# Buying property at less than market value



## M0vingon (Jun 19, 2010)

I've been lurking here for some time and I have a question that I hope someone can help with.

3 years ago, my parents purchased a condo unit through their family business for me to live in. I have been paying monthly rent to their business. The intention was that I would buy the property from them once my income stabilized. In the interim, I have been saving for the down payment so that I can get a traditional mortgage and relieve my parents of being involved. 

In the past 3 years, the housing market where we live has almost doubled. The condo I am living in has a market value of at least 120K more than we paid for it. My parents have no issue with following up on the initial agreement and selling me the property for what the business paid for it. My concern is that there might be a penalty for them (the business) selling at less than market value. Also, I have been saving a 20% down payment for the asking price of the condo, not the market value. Yet I read somewhere that the down payment must be 20% of market value. 

Boiling it down, my questions are this: 1) can my parents' business sell me the property at less than market value without penalty; 2) is down payment based on market value or sale value of the house; 3) who should I talk to about this to get correct, concise answers. (lawyer? banker/mortgage broker?)

Input is much appreciated!


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## GeniusBoy27 (Jun 11, 2010)

*RE: Selling property*

I think you can buy the property for whatever agreed price that you came with. However, I'd talk to a real estate lawyer.


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## Cal (Jun 17, 2009)

Yes, market, RE lawyer.


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## Berubeland (Sep 6, 2009)

Parents can "gift" things to their kids I too am not sure how everything works out in this kind of scenario. 

Lawyer or even accountant might be able to shed some light on this.


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## M0vingon (Jun 19, 2010)

Thanks for the replies. I know that it's kind of complicated. We will definitely seek sound legal advice.


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