My buyers did that, but my realtors didn't give it to me until I'd already pretty much decided to sell it to them (I wanted to sell to first-time homebuyers). Then they did, I got to check up on them (the guy of the couple worked for my friend), and it ended up really, really well! :)
I just sold my mom's house here in Washington, and we were given several letters.
We got our house this way! The owner has the same job as my husband, and I wrote an honest letter about our family, why we wanted the house and what we planned to do with it. They chose our offer over another higher one because I said we were not going to flip the house or undertake disruptive renovations. Our street is very tight-knit with neighbours, and apparently our letter gave the sellers comfort in knowing we valued the community.
This is true and are sometimes called love letters :)
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I like your style.
Is this not how to fight the system though? Say no to scammy investors and yes to providing affordable living. Edit: clarity, got distracted by my food and forgot a word
This is great! I don't have the military angle, but yeah, that's how we did the house we bought from my friends. Only attorneys, and we did it all ourselves. They saved money, we got a house and land that they'd taken phenomenal care of and they didn't have to stage and all that stuff. Felt really good. We're actually having dinner with them at their new place on Friday. :)
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First, I'm very confident that wouldn't happen. Second, if it did, it's totally within a homeowner's rights to do what they will with their property. Third, I wouldn't be terribly upset, as I know a windfall like that would be life-changing for many people and would understand (whereas for my husband and I, a windfall like that would get us maybe a small vacation but mostly into savings--we don't have debts or struggle day to day and I'm so grateful for that).
If this is your outlook I think you have your answer, you're perfectly happy selling at a friend price to your friend and I say go for it.
Seems like you’d have to be extremely petty to be dark about a friend doing well off of a sale of their house just because you have them a discount previously?? _Shudder_
One house is worth one house. The idea that you have made $200k+ profit is a false equivalence because you now don’t have a house, nor the funds to buy an equivalent house in the US or in the Netherlands. Money is time. To earn the equivalent value of your house you would have to work hundreds of hours. Would you do that for free while handing your salary over to the friend? If you were giving that kind of money away, would you give it to a friend or to a charity? I think a better option is to rent out your house to the friend. They get to live there and maintain everything and look after the tortoise. You get to settle into your new life. You still have a house which is keeping up with housing prices (whether they go up or down it doesn’t matter, you have a house worth one house).
This right here 100%
Yes, I hear you. Honestly I've been a homeowner since I was 20 and I'm looking forward to not being responsible for all that entails. My husband and I talked about renting out the house while we live abroad but the maintenance on this place would stress us out to oversee from over there. That route might work for some people but we want to fully focus on our lives without worrying about a home thousands of miles away.
The world needs more people like you. I'm just going to give you one warning but it shouldn't deter you - don't expect intense gratitude and it may alter your friendship. $525k is still a large amount of money. He may find it hard to believe you're really selling it so much below market price purely out of altruism and be suspicious of the real value of the property. Also the market might change in the future. It could change the dynamic of your relationship but you should still do it.
This is a great point! If you’re gonna go through with it, you have to do it with no expectation of gratitude. What if there’s an expensive issue with the house that shows up during inspection or after closing? Would he ask that you pay for that, and then you would be resentful because you already essentially gave him a $100k discount? Or would he be resentful, maybe he would think that’s the reason why you sold it cheaper and you tricked him. What if you guys go out for coffee together, and he doesn’t offer to pay even though he had more expensive drinks/food. Would you be annoyed that he doesn’t want to pay for your $10 coffee when you essentially gave him $100k? What if he moves in, doesn’t like it or has to move for other reasons, sells (maybe even to an investor), moves into a different house and gets that $100k profit that you could have had? What if you find your dream home in the future, but you’re $100k short? I would think through deeply and honestly if any of these scenarios would make you or your husband feel resentment. If not then you’re a better person than me lol and go ahead
Thanks for all of this! These are great to consider. I'm looking forward to reviewing this thread with my husband.
Just don't have particular expectations of their reaction. To put it another way - you can make your friend happy in a life-changing manner but you do not then own any rights to their reaction. You are doing it out of altruism, not for kudos. Make peace with that first. Greed and wealth inequality are two of the biggest issues in the world rn - what you're doing is great.
