4 reasons why selling to family makes sense.
Do you dread selling your home to someone who won’t love it as much as you do? This can be a concern if you’ve lived in the same home for a long time or it holds special memories for you.
That’s because selling your home is more than just a financial transaction. It’s a decision that can be filled with emotion or logistical challenges. Sometimes, the answer is to sell your house or condo to a family member.
Here are some of the situations that may be well-suited for this approach:
- Empty nesters who want to downsize: Whether it’s a single adult whose kids have flown the coop or a couple that is ready for something smaller or all on one level, their adult children may be interested in holding onto the home that holds all their memories.
- Widows or widowers: In some cases, an adult who has lost their spouse can’t imagine anyone else living in the home where they spent years as a happy couple, but there’s too much maintenance for them to handle on their own. Maybe your adult children would want to buy the home and you could live there with them. This could be a win-win situation that creates a multi-generational living arrangement.
- An individual or family that’s being transferred: Perhaps you or your partner are pursuing a career in another city. This could be a great opportunity for your parents, siblings, adult children, or other relatives to buy your existing home. If you plan to return to the area in the future, you may be able to buy it back from them if it makes sense for everyone involved.
- A growing family: Maybe your starter home has been working well for you, but now you need more bedrooms and want a bigger back yard. Maybe your parents or in-laws are ready to downsize — at the same time you’re ready for a bigger place. This would provide them with the practical advantage of knowing how well the previous owners (YOU!) took care of the home, while also moving into a space their loved ones once occupied.
If you’re considering selling your house or condo to a family member, here are a few details to keep in mind. You can sell the home for market value or at any price you agree upon. Depending on your financial situation — and the family member you’re selling it to — you may want to sell below market value or at a steep discount.*
As with any transaction, it’s important to put the plan in writing. That way everyone will be on the same page before money changes hands or the process of getting a mortgage is started.
If you take the path of selling to a family member, your descendants might one day beam with pride as they talk about their home “being in our family for many generations.”
Our loan officers are here to help you and your family members navigate the mortgage process. Give us a call today!
*This article is not designed to provide legal, financial, or tax advice. Contact your own advisors to determine if there are any tax implications or other issues related to selling the home below market value.