Selling to a Friend or Family Member?
Thursday Oct 05th, 2023
When it comes to selling a home, some homeowners may consider selling to a friend or family member. While this may seem like an attractive option at first, there are a few things to consider before making this decision.
Advantages of Selling to a Friend or Family Member
One of the main advantages of selling to someone you know is the ease of the transaction. You likely have an established relationship with the buyer, and you may already know their financial situation and what they're looking for in a home. Additionally, you may feel more comfortable negotiating with someone you know.
Another advantage is the potential for a faster sale. With a friend or family member as the buyer, you may not need to go through the traditional marketing process and showings that come with selling a home to strangers. This can save time and money in the long run.
Disadvantages of Selling to a Friend or Family Member
While there are some advantages to selling to a friend or family member, there are also some potential disadvantages to consider.
Firstly, selling to someone you know may lead to strained relationships if the transaction doesn't go as planned. If there are any issues with the sale, it can create tension between you and the buyer, and this can have long-lasting effects on your relationship.
Another disadvantage is the potential for a lower sale price. Because you have an established relationship with the buyer, they may feel more comfortable negotiating a lower price. This can result in a sale price that's lower than what you could get on the open market.
Things to Consider Before Selling to a Friend or Family Member
Before making the decision to sell to someone you know, there are a few things to consider:
- Can you afford to sell your home for less than market value?
- Are you prepared for the potential strain on your relationship if the transaction doesn't go as planned?
- Do you have a plan in place for finding a new home if you're selling your primary residence?
- Have you discussed the terms of the sale with the buyer and agreed on a fair price?
If you do decide to sell to a friend or family member, it's important to treat the transaction like any other home sale. This means hiring a real estate attorney to draft a contract and working with a real estate agent to ensure that everything is handled properly.
The Bottom Line
Selling to a friend or family member can seem like an attractive option at first, but it's important to weigh the pros and cons before making a decision. By considering the potential risks and having a plan in place, you can make an informed decision that's right for you.