Tricky Business: Selling Real Estate to Family – Do these things to prevent strained family relations later on!
Over the years I’ve seen an interesting phenomenon when it comes to family members selling their homes. They could be totally unhappy in the house for a number of reasons, however they still want to sell their real estate to a family member. So, they don’t want to live in it, but they want their loved-one to.
Here’s some pointers for navigating the sometimes awkward situation of selling real estate to family:
- 1. Get an objective, expert’s perspective on the price. It’s not enough to know what the house down the street was listed for last summer. That actually does NOT indicate the true value of your house, because you don’t know what the house actually sold for, and the market changes, oh and, it’s also different house! Have your trusted real estate agent come to the home to give you a free market analysis, on what the market value of the home is. Or, hire an appraiser to come tell you what they think the value of the home is worth (cost is around $400-500). It’s important to get a professional’s opinion on this, so that everyone is paying/ selling at a fair price for both parties.
- 2. Don’t talk money until after the market value has been determined! I’ve seen family members decide on a price, then after realizing how much the home is worth, the party that’s buying is unhappy with the change. Negotiating business deals with family is awkward enough, so avoid additional drama, or angry family members by doing this!
- 3. Use a realtor for the paperwork. There’s a process to buying a home. And, having an intermediary is very helpful when both parties are trying to get the best bang for their buck. Negotiating money can be tricky with friends and family, and having a real estate agent part of the process makes you privy to their expert onion on the real estate market. Don’t do it by yourself. You could end up paying more than you should, or not making as much as you could on the home, and the whole time worrying about hurting people’s feelings.
Next week, we’ll look at the last three things to do to navigate a real estate deal with family members. If you have any questions or comments, please don’t hesitate to post them!