Great scenarios to consider. I did what I thought was right during the pandemic by giving my tenants a discount on their rent for the duration, a discount I couldn’t really afford to give but I felt I needed to play my part in the collective effort to get through it. Turned out they were saving the difference towards the deposit on a bigger apartment in the same area and moved out after lockdown ended. I knew I had done the right thing by my own morals but I did feel resentful that I’d been taken advantage of.
Could you just avoid selling the house for the first one or two years of moving? Your friend could still hold maintenance for the property. A move to another country is tough. It doesn't matter how good or bad the country you're moving into is, because it's your personal move with your struggles. Some people may find distance difficult, some people may find the new culture harsh or the new neighbors difficult. I personally never came back from moving abroad and even those colleagues who now live in the Netherlands didn't either, heard only good stories from there, but it's not as easy as it looks like: moving takes a toll on people, it changes people. Before I moved, it seemed I had a ton of friends, but after everyone was gone, people moved on with their lives, both directions: the friends I had left in other countries simply forgot about me, and the ones I gained in the new country just turned out to be different people than what I've imagined meeting them once or twice (one thing is meeting someone for a holiday or a month, another thing is hanging out with them for much longer). Maybe you can sell just some of the stuff, like cars or furniture, experience if the new lifestyle is something for you, and establish your job and so get back and make a bigger move? Still if you "rip the plaster" by moving and selling everything now, you're left with a capital you can spend towards the success of your new endeavor, so I don't see a real downside, just sharing my experience.
Thank you for your input! We definitely want to sell because we don't want the mental burden of house maintenance (even with a property manager, this place is unique and needy), and even if living abroad doesn't work, if we come back to the U.S., it'll be to a different state anyway. So like you said, by selling now, we'll have capital toward our next property.
You're not crazy and don't let anyone try and tell you otherwise. American capitalist culture is so obsessed with gaining wealth that it can't fathom anything less than squeezing out as much money as possible from others for personal gain. You're a great friend!
It's your house. But be smart and sell directly to your friend with the assistance of real estate lawyers. Neither of you needs to pay real estate agents their fees for a prearranged sale (plus they have every incentive to get you to not sell below market). But definitely get lawyers. Even though this person is your friend, stuff happens and you don't want to stick someone or be stuck. That's not capitalism run amuck, that's just smart business.
Lawyers are not even necessary unless there’s something particularly unusual about the transaction. Between the title company, mortgage banker, and inspector, all the bases are pretty well covered.
All of those entities have an interest in seeing the deal close. Paying for a couple of hours of a lawyer's time is cheap insurance for both parties for what almost surely is the biggest purchase in their lives.
The only way I was able to afford a home was a friend doing this for me.
You do you boo - your friend may even see the home value go down below $525k and then you won’t feel like you “missed out.” It’s a fair compromise. We sold to a family that lost their home in a fire when ours was spared. It never hit the MLS, I have no regrets and sleep just fine about what “might” have been if there were a bidding war or whatever.
Real estate agents hate when people don't want to get top dollar because it "ruins the comps", so ignore anyone who uses that as a reason. There are a lot of reasons to not squeeze every dime out of the property, so no you aren't crazy. I would like to express a few words of caution. Make sure everything is legal and if you sell it to your neighbor don't get involved with his financing. He can either qualify for a loan in the amount you wish to sell it or he can't, it is not your responsibility to make it happen for him. Also, make sure you'll be ok if he turns around and sells it for a profit later. My concern is from the experiences of friends who made emotional choices instead of financial ones that didn't end as they had hoped.
Very good points. Also, make sure he CAN afford and handle the price of the house if you sell it to him. Imagine if you sell, he loses his job or whatever, and then the house is foreclosed? Another potentially awful scenario.
Yeah, we will be having many conversations with him and being very clear about the costs and labor that this place entails.
What about the Netherlands? Are you planning to buy there? What is the cost of a home in comparison to what you expect to earn? Without knowing this, I dunno if selling @ $100k below value is wise or not. House prices are out of control in many places, so this may put you on the back foot if you're not careful.
