Selling Your Home to a Family Member: Tips You Should Follow
There’s a very popular and old saying, “Don’t mix business with family.” It was created for a reason. Deciding to go through the process of selling your home is one of the most important business transactions you will probably make. So, when the potential buyer is your family member, things can get messy if you don’t have a plan in place. Luckily, it doesn’t always have to be that way. Here are a few tips for you regarding this situation:
Put Your Agreement in Writing. We may tend to overlook the consequences of overlooking this step especially when dealing with people we have emotional attachments to but forgetting to put it in writing can lead to major headaches down the road. Be sure to include within your agreement any contingencies to account for anything that can go wrong.
Hire a Professional for Inspections. Even though you think you have found every little defect in every corner of the property, do not neglect this step. Professionals may know to look in places you didn’t even think to look in. They may also find defects or problems that you didn’t even know existed. Conducting all the home inspections needed can give you and your family member some peace of mind about the current and future condition of your home.
Work with a Real Estate Attorney. Although this may not be the most alluring option, a qualified attorney will be able to help you with the legal aspects of selling real estate that you are not familiar with. A lot is required legally in order for the process to not end in liability. State laws vary and ensuring that your sale agreement is enforceable is vital in case something goes south.
Watch Out for Seller Financing Agreements! Even though you may have the ability to be in the position to offer the financing, allowing a bank or lender to provide your family member with the financing certifies that you will not be taken advantage of, nor put you in the awkward position of having to foreclose on your family member.
Get an Appraiser. You might have agreed on a selling price already, but you will still need to have your home appraised if your buyer is seeking a mortgage. Lenders usually require appraisals to ensure that the value of the property is high enough to match up with the value of the mortgage.
Hire a Title Company. Hiring a title company to transfer the home from your name to the name of your family member is a significant tip in finalizing the sale. A title company can perform a title search to make sure that the title to the property is legitimate and to then issue title insurance. They can also determine the property’s zoning requirements which could prevent your family member from making any future improvements on the house in the long run. All in all, working with a title company can help prevent you and your family member from potential and expensive problems that may place the home in jeopardy.
At Kendrick Law Group and Champion Title & Closing, we strive to provide excellent legal management through the closing process. Please call 407-641-5847 (Kendrick Law Group) or 407-374-0198 (Champion Title & Closing) for any guidance, assistance or representation.
Written by: Sarah Geltz, Esq.