When selling a home to a friend or family member, it can be tempting to save on closing costs by bypassing many of the professional services which are traditionally used in home sales. In some cases, these services can be skipped with little risk to either party. In other circumstances, a sales transaction can be left open to legal challenges by the absence of professional advice. An Orange County real estate attorney can help ensure that your family’s real estate transaction conforms to all legal requirements.
Real Estate Agents
Professional realty services can protect home buyers in many circumstances. When family members can agree on a price and the condition of the home, however, these services may not be strictly necessary. One professional realtor told Realtor.com that this is “virtually the only time” he can recommend the sale of a home without representation by a real estate agent. However, not all sales between family members should be completed without an agent. Some families are prone to contentious negotiations. With the significant cost of a real estate purchase, it is not unheard of for even amiable family relationships to disintegrate under the pressure of a sales negotiation. In such a case, it can be helpful to have a real estate agent who can help negotiate the terms of the sale.
Appraisers and Home Inspectors
If the buyer is financing any portion of the sale, it is almost certain that the mortgage company will require a professional appraisal of the home. This is a situation in which a home appraisal is not an optional service, even if you and your friend or relative agree on the value of the home. A home appraisal may also be a helpful negotiation tool when the parties cannot come to an agreement about the value of the home. Finally, both buyer and seller may find that their financial interests are protected by confirming that the sale price of the home is within an acceptable deviation from a professional appraisal value.
A home inspection is another service which will likely be required by a mortgage company or private financier who is funding any portion of the sales price. This, too, can be a helpful tool which the parties use to determine the value of the home and negotiate the terms and conditions of the sale. Finally, it is always wise for a buyer to have a comprehensive understanding of what he or she is buying, even when the seller is a friend or relative. This is especially true of significant investments in real estate.
There are many legal issues that can arise in the sale of a home. A title search may reveal a lien or other cloud on the title which prevents the proposed transaction. Zoning or other local requirements may prevent or restrict the nature of the sale. Other claimants to the home may challenge the validity of sales documents which are executed, and cause future legal problems for both the current and former homeowner. When the buyer and seller are friends or relatives, such issues can spill over to affect relationships as well.
The risk of these and other problems can all be mitigated by having appropriate legal advice and oversight to the sales transaction. An attorney will ensure that the appropriate legal documents are executed to promote a legally binding sale with as few complications as possible. Reduce the risk of legal challenges to a real estate transaction by consulting with an Orange County real estate attorney.