I have helped hundreds of families over the past 35 years keep Grandma and Grandpa’s home in the family.
There are a few homes right here in Solano County that have been lived in by five generations and passed down four times since the 1920s. There are very few loans that are more rewarding for a loan officer than helping a senior sell their house to their family and keeping the place where family Christmas memories were made for 25 to even 65 years.
The emotional part is cool but the business side of this type of transaction can be rewarding for all concerned. Here are some benefits.
No. 1: Selling your house to your child can potentially allow the child to assume your low property tax rate.
No. 2: Buying a house from an immediate family member reduces stress for the buyer because they have been in the property thousands of times and know about all its flaws.
No. 3: Back in the old days, the saying in real estate was “buyer beware” but since the transfer disclosure rules became law, the saying now is “seller beware” because sellers and Realtors are required to disclose all known defects about the house. It’s unlikely your son or grandson is going to sue you for failure to disclose the toilet flushing issues that have been going on for the past five years.
No. 4: A buyer can buy a house from his uncle for the full appraised value and buy the house with zero cash out of pocket with a% 5 to 10% equity gift.
No. 5: If you sell your house to your family, your family will allow you to stay in the house and sit on the cash from the sale until you find your new house, which is a huge benefit and stress reducer for seniors who haven’t moved in 30 to 60 years.
No. 6: If you have three children and want to give an early inheritance to them equally, you can sell the house to the one who wants to move in and equity gift them 33.33% of the house so your daughter only needs a loan for 66.99% of the home value for you to equally distribute the early inheritance cash to the other two children.
No. 7: A super senior can sell their house to their children for something like 50% of the value and bank the 50% with an agreement to stay in the home rent-free in exchange for the 50% equity early inheritance.
I could give you 10 more reasons and ideas but for now, I hope you get my point. Keeping it in the family can be beneficial for all concerned.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
