Should We Buy a House From Family? (Hour 3)
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Should we buy a house from family?
Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, it's the Ramsey Show, where we help people. Build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, my daughter, number one best-selling author, and co-host of Smart Money Happy Hour on the Ramsey Networks, a very popular, fun, and funny podcast with George Camel is my co-host today. Open phones at 888-825-5225. Nicholas is in St. Louis. Hi, Nicholas. How are you?
I'm doing good.
You better than I deserve. What's up?
Ah, yes. Um, I just wanted to call in. Um, so I wanted to get your opinion on a question I had. Um, so we make about my fiance and I, um, she's a stay at home mother. I work out of the house. I make about $50,000 a year. Um, we have about $11,000 in our loan debt, about $9,000 and other debt like credit cards. Um, and we have a baby, he's eight months old and we have another baby on the way.
When are you getting married?
Um, at the beginning of next year. Yeah.
Why?
2024. Um,
Why not yesterday?
I think we're just nervous with the insurance because right now she's getting insurance, a separate insurance than I am, and we're just kind of nervous there with how much it might cost us if she goes on our insurance.
Don't be nervous. Go find out.
Yeah, we haven't asked a whole lot of questions in regards to that.
What should you consider before buying a house with a partner?
Yeah, we need to do that.
Well, okay, go ahead. How can we help?
Okay, yeah. So right now we're currently renting from her grandmother, and we started to look at some apartments locally today, the past couple weeks actually. And whenever her grandmother found out about this, she offered us the house that we're currently living in. It's worth $250,000 for $150,000. So she's offering it to us for $100,000 less than the market value. And I'm just curious if we should take that offer and what would be the best approach to that?
No. You should not buy houses with people that you're not married to under any circumstances.
Okay. Okay. This would be, like, later on, middle of next year, I would say.
Why?
Yeah. Why? Saving up for a down payment.
Okay. So here's what I would do, okay? Yes. In terms of the structure of that deal. I would offer to rent it from her for three years with an option to purchase it for $150,000 in writing. Okay. In writing.
In writing.
Okay. So if she dies, your crazy uncle doesn't try to undo the deal.
That makes sense.
How did I know you had a crazy uncle?
How can you navigate family dynamics in real estate transactions?
But anyway, yeah, so you see what I'm saying? So yeah, in writing, and then you go get married, get yourself out of debt, get an emergency fund in place, go check the insurance this week, quit using that as an excuse with a baby on the way. And let's find out what's going on. I want you to be responsible. And if the insurance gives you really crazy news and you stick with your plan, fine. But you need to be making major life decisions from facts, not feelings.
That makes sense.
So go get the facts, decide when we're getting married, sooner rather than later is better for the kids, for the finances, for everything. Then we lean in, knock out the debt, build an emergency fund, build a down payment, and then we execute on the option, meaning we go ahead and purchase this wonderful deal. I assume your soon-to-be wife wants to live in this house.
Yes, yeah, this has been her dream for a long time.
It's her grandmother, is that right, Nicholas?
Yeah, it's her grandmother. Oh, I thought it was yours. Oh, so it's not your crazy uncle, it's her crazy uncle. It's her crazy uncle, yeah.
Yeah, okay, all right. So yeah, in writing, and if you want to get real thorough, you would record the option at the courthouse. Okay. Which keeps title from being transferred.
Okay. Okay.
Because you now have a cloud on the title. They have to talk to you first. That's a very thorough way. I don't know if I'd go quite that far, but it's not the end of the world to do that. That would be a very professional business way to transact this. Yep. But yeah, don't close on this house while you're broke, single, engaged, kids.
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Chapters
8 chapters
1
Should we buy a house from family?
0:28–2:11
2
What should you consider before buying a house with a partner?
2:11–3:37
3
How can you navigate family dynamics in real estate transactions?
3:37–5:25
4
What advice does Dave Ramsey give about financial planning?
5:25–8:05
5
How important is marriage before making significant financial decisions?
8:05–10:17
6
What role does insurance play in home buying decisions?
10:17–12:01
7
What insights does Dr. Meg Meeker provide on fatherhood?
12:01–14:00
8
How can dads effectively engage with their children?
14:00–38:14