Selling your home to a family member comes with its challenges but there might just be a way around it. Since you’re dealing with a family member or a relative, you don’t need to hire a realtor because you’ve gotten the bulk of the challenges of selling a home out of the way.
How do you sell a house without a realtor? In this article, we’ll cover some tips on how to successfully close the sale of your house with a family member in Austin.
- Agree on a price, but stay flexible
The best way to close the sale of your house with a family member successfully is to arrive at a flexible price. Also, it’s better to keep every record of the transaction in writing for transparency purposes
This is not to say that essential steps such as appraisal and inspection shouldn’t be carried out. Inspection helps the buyer know the condition of the house and that it’s safe to buy as-is. While an appraisal is needed to know if the home is valued more than the loan amount.
Getting everything in writing makes for a flexible and transparent transaction between family members.
- Selling below market value can get tricky
In a bid to make the transaction feel less like a sale, they might want to sell the house lower than the market value. This can get quite tricky because if a house is sold for less than 25% lower than the market price, it may attract a gift tax on the buyer.
To avoid this, the seller can only reduce the original price of the house but not lower than the market value. Also, the seller can file a quitclaim deed to change the title to the buyer’s name. This is arguably the easiest way to transfer property but without the seller receiving any cash payment.
- Stay on the IRS’ good side
The IRS usually monitors transactions between relatives closely; this is because buyer and seller are closely related, and there’s a high chance of fraudulent activities such as fake short sales or fake tax-deductible losses.
As a seller, you can choose to sell your house at a loss to your relative, but the IRS doesn’t want you to sell your house for less than what you owe the bank.
Are There Downsides to Selling to a Relative?
Selling a house to a family member or relative can be challenging which may lead to some complications. Here are a few obstacles that most sellers face when selling to a relative:
- Family Issues
When selling your house to a family member goes south, it can lead to tension or fallout between relatives. With this in mind, ensure that there are clear-cut boundaries even if you’re dealing with a family member or relative. Also, include professional legal counsel to ensure that both parties are satisfied with the deal.
If you sell your house way below the market price, it may attract a gift tax on the buyer and this can lead to more complications.
If you have a question about selling your house to a family member or relatives, you can talk to us at Austin All Cash. We’re cash home buyers and we buy houses Austin. If you don’t want to involve a traditional realtor, you can talk to us for advice on how to sell your house to your family member.
Also, if you’re looking to sell my house fast Austin, we at Austin All Cash are your best bet. We’re Austin House Buyers and we buy houses at a fair and competitive price.