To complete a gift of equity, the home's seller must get an official appraisal. There are many terms that need to be negotiated first so you need the guidance of a lawyer to negotiate and draft the Buy Out Agreement.The Homebuyer Education Class and Pre-Purchase Counseling session needs to be completed prior to writing a contract. A gift of equity occurs when the home seller agrees on a price significantly lower than the home's appraised value. A gift of equity is the sale of a residence to a family member or someone with whom the seller has a close relationship. I'm buying a home from my mom, part of this will be a traditional mortgage and the rest will be a gift of equity from her.