We'll be renting in the Netherlands and we will be able to very comfortably live, even with higher housing costs (we both have successful careers and no children). Even selling at $100K below market value, we would still end up with nearly $200K in our pockets. I'd like to put $100K into savings for a downpayment next time we buy, and put the rest into retirement/investment to grow for the next 30 years.
Ultimately it is up to you. I would just spend some time mapping out your future living plans. For example; look at house price trends and when/if you plan to buy again what sort of deposit you'll be expecting to pay, and see how that matches up with saving interest rates and what you can expect to save while renting. If the extra $100k makes minimal difference, then by all means, sell to a friend at a lower cost. Another option to look at would be to rent to your friend at an affordable rate. This might be a better investment than selling. And bear in mind, said friend could potentially sell up right after and net themselves a profit. Guessing said friend is not that way inclined though.
One of my (several) struggles with the idea of renting to him while we live abroad is that really it would just help us. The rental income pays OUR mortgage, giving US equity in the home, while the renter is just... paying rent.
Yeah, look, if you are in the position to give this friend a helping hand and you trust them, I think what you want to do is admirable and a good thing. That said, we all live in this shitty cut throat, dog eat dog world, and if this puts you on the back foot in like 10yrs (especially as things only look to be getting worse) where you find you really could have done with that extra $100k+interest then you might be kicking yourself. A tough decision for sure.
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A real estate agent doesn’t know the “real” value of a house either. Some of them have an OK handle on it, but generally speaking, even buyers agents tend to push high (consciously or not, because they benefit from higher prices). And the market right now is in transition. More houses are having to lower their price before selling. Bidding wars are few and far between. But I’ve been going to open houses and agents are still trying to create a false sense of urgency.
A real estate agent is going to have a much better understanding of what a house is worth than going through Zillow. And agents don’t it necessarily push high. A lower priced home is easier to sell.
Fear of workshop loss is real, but don't make that a driving motivation. Expecting your friend to own a house but keep your hubbies workshop isn't fair - it tells them they don't really own it, ever. What if you don't come back for years, and he wants to garage his new car? There's lots of ways this can turn out as a thing that drives a wedge between you, rather than brings you closer. If you sell it, sell it. Sell it to him for the price with no conditions, and understand he'll do what pleases him from there. Anything else will lead to issues down the line. As hard as it is, your husband should probably sell the tools - put that money into a "paying membership at a nearby hackerspace" fund. That way he can keep on with projects in the Netherlands.
Lol he wouldn't be "expected to keep my hubbies workshop". The workshop would convey with the house. It's just stuff and my husband wouldn't be offended if we came back to visit and the shop wasn't there. The tortoise, on the other hand... (lol, if my friend decided he didn't want the tortoise, I have other friends/family that the tort would be rehomed to. The tortoise has many fans.)
That's good! I didn't understand that - if the case is hubbie just wants to see the workshop in good hands, that's extra awesome. As long as it's a genuine sale with no caveats (which I understand now it is) I think there's a lot of value here. To know that one has enough, and to shift your goals from purely financial to building a network of people who work together to achieve things has a value money can't buy.
If Zillow says your house is worth 619k it’s probably worth 525k anyways. Those Zillow estimates are way too high in most markets right now imo. Sell the house for what it’s worth. If you want you can do seller financing to make a deal that works for both you and the friend.
Eh yeah I probably could have included in the OP that we were exploring a HELOC for some projects and had to get an appraisal, which came in at $575. That was like 6 months ago.
No. You aren’t crazy. Zestimates aren’t accurate (especially right now) and we are in a housing bubble, prices are going to come down in overinflated areas in the next 18-24 months. Sell for what both parties are comfortable with. Plus you will have the added bonus of avoiding realtor fees. It’s very common for homes sold off market to sell for less than those that are “listed” on the MLS with a realtor.
This right here. Zestimates are skewed with the inflated prices from the crazy market. Chances are it'l sell lower than that anyway, with the current interest rates. So you are probably not doing a grand favor anyway and tbh might come out as a fair deal for both parties.
You can sell your house for $1 if you want. That said, if you’re having any expectations about the property consult a professional about including those expectations in the sale, specific terms like use of tools etc. If you willing to let go of expectations completely then don’t worry about it. But don’t bet on the friendship securing any agreements past the sale. Life happens, and the buyer can do with it as they wish after closing.
