Selling Property to Family? 5 Rules for a Drama-Free Transaction
If you’re thinking about selling your property to family, you might be wary at first. And rightfully so. Buying and selling a home is a big deal. There’s a lot on the line and you want to make sure everything goes smoothly. With loved ones especially, you want to avoid any unnecessary stress. If you’re looking to involve a family member in a real-estate transaction, keep these important rules in mind.
1. Work with a professional to facilitate the sale. When it comes to selling property to family, don’t just leave it up to a handshake and a verbal agreement. There’s too much at stake. It’s important to work with a real estate professional — someone who understands the market and the process of buying and selling a home.
2. Make sure the price is fair. It’s only natural to want to extend the best possible offer to a loved one, but don’t do it at your expense. If you’re selling property to family, don’t put yourself in a situation where you’re taking a loss just to help out your cousin or daughter. Have an appraiser evaluate your home to be sure both the buyer and seller are getting the best deal.
3. Don’t gloss over finances. You might feel uncomfortable delving into finances with a family member or you might assume he or she will immediately qualify for a mortgage. Don’t do this. Instead, treat your loved one like any buyer and insist they get pre-approved for a mortgage before you entertain an offer on your house.
4. Be up front about any issues. Just because your sister or nephew may have spent many weekends at your home, it doesn’t mean they’re aware of any potential problem areas. If there’s an issue that needs to be addressed — such as a crack in the foundation or a plumbing issue — be sure to disclose this to your family member. This way, they won’t feel duped, and you can avoid any hurt feelings in the future. Speaking of being up front …
5. Make sure all are aware of your relationship. Never try to hide that you’re selling property to family. Your lender should know your situation. If you try to get sneaky, you just might be committing mortgage fraud, and that’s never a good thing.
If you’re looking to sell your home, and your brother, dad, or aunt is in the market to buy, don’t jump into the transaction too quickly. Do your due diligence to ensure both parties get the best deal.