Selling a home to a daughter or son is a big decision and transaction with both financial and legal ramifications for everyone involved. Though it seems like a fairly simple home purchase between family, these tips and guidelines should be used to ensure that all family members are satisfied and protected throughout the process.
Though the home purchase may only involve a parent and child, selling a home may affect other members of the family both financially and emotionally. Open the lines of communication with ALL family members so they are aware of the transaction and long-term implications.
Shy away from verbal agreements
It’s normal to converse with family members about the specifics of the home purchase; however, don’t proceed with a home purchase without documenting verbal agreements and promises for later in the process. Write down all details discussed, such as any financial gifts, down payment amounts, monthly payment, and sales price.
Make it legal
For the protection of both parent and child, proper legal documentation should be drafted and retained by both the home buyer and seller. Contact a lawyer to draw up an offer to purchase and any other documents necessary for the purchase.
Involve other significant parties
No matter what the sales price, a real estate purchase frequently has financial implications for everyone involved in the transaction. Contact other parties before and during the process, such as a financial advisor, accountant, and appraiser to cover all the bases.