Is there a way that you can close a business deal with your family members or relatives?
You would think that selling your home to another family member, a relative or one of your friends is easier than listing it on the market. In many ways, you are correct but we came up with a few reminders on how you can prepare yourself for obstacles that can arise if you choose this method.
- Document everything from day 1. Day one is when you have decided you’re selling it to somebody close to you. It is essential that you and your buyer both sit and talk about expectations. When you’ve come up with an agreement, put them in writing. The best way to handle this kind of transaction is to be honest in your dealings.
- Find a REALTORⓇ. While it is true that you no longer need to list your home on the market, you still need to complete all the paperwork. Inspections have to be done, too. This is where a REALTORⓇ with years of experience comes in handy. You can hire one to be your consultant. You can also opt for a real estate attorney. The real estate attorney will be able to draw up all the paperwork.
- Protect both parties. It is tempting to just go ahead and transfer the current mortgage to the new owner but that path could lead to more problems. Advice your relative to go through the process of getting his or her new mortgage. This will require pre-qualification and inspections of the home.
- Ask for a home valuation. Home valuation is one of the things I can help you with to know the worth of your home. If you have an idea of how much your home can be sold for, you will eliminate any confusion or the tendency to over or under price your home. Since your buyer will be getting a new mortgage, the tendency is the lender will require an appraisal anyway. This is a wise step to do before going into escrow.
- Remove your emotions and be careful with discounting the transaction. Admit it, you’re selling your home in Naperville to your family member or relative because you want to save time and effort. It also gives you the assurance that you’re passing an important investment to someone you know. Don’t make the mistake of giving a large discount. If your property has been appraised already, you’re not allowed to go over a 25% discount, otherwise, you could get in trouble with the IRS and face an audit. The home sale will be seen as something you’ve given as a gift instead of a business transaction. These two have different rules that need to be strictly followed.
- Don’t forget to transfer your home title. You have the option of hiring a title company to help you transfer the home from your name to the name of your friend or family member. This is an important step to finalize the sale of the home. Or if you’re already working with a REALTORⓇ, ask for assistance with this matter.
Don’t worry, once you have the help of a qualified REALTORⓇ, you can avoid loopholes and make this sale very easy to go through. It’s always wise to be more prepared than to be unprepared. Buying and selling a home is a giant financial transaction. Make sure you are prepared for the unknown and put everything in writing. You want to avoid any kind of contention between you and your family member or friend, that’s the last thing you want.
My name is Teresa Ryan, call me anytime when you’re in town at 630-718-0424.
Read the full article How to Sell My Home Fast in Naperville – A Comprehensive Guide.