<prompt> Human: Sorry if Im posting this in the wrong sub. I been house hunting for a while now but homes where I live in California are pretty high 550k for a mediocre 2 bed 1 bath. A family friend who I know since childhood recently approached me and offered to sell me her runner down home 3bed 1.5 bath for 400k. Homes around her neighborhood are around 550k. Although the house is 3 bedrooms in paper, she has divided the garage into two additional bedrooms and built 2 crappy bedrooms in the back yard for a total of 6 rooms 5 of which she rents for 500 a month. There is a catch to this deal though. She said that in order to help me with the taxes and fees involved with sellingbuying a home, she would prefer only doing a personal title transfer Im not sure if this is what is called and sell it to me on paper for 250K, which is what she has left on the mortgage, and have me give her the 150K left in cash. I explained to her that taxes will be close to negligible whether I pay taxes for a 250k home or 400k home, and plus the city will most likely re assests the value of the home anyways and tax me at 400K for me to go through the risk of paying out 150k in cash. Maybe Im being too suspicious and distrustful, but is this something that can be done? What are the risks of doing this without listing the house or involving real estate agents? Is there something that she might be planning that might affect me in the long run? The only thing I can think of is her trying to avoid paying taxes on the residual income once then Mortgage is paid off.  <response>: As other have said, this is a nightmare and dont walk, run away from it. You are not being too suspicious or distrustful.1 What she is proposing is illegal. It is tax fraud and people cando go to jail for this.2 If this were to occur and not be discovered, youd have a major tax liability on your hands for when you sold. 3 This assumes you have 150K in cash and are comfortable handing that amount of cash over. Would she even want to use an escrow company?!4 The rooms shes built are illegal. Those would be on you as the own for liability. They also may have tenants which could potentially become squatters. Overall, just not a situation Id want to be in. Id suggest either continuing to save up or to look at condos if you do want to buy. 