You may want to sell a house fast in Rochester, NY, and a family member or a friend has expressed an interest in purchasing your property. On the surface, selling your home to someone you know seems like an easier way to sell. But easier doesn’t always mean better.
While selling your home to a family member has its advantages, there are also several drawbacks. It could damage the relationship between the buyer and seller if things don’t go smoothly. So, before you agree to sell your home to a friend or family member, understand the pros and cons of this arrangement so that you make a win-win decision that works for all involved.
Pros of Selling Your House to a Family Member
One of the most significant benefits of selling a home to a family member is that they appreciate its history. Plus, selling your home to your son or daughter is a great way to keep the house in the family. Also, it gives you the chance to visit the property on occasion, like a family thanksgiving dinner or Christmas party.
The other benefits include:
- Less Hassle: When selling a house to someone you know, you can skip the tedious process of listing the home on the market and waiting for the right seller. You don’t have to host open houses or market your property.
- Save Money: Since the deal doesn’t involve realtors, you can save a massive amount of money on realtor commissions. Also, you don’t have to clean and stage the home to attract buyers, helping you save more money.
- More Flexibility: You can be flexible about the timeline of your move since you’re selling your home to a family member or friend. You can work with the buyer and decide on a convenient time that works for both parties.
Cons of Selling a Home to a Family Member
Even with the benefits listed above, selling your home to a family member is not always recommended. Here are some of the downsides you should be aware of:
- Lose Money: Since you’re selling to a family member, you might be tempted to offer a lower price than what you would provide to a stranger. Giving them a good deal might not be an issue if you’re financially in a good place. However, if you need money from the sale for retirement or another purpose, this could put you in a tight spot financially.
- Tax Concerns: Even when selling a home to a family member, you have to ensure that you sell it at fair market value. Selling the house for below 75% of the market value can be a red flag for the IRS. To avoid this situation, you can give a gift of equity to the buyer. Talk with a real estate agent or tax attorney to learn how to handle the transaction to avoid tax complications.
- Strained Relationships: Damaging relationships is one of the most significant disadvantages of selling a home to someone you know. If there’s a problem in the house, like a basement flood or a leaky skylight, the buyer might blame you for selling a damaged property. The reverse might also happen. For example, when you visit on a later occasion and see the new homeowners rip up your favorite carpets, it might upset you.
While selling a home to a family member might seem like an easy way out, it’s not always the best choice. If you’re looking to get the maximum financial value out of your home, the best option is to handle the transaction as a business deal. Connect with top-rated cash home buyers in Rochester, NY, and request a free cash quote. If the price offered is attractive, you can sell the home for cash and avoid the complications of selling your home to a family member.