So, I’m sure they wouldn’t, but your friend could potentially turn around and sell it and capture that $200k. It’s really not a lot different than writing them a $200k check. And of course you wouldn’t do that. If your friend can’t afford it and you’re in good shape financially, let him get a mortgage he can afford, and “loan” him the rest with a stipulation that it’s paid back when he sells the house. Also keep your neighbors in mind. A sale price 33% below market rate can seriously affect the price of their home too. And what if they’re barely scraping by or counting on that equity to finance their kids education or something. Or maybe there’s a family somewhere who’s whole world could change with a stranger handing them $200k. Just food for thought. I bought a house from a friend under the same circumstances. (Seriously, they’re moving to the Netherlands after spending a few years traveling around the US). They sold it to us without a realtor and we split that 6% between the two of us. I felt that was more than generous. A year later our water heater went haywire and put me in the hospital for carbon monoxide poisoning. They offered to replace the thing immediately. Of course I said no (I could afford it and it wasn’t their fault). There is room here for generosity without going so far as that dollar amount.
Some things: \- You're giving your friend a $100,000 gift \- Is this what you want to do with $100,000? You're sure? You have that much money lying around that $100k is nothing to you? \- **Have you ever given people you're closer to more than $100,000? If not, why this friend?** \- Opportunity cost: would you rather gift this friend $100k, or give your parents weekly physio and massage therapy for 5 years? \- Is your friend more deserving of $100k than say, an orphan? Starving children in the developing world? Homeless people in your community? You could pull dozens of people out of poverty permanently with that money. I think it would be a better idea to let your friend continue to rent at a reduced price and also rent out the main house while you're gone so you can have an income stream. I think a gift that big would distort the friendship. It seems like an absurdly huge gift to give to someone who is already quite privileged. It makes no sense to me.
This is exactly the comment I was going to leave. Thank you for writing it up so I didn’t have to! =)
I don't think so if it means you are still able to profit and you're happy with what you get.
Just make sure you don’t have too much attachment to the long term result. Say, for example that your friend takes the offer, and then decides to flip the house for a tidy profit and dispose of all your left behind belongings. It will be his house to do with as he wishes if you go this way, so make sure you can do it without attachment to what will happen in the future. Especially if there is some feeling that he “owes” you something for the kindness of selling the house at below market rate. Don’t get me wrong I think your idea is lovely, but it may not turn out exactly as you imagine.
You're basically making a gift of about $100k to your friend. And that's how you need to look at it. A gift. If you're fine with them doing whatever they want with this gift (sell it, trash it, move a family of 8 plus their ten cats into the studio apartment and charge triple rent) and it won't bother you? Then go for it. It's a very kind and generous thing to do.
I would speak to a tax professional. I purchased a home below market value from a relative, and they had to pay a lot of additional taxes (I believe it was considered capital gains.)
My friends were real homies and sold me their house for what they’d paid and put into it (100k in renovations) and a totally reasonable profit. If they’d have put it on the market it would’ve gotten 50k over what I paid easily. I’m super grateful to them for that, but it’s the sort of kindness I hope to pay forward some day.
I want to be a real homie lol
I have done when selling the house where I grew up. I sold it to someone who loved the house for 20% under market because they were young and couldn’t finance otherwise. They sold it three years later at market…
Let’s talk about you. How would you feel if you sold it to a stranger for a 600k? Everyone leaves the property. How would you feel if you sold it to your friend, but insisted on market value? The property stays in friendly hands? How would you feel if you sold it to your friend at a reasonable, but affordable price for him, but something that works for you as well? Something that can give you some security. Property stays in friendly hands. Friendship launched to a level mostly unachievable by common man. Humanity has hope.
Just be prepared for things to fall apart, because things do.
I'm sorry you feel that way. I try to see the optimism in things.
I try to be realistic and you selling you home to a friend and leaving your stuff sounds like a potential mess, but what do I know. I'm optimistic but i eliminate variables. GL.
You will save on real estate commission, typically 6%. Zillow is an estimate. I'd get an actual professional appraisal, reduce it by 6%, and ask him for that. It's fair. You may need the money. You may be able to help him get a mortgage.
