Selling your home to a family member can be a more straightforward process compared to selling to a stranger. Or it can be a living nightmare. However, it’s still important to approach the transaction with care and professionalism. Here are some steps to consider when selling your home to a family member:
- First and foremost, be sure to use the services of a professional Realtor to represent you as the seller. Even though you’re selling to a family member, it’s always advisable to hire a professional that you know, like and trust. You need someone who will guide you through the legal and financial steps of the sale. This alone will help keep the family relationship intact.
- Next, determine the fair market value of your home. You and the buyer can both conduct research to determine the current market prices for similar properties in your area. Your Realtor can provide you with comparables and offer their opinion of what your house should sell for. If you and the buyer can’t agree on a price, you could get an independent appraisal. This can help prevent potential disputes or disagreements about the home’s value.
- Once you and the buyer agree on a price, the buyer should meet with a mortgage lender. That step will start the pre-qualification process. This will inform the buyer on how much money he will need to purchase your home. A pre-qualification letter will show you proof that he is qualified to purchase the home.
Next Steps to Selling Your Home to a Family Member
- Your Realtor can draft the sales contract once the buyer is pre-qualified. That contract will outline the terms and conditions of the agreement. It will include the agreed-upon sales price, payment terms, any contingencies and a closing date for completing the transaction. Also included will be other necessary paperwork such as property disclosures, and Realtor related forms needed to complete the sale and keep everyone compliant with the transaction.
- The next steps would be for the buyer to hire professional inspectors for any inspections he wants to have. This includes an overall whole house inspection and a termite inspection. Also to be considered would be any specialty inspections such as chimney, septic, sewer line, etc. Any repairs would be negotiated after the inspections are completed. The process of things could be different of course, depending on what part of the country you live in and how real estate works where you are.
- Once you’ve negotiated your repairs and come to an agreement, the lender will typically order the appraisal. This will actually determine the actual value of your home. Hopefully the house appraises and you can move on to completing the sale and the closing process. Closing typically involves signing the necessary documents, transferring ownership and transferring funds.
Buying and selling a house involve a million other little steps. For that reason, while selling your home to a family member can be more comfortable to you in some ways, it’s absolutely crucial to approach the transaction professionally.
The right Realtor will:
- guide you through the sale as a business deal
- handle any issues that may arise
- move the transaction along toward a successful closing and
- have everything documented in writing so there are no misunderstandings.
As a result, you should be able to maintain a healthy relationship and avoid any potential conflicts within the family.
If you are considering selling your home to a family member, I would love to talk to you about how I can protect you in the process and save you time, money and frustration along the way.
If you’re curious about your home’s current value, here’s an easy way to find out what’s going with prices in your neighborhood. Click here and enter your address and a report from our local Heartland MLS will be sent directly to your email!
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(all data current as of 9/21/2023)
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