Non Arms-Length Transaction

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    Hello NACA family!

    I am trying to purchase my father’s second home and make renovations to the property as well. The home is completely paid off and he’s knocking off $43k of the Zillow’s appraised amount and could go down more if the property inspection lists any big ticket items.

    I can’t help but to worry that this scenario is not going to be as smooth as I envision it will be. Has anyone else bought a home from a family member through NACA? If so, I would love to ask some questions such as, were you required to get a realtor? I wouldn’t think one would be needed, but don’t know until you ask. Did you have to go through any additional hoops to get the loan?

    I let my MC know my intentions in our first meeting and it wasn’t a problem, but at this point I’m just trying to get myself mentally prepared for this ride.


    I purchased my mother’s condo a few months ago. I was required to get a realtor and added the fee into the total loan. Typically the fee would be paid by the seller, but since I was purchasing from my mother at below market value we simply increased the purchase price to include the fee. There was an extra form to sign since the NACA realtor was acting as the agent to both myself and my mother. Other than that there were a couple of fairly easy additional steps. My mother had to submit three months of her mortgage statements to show that she was current on her payments, which sounds like it won’t be an issue for you as the home is paid off. I believe my mother may also have had to submit a LoE stating that she was selling the property to me at below market value, but I’m not certain on that. There was an extra step in getting my application processed where my file had an additional review because it was not an arms-length transaction, but no additional issues arose from it. Ultimately the fact that it was a condo ended up being a far larger complication than the fact that I was purchasing from a family member.

    Good luck!


    Thank you so much for your response Lex!

    Did you have he pay the realtor the standard 6% commission?! If I’m buying the house for @$200k I would need to pay the realtor $12k to fill out some paperwork for me?!


    It was 2.5%.

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