Realty Vision

Posted by Realty Vision on 6/15/2017

Selling your house in a short amount of time has so many advantages. The sooner you sell your current house, the sooner you can move into your dream home. An early sell also keeps you from taking on additional debt, especially if you are moving to start a better job, gain more space or relocate to a safer neighborhood.

Take these precautions when selling your home to a family member

Selling your home to a family member could be a quick way to a house sell. But, there can be drawbacks. To avoid entering a bad deal with a relative, consider taking the following precautions:

  • Run a credit check on the relative - Don't assume that a family member is financially responsible. Also, don't assume that just because a relative has a high paying job that his credit score is good. If you're selling the house direct, without working through a realtor, accept what the lender says when they tell you that the relative is a high credit risk.
  • Leave the legal aspects of the deal to the lender - Make sure that your relative goes through the entire home loan process with a lender. Avoid creating "outs" for your relative, this includes taking on another mortgage and letting the relative pay you monthly payments.
  • Give your relative a great home - Just as you don't want a relative to buy your house then back out when it comes time to sign the contract, commit to giving your family member the best house. Get the home inspected. Tell your relative about issues with the house. Avoid keeping the fact that the roof or the basement leaks during hard rains a secret.
  • Be honest about the neighborhood - Even if your relative visits during major holidays, they don't live with you. Tell your family member if neighbors play their music loudly on weekends or late at night.
  • Sell your house at a competitive price - This could be one of the trickiest parts of selling your home to a family member. As tempting as it might be, avoid shaving thousands of dollars off the price of your house to make your home more affordable for a relative or to save your family members money.
  • Stay away from the desire to impress - Keep your house in good condition. But, don't pay to add rooms onto your house because you want to impress a family member with the size or style of the house.

Selling your home to a family member can pay off

Selling your home to a family member is an easy way to find a buyer. It can save you advertising and marketing money. It can also keep you from having to take on a realtor and pay commissions. But, there are challenges to look out for when selling your home to a family member. You can avoid or overcome these challenges by setting clear boundaries up front. Let relatives know that they must adhere to the same home buying rules as a non-family member.

This means you pay attention to a relative's credit rating. If you know that a relative is not good at meeting her financial obligations on time, consider walking away from the deal. By making sure that you work with a relative who is not only financially responsible but who also takes full responsibility for themselves and what they own, you could increase the likelihood that the house will betaken care of, which could potentially keep the property in your family for generations.