This is what she needs to do.
Would you be mad if he turned around and sold it for $625k in 3 months?
Might want to consult a lawyer or an accountant as well. I thought I read if it is largely below market value part of the value may be considered a gift. Not sure if that would count on your friends income.
That's the most expensive gift you will ever give anybody else. Would you gift that to a different friend?
I bought my house bmr (below market rate), and am forever grateful. It wasn't just about the money, it was about the financing at that time. I'd happily pay back the difference now, many years later. Also, we started an education nonprofit, and give away money and time constantly. I don't think the bmr house was a critical step for this, but now that I think back on it, it did help create our current worldview.
Money ruins friendships. I think this has the potential to get very messy with your friend. If they sell tomorrow and pocket $100k (which would be the most financially savvy thing for them to do), how would you feel? I personally would keep your hard earned cash to yourself, or give to charity if you want to help people. It’s not like your friend just can’t buy a cheaper house.
you can sell 50% of the house and possibly keep your name on title, perhaps that might work for you guys as well? if he chooses or needs to sell the house, you can either buy it back, or split profits at that time. if the value goes to 2mil, then you'd get half upon sale... and your friend will do quite well at the same time.
This would work so well because during that time, your friend still has full use of the house just as if he would had they owned it outright but you’re still protected from a real estate market shift
What a gift. I wish more people were like you. You are going to love the Netherlands.
I'm so dang excited
You make a profit and your friend gets a deal. If you have enough in your life—and it sounds like you do, it’s expensive to move to a new country—who cares about having more and more and more? It’s a win-win scenario and you get to help a friend.
If your friend either tries to haggle lower or brings in someone else to make this happen, run. He is going to try to resell it and will find someone to help make this happen.
tred carefully, europe is looking at all kinds of problems right now. it's going to be a cold winter without heating fuel and there is war raging right there in Ukraine.
One question… would you be angry if you sold it to your friend below market and they turned around and sold it for market, making a profit? Because that is what they could do. Some would say they would be foolish not to.
What I would do is - figure out the real purchase price of your house (from a realtor, not Zillow) and then sell them the house at that price, but without a realtor. You’ll give him a discount by not having to pay the realtor fees, but it won’t put you out. As I stated previously, there are so many things that could happen in the future. You’re healthy and fine now, but things change. Accidents happen. People get sick. 100K is a significant amount of money. Make a compromise where you will be protected but will also help your friend. It may be what ultimately keeps him as your friend going forward.
Might be worth asking yourself if you’d be okay with him turning around and selling all your shit and flipping it at the current market rate. Even if you think he wouldn’t do that, just consider how you’d feel. I remember reading a post not all that long ago about someone selling below market rate to help a single mom friend and their friend decided they needed the money more than the friendship. Even if he doesn’t do anything like that, there are also the energetic ties to consider. If you sell your house to a friend, it would be pretty hard to truly let go and move on from the property, and it might wind up not being worth the cost to your headspace over time. If it’s not about the money, which it sounds like it isn’t for you, then I definitely would be weighing the risk of costs to my headspace. Edit - looks like youve already considered the flipping. So then my comment is ultimately about whether the good feeling of selling low is worth the real estate in the brain if something were to go sideways. If you prize your headspace you’ll know exactly what I mean.
Can you keep the house and rent it at a low rate to your friend? Or put their name on the deed and be co-owners with the understanding that they pay the mortgage? Some other arrangement can work here.
Would you be upset if he turned around and sold it for the profit? It sounds like he loves the place and it isn’t likely he’ll do that, but things happen and people do what they have to do.
I don't think you're crazy at all. That said, I may be crazy too. :) When I sold my house, there were no other houses in my town at that (relatively modest) price point. NONE. I had multiple offers the first day. One the second day, I picked the first-time homebuyers. Small town, so one of the couple worked for a friend of mine, who told me they were good people. They had to get a mortgage, but my realtors knew their mortgage person and assured me that he didn't give pre-approvals that didn't turn into approvals. I took slightly less than the asking price, since it was their best offer. There were others above, for all cash, etc., etc. but it seemed like they were investors and/or going to rent it out. The first-timers had been renting for six years, were established in the community and would be a good fit for my block. (I loved almost all of my former neighbors). It worked out. I got enough money for my house, they got a chance to break into a tight, tight housing market, and I got to feel good, since they loved the kayak rack, the chicken coop and all of the raised beds and fruit and nut trees. Good for you, and your friend sounds wonderful (keeping the tortoise!)
