The following sections represent the recommended steps to take when selling a house to family. It’s a good idea to keep lines of communication open between you, the seller, and your family member, the buyer, throughout the process.
1. Establish The Home-Selling Process
Make sure you and your family agree to the logistics of the sale and how you’ll execute official decisions. Laying the groundwork for the sale in advance eliminates future conflict or confusion. You may want to discuss the following:

  • The specific professionals you may want to have help you
  • How your family member will buy the home
  • The timetable you want to use
  • What should happen if other parties get involved and try to change the agreement between you and your family member

Ultimately, both parties should stay on the same page so each person knows what to expect during the home selling process.
2. Hire Professional Help
Venture 1 can help iron out the process for both parties. These professionals can enforce contracts and fees, draw up the paperwork, identify state-required property disclosures, review important documents and ensure that the home sells for fair market value.
A good agent provides counsel on what constitutes a good offer and what is negotiable. This sentiment is especially important to keep in mind when selling a house to a family member.
A professional can serve as a “buffer” between you and your family member, keep the entire process objective and offer key advice when both parties are real estate novices. The sale’s final result can end up being a very objective, smooth process.
3. Determine The Homes Value
A neutral third party should evaluate your home’s value. A professional appraisal can offer a more educated decision on your home’s official market value – the home’s value may have changed since you first bought it. Either you or your family member can pay for the home appraisal to get the home’s official value.
4. Set A Price
You can choose from two primary options for setting a price when selling to family members: gift or fair market value. A “gift of equity” means that you sell property to your family member for a lower amount than the current market value. The gift of equity applies to the difference between the current market value and the amount for which you sell your home.
Selling it at lower then fair market value means that you will have to report the gift to the IRS. Under IRS rules, you can provide a gift of up to $15,000 as a gift of equity before you have to file gift taxes.
As the seller and gift-giver, you must pay the gift tax. You can easily identify a few drawbacks to gifting a home to a family member, including legal fees (a gift of equity requires a contract) and having to pay possible capital gains taxes.

Your sale might also have a negative effect on local real estate. For example, let’s say you sell your home to your daughter for $100,000 less than the home’s fair market value. The home is worth $200,000 and you sell it to her for $100,000. Let’s say that after she moves in, your former next-door neighbors want to sell their home. Unfortunately, they might not get their full asking price of $200,000 because records show that your daughter bought the home for a full $100,000 below market value.
5. Close On The House
Closing on a house with a family member may differ from when you originally closed on your home. It’s a good idea to hire a lawyer to oversee the accuracy of all closing documents.
However, if your family member will buy the home with a loan, the lender will mandate a traditional closing that involves a title company.

ABOUT US

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Venture One Realty has recognized that Connecticut Homeowners need and want a way to keep more of their hard earned equity when selling their home. Our Clients save Thousands of Dollars without sacrificing the services that are critical to maximizing the sale price of their home. We offer all the same MLS exposure, marketing tools, technology, quality of service, expertise, and personal attention as the Other Realty Companies but without the costly Real Estate Commission. You pay only 1%.

We are a full-service Real Estate Agency that will manage the entire home selling process from listing to closing. You get everything you would expect from a traditional Real Estate Agent but with the added benefit of working with a technology-enabled and customer-focused team of Agents. Our results speak for themselves.

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