Home Tips: Selling your property to a family member.

March 30, 2020

Home Tips: Selling your property to a family member.

A presentation of Century 21 Bayshore Real Estate.

If you’re thinking of selling your home to a family member, that could be a win-win for all involved. However, you should know there are legal ramifications that go beyond familial (and emotional) attachments.

“The sale of a home is a complex business transaction in and of itself,” notes civil rights lawyer George Khoury on Findlaw.com. “Doing business with family members can be fraught with complications.”

Consider these points before embarking on a process that could be unexpectedly taxing.

  • Negotiate payment with a real estate agent. For a flat fee, an agent may make everyone more comfortable by negotiating details and drawing up terms.
  • Don’t skip the official paperwork. Failing to write down all legal terms and contingencies could be a recipe for disaster when discrepancies arise.
  • Follow the law to the letter. For example, don’t misstate the selling price, skip steps in the financial process or otherwise try to beat the system. When in doubt, consult a real estate attorney; in fact, certain states may require that.
  • Invest in a third-party inspection. To avoid misunderstandings, it’s best that a professional inspector provide an opinion.
  • Don’t overly undercut the price. The IRS will apply gift taxes that match your discount.
  • Let the professionals handle the lending. Beware of financing family members, as that could put you in the unenviable position of having to ask for payments or even foreclose.

Failing to write down all legal terms and contingencies could be a recipe for disaster when discrepancies arise and the argument turns into “He said, she said.”

Century 21 Bayshore Real Estate is located at 325 S. Brye Road, Ludington and can be reached at 231-845-0363, [email protected]www.Century21Bayshore.com.

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