What you Need to Know if you are Selling Your Home to a Relative

Many young families need to upsize right around the time their parents need to downsize.  Or, perhaps you are helping out a relative in financial need by buying their home.  Whatever the circumstance, it’s not uncommon for someone to sell their home to a relative.

It may be tempting to approach the transaction casually because it’s family.  However, navigating through the home-buying/selling process without an attorney could easily result in unwanted financial penalties that would ruin the potential good that can come from a mutually beneficial transaction.

First, an attorney will make certain that the transaction is properly documented.     For tax purposes, an attorney can ensure that the sale is recognized as a sale, and not as a “gift.”  If it is not properly documented that money changed hands, the event may not be defined as a “sale.”  This is an important distinction, as these two actions have extremely different tax implications.

Second, an attorney will provide the necessary contracts with the correct language for both parties.  An attorney can also review any additional contracts or legal language involved in the transaction, such as documents from the lender.  Oversights or mistakes in a contract could end up costing you several times what an attorney’s fee would be.

Third, an attorney that specializes in real estate law will protect both parties in all the ways they would during a routine home-buying process.  An attorney will also collaborate with the title company, and be with you at settlement to ensure everything goes as planned, and to help navigate through any bumps in the process.

Finally, it’s important to use an attorney that has experience with local real estate law.  Laws vary from state-to-state, and an attorney who is not intimately familiar with local real estate law may miss crucial details.  Involving an attorney will ensure that selling your home to a family member is a rewarding experience, and you will enjoy a peaceful and happy relationship with your loved ones as they enjoy the home.

Smith, Welch, Webb & White is recognized as a premier law firm throughout the state of Georgia. We have an uncompromising commitment to serving our clients and our community. Our team of experts routinely handles a wide range of legal matters, and will provide outstanding service for you, your family or your business. For more information on this topic, email Scott Mayfield at smayfield@smithwelchlaw.com or call him at 770-358-3630.

 

Any representations regarding the law in this Blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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