How to Sell a House to a Friend So No One Feels Cheated: 11 Do’s and Don’ts
Whether you have a mountain cabin, beach bungalow, slopeside condo, or beautiful home anywhere in the country, you’ve probably heard more than one visitor exclaim: “Wow! This place is gorgeous! If you ever decide to sell, please let me know.”
Well, that day has come. And it turns out your friend is serious about buying your home, and you’re feeling great that you don’t have to find a buyer on the open market.
Find an Agent to Coordinate a Sale Among Friends
“It’s always tougher to negotiate with a friend,” says Edward Kaminsky, a top real estate agent in Los Angeles County. HomeLight can help connect you with an agent who is qualified to help.
At the same time, there are innate challenges and financial aspects to weigh. You don’t want to face regrets later on about how much you sold the house for or how the deal came together — after all, it’s still a major transaction rife with emotion.
With these potential difficulties in mind, follow these 11 do’s and don’ts on how to sell a house to a friend if it’s something you’re considering.
It’s always tougher to negotiate with a friend. If you don’t have professionals involved, you can make a mistake that could cost you later.
- Years of Experience 37
- Transactions 1452
- Average Price Point $2m
- Single Family Homes 965
Do: Consider hiring a real estate agent
Hiring a real estate agent is not compulsory when you sell a house to a friend. If you’re wondering, “Can I sell my house to my friend without a realtor?” The short answer is yes. But it’s the moment your friend asks if you’ll throw in the furniture as part of the deal or lower the price just a little more that you might be glad to have an agent to communicate on your behalf.
“It’s always tougher to negotiate with a friend,” says Edward Kaminsky, a top real estate agent in Los Angeles County. “If you don’t have professionals involved, you can make a mistake that could cost you later.”
Kaminsky says that for a transaction among friends, he’s amenable to discussing a commission discount or even a flat fee.
An agent won’t need to offer their full level of service, which includes yard signs, digital marketing, and professional photography, but they can act as a neutral go-between to prevent strain or awkwardness during negotiations.
An agent can also help you determine your home’s fair market value or find an appraiser so you don’t unintentionally sell your property at a discount.
While the seller and the buyer can each engage their own agents, some states allow one agent to represent both parties.
“Good agents who understand their dual fiduciary responsibility to both clients can walk that line very effectively,” Kaminsky says. “They help clients save money by representing both sides and a pre-arranged discount.”
Don’t: Hire the same attorney
Not all states require you to hire a real estate attorney to buy or sell real estate, but it’s almost always advisable to get legal representation in a sale among parties with a pre-existing relationship.
This is true whether or not you decide to work with a real estate agent. While an agent will be more hands-on in coordinating the transaction and helping you decide on a price, providing legal advice is outside the scope of an agent’s services.
Some attorneys may offer to handle the entire deal, but the lower-risk route is for you and your friend to hire separate attorneys to protect your individual interests.
If the relationship with your friend ever sours, you’ll likely be glad you didn’t share an attorney down the road.
from HomeLight Blog https://www.homelight.com/blog/how-to-sell-a-house-to-a-friend/
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