Your children, grandchildren or other relatives are viable candidates to buy your home, and your emotional attachment can tug at your heartstrings. You might be tempted to give them a discount or shoulder certain expenses. However, there are legal implications to consider despite the generous gesture, which can lead to family tensions if you aren’t careful.
Regardless of the challenges, selling your home to a family member can be a positive experience. During the first half of 2025, 38% of homes were taken off the market without being sold. Buyers won’t budge, while sellers don’t want to go lower than the asking price.
Coordinating with relatives can involve a more amicable exchange, and you get the cash you need at the end of the day. It can also skip a big part of getting a real estate agent to market and find buyers for you. Utah's real estate commission rates are an average of 4.68%, so a for-sale-by-owner approach will contribute to significant cost savings.
A home sale should benefit both parties equally, especially when selling to your family. Here’s some advice on setting the right price and avoiding conflicts.
Be open with your family regarding expectations about the transaction, whether it’s the legal and financial aspects or the emotional side. It’s crucial to provide the reassurance that you’re ready to let go of the house and go through the rightful selling process together. It’s also a chance to be reassured that they will comply with your needs.
Home sellers should be objective when analyzing the state of their house and gauging its rightful price. For example, windows with gaps and cracks can allow rain to enter and encourage mold growth, which can harm people’s health. Meanwhile, newly installed windows can improve curb appeal and home value.
It’s legal to sell your home to a family member, but there are some extra boxes to check in terms of compliance. Generally, selling an asset such as a house for more than its net cost can be considered a capital gain and is taxable.
Thus, if you're giving your home to a family member at a price far below market value, you might be seen as trying to transfer money without paying the appropriate taxes. You should get legal advice to ensure you’re not making these mistakes on paper.
A home appraiser can help you understand the house’s condition and current market value. For reference, the median sales price of a single-family residence in Utah was $547,700 in the last quarter of 2024. While one of the more expensive markets, prices are relatively stable.
The third-party valuation can help you reach a price suitable for both parties. It can also benefit your relative who is buying the property, as it gives them a reference as to whether your final sale price is fair. Explain your reasoning if you increase or decrease the amount.
It can be challenging to get a fair price when putting your home up for sale. However, selling to a family member can make it much more of a reality. Just remember to avoid creating any emotional animosity and to respect the sales process. With time and effort, your relative will have a new home, and you will gain financial flexibility.
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