I just purchased a condo. It was listed with a realtor and the purchase and closing were routine. I just noticed that the state properties database lists the transaction as "non-arms length other", while the previous two sales of this unit are described as "arms length improved". I'm not sure what all the terms mean, but a Google search seemed to indicate that an arms length sale is between two parties who don't know each other (ie, not family members, etc.). So I'm puzzled by why my purchase is listed as it is, and not sure if it's a mistake or not. I reached out to my title insurance company but thought I might also get an explanation here. Thanks!
Sale recorded as "non-arms length"?
byu/Character-Bar-9561 inRealEstate
Posted by Character-Bar-9561
7 Comments
It is possible that the purchase price raised red flags with the county assessors office as a non-arms length transaction. This sometimes happens if you get a very good deal on a property.
If you are not related to the seller, you might reach out to the assessor and let them know that is a mistake.
In my state both buyers and sellers fill out an affidavit at closing that lists particulars, including this, about the sale. But mistakes get made.
Title company is not likely going to be interested, this doesn’t matter to them.
I had to do one of these. It means 2 parties (buyer, seller, realtors, banker, attorney, etc) that are related or might have had some previous dealings or contacts. With these extra precautions can be taken for contracts and or financing.
Did either of the parties have a familial relationship with either of the real estate agents? It would have to be disclosed in the contract.
non arms length transactions are typically not at market prices – they can be, but typically aren’t. it’s like your dad selling a house to you below what he could have sold someone else based on comparable sales in the area.
probably a mistake unless you do know the person you purchased from but it certainly seems like you don’t. is it possible you have the same last name as the seller but are completely unrelated?
Sounds like a clerical error
It means nothing to you. It just means the county may not use the price when doing comp sales to establish taxable values for other units.