buy a house under current market value

[Andre Oakley]

I would like to buy my grandmothers house. its 100,000 below current market value, will this make financing it easier to qualify for a loan? I've heard various rumors, bu I'm not in the best position (cash available, lower end credit score) to buy but I have a year to get everything in order. What would be my best move to take advantage of the opportunity?

[Christopher Phillips]

@Andre Oakley

You can buy the house for less than it's worth. But, you should speak to an accountant first. Here are some thoughts on it...

There are estate planning issues to consider. You grandmother might have to pay gift tax on the equity. Heirs in her will might also have something to say about it.

Also, your cost basis for possible sale down the road would be based on the lower purchase amount. So, by buying it for less than market value, you might be causing yourself excess capital gains taxes later on.