Selling Your Home to a Family Member? 3 Must-Haves for a Smooth Transaction
Posted on: 16 December 2016
Selling your home to a family member or close friend sounds easy, right? Unfortunately, even though a home sale between a buyer and seller that know and like each other may sound easy, the reality is that this type of transaction can place stress on a relationship that may never be fully overcome. If you are planning to sell your home and a friend or relative has expressed interest in purchasing it, you can avoid damaging your relationship and enjoy the smoothest possible sales transaction by making sure you do the following three things.
Choose to use a legally binding real estate contract
The purchase of a home is often the most expensive purchase made by American families today and large financial transactions always have the potential to become emotional, especially when the seller and buyer share a personal relationship. To help avoid emotional conversations and disagreements that could damage the relationship you share it is imperative that all parties agree to use a written, legally binding real estate contract that includes all the specific details of the transaction. This contract should be prepared by either a real estate attorney or a real estate professional and signed by all parties.
Just say no to owner financing
Another potential pitfall that can occur when the seller has a personal relationship with the buyer is extending the offer to provide full or partial owner financing as a friendly gesture. This can quickly become an uncomfortable situation in the event the buyer cannot repay the loan in a timely fashion and the relationship becomes strained. To avoid assuming a position as your buyer's lender, just say no to providing any amount of owner financing and insist they use a traditional bank or mortgage company instead.
Insist on representation by a real estate professional
Buyers and sellers who know each other often think they can handle all the steps involved in the sales transaction, including inspections and overseeing the closing process. Unfortunately, making sure that a home sale remains on course and closes on time can be a cumbersome, time-consuming process. To avoid unnecessary delays and costly missteps during your home sale transaction, insist from the start that the transaction is handled by a reputable real estate professional in your area. Doing this will not only help you avoid conversations that have the potential to become strained with your buyer, it will also free you up to focus on buying or renting your family's next home.
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