Your Family Tree

What happens when your house is on the market and a family member wants to buy it? Selling your house to a stranger can be pretty straightforward, but selling to family is a little different. We reached out to experts for tips on how to make this a smooth process.

Hire a Professional Title Company

Doug Gartley, Associate Broker at In House Realty, says a real estate agent is not always necessary when selling your home to a family member. He mentions that not only does this save you on commission costs, but you won’t have to prepare your home for showings.

If you decide to not use an agent, it’s still important to use a title company as a mutual third party. Gartley explains that a title company will prepare your purchase agreement and closing documents. You’re able to put your offer together in writing through your title company, which could get you ready to close in 45-60 days.

Put Everything in Writing

Putting everything in writing is extremely important.

“Make certain everything is spelled out, clear and concise, all the way down to whether the furnishings, fixtures and which appliances will be staying.” says Chantay Bridges, Premiere Real Estate Expert at Los Angeles Real Estate Now.

It may also prevent any misunderstandings or unexpected surprises down the road.

This is also important for your title company. Having the details about the buyer, seller, price and terms in writing helps them put the title and purchase agreement together correctly. Details that should be put in writing include anything from the listing price of the house to whether or not you’re taking the refrigerator with you.

Get an Appraisal

Before you sign an agreement with your family member, get your home appraised. An appraisal will determine the true market value of the home, and won’t leave you and your family member unsure of how much the house is worth. This will also stop you from accidentally selling your house well below market value.

Mike Size, a Senior Appraisal Review Analyst at Title Source, has over 30 years of experience in the real estate business. He even has experience buying and selling property to and from relatives.

“My advice is to get an appraisal to establish a starting point for the sale. Get all of the parties working from the same playbook.” Size says.

Not only is an appraisal important, but it’s also necessary for most mortgage lenders. Size explains that many lenders, for financial reasons, will require an appraisal in order to get a loan.

Get a Home Inspection

Although home inspections are not always mandatory, it’s still important to get one done. A home inspection will let you and your family member know if anything is wrong with the house so there are no surprises when your family member moves in.

A home inspector will check everything from the plumbing to the foundation of the house. If you’re looking for help on what to check during a home inspection, take a look at our checklist that highlights areas that are typically inspected.

Understanding the process before selling your home to a family member is important before you start packing your bags. If you’ve ever sold your home to a family member and have any tips, share them in the comments below!

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