Definitely agree that family sales look simple on paper but rarely are in practice. A few things I’ve noticed:
- Lenders often want a full appraisal, even if everyone’s clear on the price. If it’s way under market, expect more questions.
- Sometimes, title insurance companies flag related-party sales and want extra documentation. That can slow closing.
- If the buyer’s using financing, underwriters can get really picky about source of funds—even if it’s a “gift.”
- I’ve seen deals fall apart because a family member changed their mind halfway. Emotions get involved, and suddenly the “easy” deal isn’t.
If you’re going this route, get everything in writing early and treat it like a regular transaction. It’s not always as friendly as it sounds...
If you’re going this route, get everything in writing early and treat it like a regular transaction. It’s not always as friendly as it sounds...
Couldn’t agree more with this. I’ve seen families skip the paperwork because “we trust each other,” and then someone gets cold feet or remembers things differently six months later. Even if it feels awkward, treat it like any other sale—full contract, disclosures, the works. It actually protects relationships in the long run. And yeah, lenders are sticklers for arm’s length rules, so don’t expect shortcuts just because you share a last name.
I get the logic behind treating it like a regular sale, but honestly, I think sometimes we overcomplicate things with all the paperwork. My cousin sold to his brother, and they just used a basic sale agreement—nothing fancy—and it worked out fine. They trusted each other and didn’t want to make it feel like a business deal. I get that not every family is the same, and yeah, things can go sideways, but not every situation needs a 20-page contract and lawyers on speed dial.
I do think you need to be clear about the big stuff—price, move-in date, who’s paying for what repairs—but if everyone’s on the same page and there’s good communication, it doesn’t always have to be super formal. Sometimes all the legal stuff just adds stress and makes it feel less like a family helping each other out. Maybe I’m just more optimistic, but I’d rather keep things simple if I can.