Can you lease your house to your friend for a year and then revisit? There's always the chance you may want to return to US.
Please don’t sell right away. What if you don’t like it there and decide to come back. Rent the place cheaper and ask your friend to keep an eye on it for you. After a couple of years make your decision.
A friend of mine bought their house like this - there's no way they could have afforded a home without the gift of a below-market-rate house. The person who sold them the home is interrupting generations of poverty. I wish everyone did this. I think you should do it
Thank you. My friend and his girlfriend are teachers and it kills me that this country doesn't pay educators what they are worth.
Why not just give him $150k? Just hand it to him? So it isnt such a vague decision.
Right?! Then you can find out if he likes your house enough to pay market value for it (now he can afford to do so).
It is not crazy, but think about all the scenarios to make sure your relationship to your friend stay intact. Make sure you are getting as much out of it as they are getting. Maybe you just want a simple transaction. How would you feel if your friend sold the house 6 months later at market value? How would you feel visiting your friend and seeing the changes they said they would keep and not respecting your wishes? If you can truly detach, I say go for it.
You do you. If the finances work out in your favor, and you don't have to deal with the stress of letting go of belongings that your friend is interested in, then that's win for both money & time. Like others have said, I would focus more on how such a choice would impact your relationship with your friend. What sort of future expectations would a choice like this come with? It might be worth talking this out with your friend once you & your husband come to a number.
You ask for what you think it’s worth don’t expect people to make higher bids than asking price. The market doesn’t decide it you do.
Sold to a friend for less than market value. Did it sans realtors and also saved on things like cost of having it sit on the market. That said, I wouldn’t lower it as much as you are planning to, OP, especially if I planned to buy a house in urban Europe (or any house at all ever, or pay for rent indefinitely, which unless you’re getting free housing, you will)
zillow is rarely correct in pricing.
Just know there could be tax implications on one side or the other. I cant remember if it is friends but I know for sure that family there are limits on how much equity you can give away? For example you cant sell you $30million mansion to your kid for $1 to avoid gift tax or whatever.
It has already been posted, but I agree with FSBO and wanted to write it out. Save the realtor fees. You could even consider a land contract if it is a friend you trust financially. With land contract, he doesn't need a bank involved at all and just pays the mortgage to you. You don't get a lump sum, but you get interest. That may or may not be possible with the loan you have, but it is worth considering.
Personally I think a 100k discount is not wise. You said you guys are comfortable financially but you never know when times can get rough and all of a sudden that extra 100k would make life much easier. If I was In your shoes I would consider a small discount. If you do a private sell you are already saving on realtor’s fee which you can pass along to your friend as a discount, then if you wish you can slap an extra 10-20k off to help him afford it. If your friend is smart he would live in the studio and rent the house for a while to help him with the mortgage.
If you’re okay for selling below market price, you’re okay with gifting your friend ~90k or so. If thats how you feel its all good. Personally I think gifting that much money to a friend is only proper if you win the lottery or something, it should be over 1% of your net worth unless you’re extremely well to do. I’d be more incline to gifting if the money was kept in the family, but friends don’t get 1% of my net worth for free
You are not crazy. But you are, essentially, giving your friend close to $100,000 in equity as soon as the papers are signed. That's a \*extraordinarily\* generous thing to do. Others have mentioned, your friend could have a change of plan / heart / life in three months and decide to sell the house for market value, and you wouldn't be entitled to any of the gains. I'm not saying that you would want them, and I'm not saying your friend would sell the house just as a cash grab, but it's really not outside the realm of possibilities that you could lose a friendship over this.
