Can I Sell My House to a Family Member at Below Market Value?
It’s often a generous gesture and an arrangement families consider to help each other out financially. Sometimes you just want to keep an important house with countless memories in the family.
Get a Home Value Estimate Before You Sell to a Family Member
Answer a few questions about your home and we’ll provide you with a preliminary home value estimate in less than two minutes.
Get Estimate
Not to worry, it is definitely possible to sell your house to a family member. You will just need to prepare for some additional complexities, such as:
* Taxes: It’s not a guarantee that you’ll owe taxes, but you may have to report a “gift of equity” that exceeds a certain amount to the IRS. You should also be advised of the capital gains implications, particularly for the relative receiving the home, if you gift the entire home.
* Financing hoops: You may face additional scrutiny from the lender if your buyer will use a mortgage for their purchase. The entire deal may be completely above board, but lenders might see a higher potential for fraud and may require some extra steps to get you all squared away.
* Familial strain: Disagreements about the process can cause some strain between family members if things don’t go according to plan, and that’s another possible risk to be aware of when selling a house to a family member.
The following resources may also be of assistance in your family sale:
* Real estate agent: For a reduced commission rate, an experienced agent can help minimize challenges and coordinate the sale. You can easily find a top agent with relevant qualifications for the job through HomeLight.
* Home value estimator: An instant home value estimate can be a useful starting point. It’s not a perfect gauge of value, but it can help you orient your expectations for the next steps. Our online tool is free to use and can provide an estimate of home value in minutes.
* Home inspector: No matter how much trust you or your relatives have that your home is in great condition, a home inspection is an important step in any home sale. Set assumptions aside and get one.
* Appraiser: Knowing what the home appraised for at the time of sale will be critical to document as a reference point.
* CPA: It’s important to consult with a tax advisor on any tax events triggered by the sale to a family member, especially if you sell significantly below market value.
We’ll cover each of these main points for the best chances at an outcome everybody is happy with, as well as the knowledge and tools that will be helpful for completing an intra-family sale. | bit.ly/3XLoEJb
http://dlvr.it/TB1gxM
Comments
Post a Comment