Can I Sell My House to a Family Member at Below Market Value?
It is said that only around 8% of people sell their property to someone that they know, but you might want the buyer of your house to be one of your kids, grandkids, or other relatives. If your budget can let you do so, you can also offer a discount on the house price. You may also like to sell your house to a family member.
It can be generous for you to try to help other members of your family financially. Sometimes, it can help to create wonderful memories. You can definitely sell your house to a family member at a discount. In this guide, you will learn if you can sell your house to a family member at a lesser price.
Preparing for Additional Complexities
Some of the extra complexities that you must prepare for in order to sell your house to a family member are as follows:
- Taxes: Even if you are unable to owe taxes, you might need to report a “gift of equity” that might exceed a specific amount to the IRS. You also need to be advised of the capital gain suggestions, especially for a relative who will receive the entire house if you give them.
- Financial obstacles: You might be additionally inspected by the lender if the buyer will take help of a mortgage for purchase. The deal might be above board, but lenders can sense the chances of potential fraud and might take additional steps.
- Family troubles: There might be disagreements about the process, and this can cause problems between family members if things are not well. This is a risk that you need to be aware of when you’re selling a house to a family member.
Resources that Can Assist You in Your Family Sale
Some of the resources that can help you in your family sale are as follows:
- Real estate agent: For a lesser commission rate, a reputed and experienced real estate agent can help reduce the challenges and help in the sale of your house. You need to look at reputed websites to find a good agent.
- Home value estimator: A home value estimate can help you in such cases. It might not be able to measure the perfect value but can help align expectations for your next step. Several online tools can help estimate your home value in minutes.
- Home inspector: Even if you or your relatives trust that your house is in good condition, a home inspection can be beneficial if you want to sell your house. Rather than assuming things, you must look for one.
- CPA: It is essential that you consult with a CPA on any tax events that might arise due to the sale of your property to your family member. This is especially if you are selling your property to them below market value.
Final Words
You can look at the article above and prepare everything you need to sell your house to a family member at a low price. To avoid problems, you can take the help of an agent, accountant, or home inspector, especially if you are selling your property to a relative at a lower price.