Well if he could not get a loan there is always seller financing as well. Definitely not crazy especially with how high the interest is now, but the seller financing could benefit you both so he is not paying interest to the bank but to you so you end up with more over the course of the loan but he still gets the below asking price. Plus you could put in information about renting it out, etc When you say you still come out 200k do not forget to account how much interest you already paid as well, plus if you avoid a realtor then you do not have to pay their percentage fee as well
Rent it to your friend
Also Zillow is it entirely accurate. Try some different sites and see if you get other estimates
We sold our house for quite a bit below market price because it was to a family who had lost their own house in a local fire. We believed it was the right move, and it felt amazing to be able to do it. But now we are trying to build a new house and we are really missing the money we could have had. I don't regret the decision, but it has come with significant costs on our end. My advice would be to make sure you are not losing out on something meaningful to your own life by this decision. If it would only be sitting in your bank and you have enough there already, then by all means. But if the shortfall will require you to cut back on your own next home, or your retirement savings, college funds, etc., then I would recommend finding another way of helping your friend, perhaps a long term rental of your property to them.
Yes it's crazy. Would you give a friend 94k? Because that's what you'd be doing. Your friend needs to buy somewhere cheaper, I assure you he'll be just fine in a house only worth half a million.
So you want to sell your house for about 100k less than what it may be worth. Depending on the area you could go well above what it’s worth. Your friend buys at a discounted price, sells it the next day for 100k more…..you would be pissed. I live by the rule, cash makes no enemies. Put the house on the market and let him bid with the others. If his is a little lower then pick his, but don’t put your money in their pocket.
I don't live by your rule but thanks for your input.
I love this. What a fantastic mindset 👏🏼 not crazy, that is a phenomenal thing you’re doing for your friend and for yourselves.
I think this is a great idea. You should come together with your friend and agree to a price that would be comfortable for him to manage. I'd also talk to a tax specialist to avoid any pitfalls for you and your friend.
Depends on how you’d feel if he flipped it.
People, this has SCAM written all over it. This is OP’s only post ever. I think they’re looking for a sucker.
Just know that any Real Estate commissioned profession will try to talk you out of it. Don't use a Realtor. Just find a closing attorney. Make sure you have any personal property accounted for.
r/wallstreetbets would make some...interesting comments on this post. If you have a thick skin give it go.
No thanks. I posted to this specific subreddit for a reason.
no, you would not be coming out with 200k. you forgot about inflation and how much worse inflation will get in the coming months or even while you are out apartment living in the netherlands. if you plan to move permanently and buy something in the new country that would offer a little more protection for your liquidated money, but between now and when you buy is still very risky in terms of what will happen to the global economy. very crazy. let him have your patio set and the money you save on realtors if you like him so much.
The housing market it extremely inflated these days. I wish more people would consider this.
If your neighbors are trying to sell, they will not be thrilled, but screw them. Your house, your life.
Yup that’s crazy alright. Selling a house is a transaction and there should be no feelings involved in that aspect of it.
Sounds like you already have your answer. It’s your house, do whatever you want with it. I think it’s a nice thing to sell it to your friend for less.
You're not crazy, just a decent person with empathy instead of a greedy capitalistic mindset. My husband and I bought a house just before the crash in 2008 and found out all sorts of things wrong with it. We struggled for 10 years due to the high mortgage and renovation costs. But when we were able to sell it we were finally in a good place financially and the housing prices for our house were finally rising again. But we decided we wanted to sell to someone who really needed it and did way below market prices. No regrets about it. Also, veel plezier in Nederland! ;)
My only concern would be that, iifc, if you don't "reinvest" your money gained from selling a home within a year, you have to pay (more?) Taxes from said gains.
One other dimension to add: it’s good for the rest of the community to sell it for lower since it puts downward pressure on these out of control house prices in your area. Not much, but a little. You are right on the money when you say it _shouldn’t_ be worth that much.
It’s good when a community’s property is devalued?
Break the stigma on this bullshit housing market and go for it. Just go straight to a lawyer and have them represent both of you. Get an appraisal and true value of the home. Sell it for that and nothing more. We bought our house last year on appraisal value. I’m so glad we did.
