Should You Sell Your Home to a Family Member or Friend?
If you’re selling a property, you might think that selling to one of your nearest and dearest is the answer. After all, they know what they’re buying, you’ll save on professional fees, and the home you love will be left in good hands.
But is it really that simple? Unfortunately, no.
In this quick read, we look at some of the things that could go (very) wrong if you’re thinking about selling to a family member or friend.
Why sell to family/friends?
There are plenty of reasons for selling to family or friends. Perhaps you want to help a child get onto the property ladder, or you want to keep the property in the family for future generations. Maybe you think you can avoid costs associated with selling a property on the wider market, or maybe you just want to help someone out financially. Whatever the thought process, be prepared for possible fall-outs.
Selling privately
If you think selling your property without an agent is the way to go, you may want to think again. Yes, you will save money on agency fees, and you won’t have the hassle of viewings. But, on the other side of the coin, you might not be getting the best price for your home by selling to someone you know, as there’ll be no other offers.
Without the professional expertise or marketing skills of an established agent, you’ll never know what you could have got on the open market.
Tax implications
Did you know, it’s perfectly legal to sell your home to a loved one for just £1? Something lots of people have done in the past to help younger generations out. However, this act of kindness comes with huge tax implications for both the seller and buyer.
Without diving into the ins and outs of UK tax laws, it is definitely an area that needs careful research if you decide to sell to someone you know to avoid the wrath of HMRC.
Fall-out
With any property sale, there’s the potential for things to go wrong. Add a personal relationship into the mix and it could make things very uncomfortable.
For example, a property survey is a must, but what happens if this turns up something you weren’t expecting? Relations could become strained if both parties can’t agree on the price.
How much do you know about your friend or loved one’s financial situation? Could you get stuck in a chain if they’re unable to sell? What about their credit history – will they be eligible for a mortgage? Just because you’re good friends doesn’t necessarily mean you’d make great business partners.
By selling through an agent, you’re removed from this part of a property purchase, and they get the answers you need without it feeling like you’re prying.
If you’re looking to sell your property, talk to our team at NAME. We take on the stress and hassle, so you don’t have to.