Figuring Out The Fair Market Value For Your Home Is The Most Straightforward Solution If You Are Considering To Sell Your Home To A Friend Or Relative.
The Best Options For Selling A House To A Relative Or Friend
There are plenty of situations in life when you might find yourself in a position to sell your home to a family member or friend. Because the contexts in which these kinds of sales take place can vary, there are now various ways you can go about handling the transaction.
Option 1:Sell Your Home To A Relative Through An Owner-Financed Sale
An owner-financed sale is probably the fastest, least-expensive way to approach selling your home to a family member or friend. That’s because it bypasses much of the traditional home buying and financing process. Think of it as a lease-to-own agreement for your home; the buyer takes up residence and assumes ownership, but instead of paying off a home loan from a lender, they make incremental payments directly to you.
Option 2: Consider Selling Your House To A Family Member Using A Quitclaim Deed
To sell your home to a family member or friend using a quitclaim deed, you’ll just need to negotiate your sale price then complete a fill-in-the-blank form that non-agent homeowners can fill out and have notarized without professional assistance. This is one process that is explicitly designed to facilitate the kind of high-trust transfer of ownership that comes with selling a house to a relative or close friend.
Option 3: Sell Your Home To A Friend Or Relative In Pieces
When we say you can sell your home to a friend or relative “in pieces,” we simply mean that it’s possible to arrange for someone to buy a share of the property outright then secure other financing for the remaining equity. For example, a spouse or child could pay you cash upfront equal to half of the fair market value of your home, then finance the remaining half through a traditional mortgage and contract.
Option 4: Sell Your Home To A Friend Or Family Member Via An Off-Market For Sale By Owner Deal
Selling a house to a friend or family member is one situation where selling your home without a real estate agent makes a lot of sense. Because your buyer is highly visible and motivated, you can bypass much of the marketing, networking, and legal maneuvering that goes into a regular home sale. So long the buyer can qualify/pay, selling off-market without an agent can save both parties money.
READ MORE: How To Sell A House By Owner
Option 5: Hire A Real Estate Agent To Sell Your Home To A Relative Or Friend
Though it comes with added costs, working with a real estate agent is the only way to guarantee that any effort to sell your home to a relative, friend, neighbor, or acquaintance goes as smoothly as possible. In a situation where you’re selling a house to a friend or someone else you already know, a realtor can make sure the appropriate paperwork gets filled out and filed swiftly and correctly.
Finding Out The Fair Market Value Of Your Home Is A Key Part Of Selling A House To A Family Member Or Friend
Regardless of which sales option you select, it is always important to arrange for an appraisal and/or market valuation of your property. That’s because finding out the fair market value of your home in its current state and under current market conditions ensures that the payment you ask for and receive is lawful and equitable. Though you may have a strong impulse to sell a house to a friend or relative at a steep discount, doing so can end up damaging you both. They’ll be liable for significant capital gains taxes when they sell, and you will be unable to claim the loss as a deduction or legally sell the property for less than its appraised value.
READ MORE: How To Sell A House And Not Pay Taxes On It