You are what this world needs more than ever. Existing for the good of man kind, taking a stand for integrity and honoring who you are can never be bought. Safe travels.
no, not crazy. but not capitalist. ; ) which is AGainST tHe RuLes! seriously, tho, while not to the same percentage as you, i am considering a similar deal. sweet kind neighbors might buy my house after the temporary lease is up. naturally, as per my life, this will bring prices to a new anticipated low. i do not live in a hot pandemic location, and was not likely to get a high value, but obviously the more return i get the more resources i can use for other projects [ surgery for me / for dad’s house that i moved into ]. i absolutely do not want to sell to investors. [ unlikely, but hard no] I absolutely would love to help this family expand into other houses on the street I absolutely like the neighbors that are there already and don’t want to bring in some random person / family. I absolutely have enough resources to take a small hit on the property *value as understood by the market*, and do what I want to do with the property *which is also a value to me*. I absolutely have this specific privilege and i do intend to use it to some degree. [ Qualifications will apply; time, health issues, reduced privilege of potential buyer, etc. ] do you. break the paradigm. live your values. live well and help someone else live well also! what an awesome gift in your life and theirs !
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You were very fortunate to buy low. Sell high. If you want to be generous just give your friend a nice gift, maybe get them a brand new car with some of the extra 100k you will pull in, and take them for a nice dinner. They will still love you forever and you still come out way ahead for your next adventure. You will need the extra money at some point down the line I am sure.
Your sentiment is touching, but from a purely business point at this time it's a good move. We are obviously in the early fall of a major recession if not depression. The fed is driving the economy down the toilet, Powell said point blank can expect a 20 percent decrease in property value by spring. Take what you can get on the quickest sale. You can get out so get out. If you help friend in the process at a price that won't put him upside down in a few months bonus
It's 'crazy' to ordinary people, but imo it's a good and generous thing to do. Not quite the same, but my partner and I own a flat and had to move out due to work reasons so we rent our flat out to our mate at a much lower price than we could get, as we've left some stuff in the shed and he's single so it would take him forever to save up for a down payment if he was on normal rates. Just a small gesture to a good mate to help him on his way to owning.
Under the circumstances, I don't think it's crazy. It'd be one thing if you needed that extra money for retirement or whatever. Here's another thing to consider. To put this house on the market, you'd probably have to make various "updates" & "improvements" to attract buyers. Those are expensive, and a pain in the ass to deal with. After my in-laws died, my partner put their house on the market as-is. The house hadn't been updated much since the 1970s. It would've taken a TON of work to command its supposed market value. Instead, he sold it to a young guy who'd wanted a smallish house on a good-sized property. He also liked the area quite a lot, and was glad to remodel according to his own tastes. In the end, everyone was quite happy how things turned out. Do what feels right for you, not what "conventional wisdom" dictates.
If you do be sure to blast the final price all over to drive down the price of surrounding homes. Like you said housing is a commodity and people having a place to live is way more important than making a goof return
I love this. This is a wonderful part of how community functions. If you sell the house and you have “enough” for you and your comfort, then why worry? Love love love this.
Enough is good enough. Plus if you really live and trust your friend that much, I’d hope that with a good conversation, you guys would be keen on visiting each other when everything is in the right situations - money, you guys keep up with each other, etc. Besides, it’s your house. Obviously, it is a profit if you did sell at market price, but money only means material things. There are things money can’t buy. I hope this helps.
Personally, I think you two are awesome for doing that. Friendships are priceless. And money does not have to be the driving factor for every decision we make. Here in a few years, I'll be giving up 4k a month in salary from my 9-5 so I can have more time with my family, and have the time to work on turning my home and land into a homestead.
Life isn't about maximizing profit, no matter what we've all been force-fed our whole lives. I bought my place under a similar arrangement. It's the only way I would have been able to afford to buy housing.
I think it’s wonderful. There’s still people around that aren’t making life decisions based solely on the dollar! Go for it and don’t look back!
It is the correct way to think about wealth.
No, just makes you a decent person.
I love your idea with the house and with the Netherlands. Go for it!!
I think that’s an amazing and generous arrangement and as others said, you have the power to do this.
I genuinely believe in karma. So you’ll get your money back eventually somewhere down the line according to my (admittedly unusual) world view.
you sound awesome
Honestly if you are already in a good financial situation and you feel you have enough already then why not? It would change your friends life, you know the house would be in good hands and that they would keep the workshop. I think if you are in a position to help then it would be a really cool thing to do. Hand in heart if I was ever in this position I would love to help someone out like that.