Verbal Agreement on Purchase Price?

What is the name of your state? PA

My husband and I are currently renting our home from his sister and her husband. They have been anxious to sell and verbally gave us a price of $96,000 back at the end of February of this year. Well, a few weeks later they said they wanted $97,500 for it so we agreed (again verbally) and went ahead with trying to get the mortgage for that amount. Anyway, I'll leave out all of the gory details and get to the real problem. We had arranged to do a non-arm's length transaction in which the property would be transferred from them to us because of the sibling relationship. In order to do this, we paid $300 to have the property appraised. We can mortgage up 80% of the home's value this way. So the appraisal came in at $126,000 and we're all set to go but now my wonderful sister-in-law says they want $118,000 and she refuses to sign the paperwork unless we give them the additional funds in cash (i.e. the money will not be shown on the sales agreement) so that they will not have to pay taxes on it. Can they do this?

Sorry to be so long winded. And to answer your question, no, we do not have a realtor or lawyer. We didn't think we would need one since this was a "simple" transaction between family members. Thank you for your help.

[HomeGuru]

Originally posted by farbotnik
What is the name of your state? PA

My husband and I are currently renting our home from his sister and her husband. They have been anxious to sell and verbally gave us a price of $96,000 back at the end of February of this year. Well, a few weeks later they said they wanted $97,500 for it so we agreed (again verbally) and went ahead with trying to get the mortgage for that amount. Anyway, I'll leave out all of the gory details and get to the real problem. We had arranged to do a non-arm's length transaction in which the property would be transferred from them to us because of the sibling relationship. In order to do this, we paid $300 to have the property appraised. We can mortgage up 80% of the home's value this way. So the appraisal came in at $126,000 and we're all set to go but now my wonderful sister-in-law says they want $118,000 and she refuses to sign the paperwork unless we give them the additional funds in cash (i.e. the money will not be shown on the sales agreement) so that they will not have to pay taxes on it. Can they do this?

Sorry to be so long winded. And to answer your question, no, we do not have a realtor or lawyer. We didn't think we would need one since this was a "simple" transaction between family members. Thank you for your help.

**A: well now you know that you were wrong in that you really did need a Realtor or a lawyer. And the transaction was not so simple after all.
You see, you were not aware of one simple aspect in that all contracts for the purchase of real property must be in writing to be enforceable. Statute of frauds.

Ok, I basically knew you were going to say that but can they legally say that they only want the $97,500 for the property all the while verbally insisting that the balance be given to them in cash before they will sign the agreement? Also, don't they have to pay taxes on that money?

[HomeGuru]

Originally posted by farbotnik
Ok, I basically knew you were going to say that but can they legally say that they only want the $97,500 for the property all the while verbally insisting that the balance be given to them in cash before they will sign the agreement? Also, don't they have to pay taxes on that money?

**A: hire an attorney.