Your company has offered you an amazing job opportunity in Atlanta. Your brother, who’s preparing to retire, has always loved your home here in Marysville and would like to buy it. What could be simpler? You don’t have to deal with potential buyers traipsing through your home, a real estate agent “staging” it for an open house and the myriad other complications that come with selling a home, right? Not so fast.
Selling a home is still a business deal with a multitude of regulations that need to be followed. The fact that the deal is with a family member can make things more — not less — complicated. Be careful about cutting corners. The more you do things by the book, the smoother everything is likely to go. This means adhering to local, state and other laws.
Even if you sell the home at a lower price than you’d ask from a stranger, it’s essential to accurately state the sale price on all documents, including any tax reporting. Speaking of documents, you need a written agreement, just as you would if you were selling to a stranger. This isn’t something you handle with a handshake.
Don’t skip the inspection. It’s essential that the buyer has the home inspected by a professional. This is for everyone’s protection. You may think you’re disclosing all of the flaws and potential issues. However, third-party inspectors do this for a living. They know what to look for. A thorough inspection can save both you and your family member money and conflict later on by letting you address issues you weren’t aware of.
Avoid financing the sale. If you’re in a position to help a family member afford the home, you may be tempted to do so. Why should he have to deal with mortgage applications, fees and interest?
It’s preferable when the financing is done by a third party. What if your brother loses his job and can’t afford to make payments for months or longer? Do you want to be in the position of “foreclosing” on him?
If you’re considering selling your home to a family member, a Tennessee real estate attorney can provide important guidance on handling every part of the transaction. This can help you both enjoy your new homes without unnecessary legal and financial complications.