Selling Your Home to Friends or Family? Here’s What You Need to Know
Selling a home to someone you know—a friend, sibling, or even a longtime neighbor—can seem like a win-win. You skip the hassle of marketing your property, and they get a smoother, more personal transaction. But while the process may feel easier, it still requires caution. Emotional ties can complicate things if you're not careful. To help ensure everything goes smoothly (and your relationship stays intact), here are four smart tips for selling your home to someone you know.
Real Estate Attorney Paul McKenna
4/10/20252 min read
1. Strike a Fair Deal—for Both of You
It’s tempting to give someone close to you a “friends and family discount.” But don’t undervalue your home to the point where it negatively affects your finances. A small break on price is reasonable—but selling far below market value could leave you unable to pay off your mortgage or fund your next purchase.
What to do instead:
Hire a professional appraiser to determine your home’s fair market value. Then, if you’d like to offer a discount, consult a real estate agent or attorney to help structure a price that benefits both you and your buyer—without putting you at a financial disadvantage.
2. Handle the Financial Process Like Any Other Sale
It’s natural to trust someone you know, but when it comes to finances, treat this transaction like a typical home sale. One common mistake is assuming your friend or relative will qualify for a mortgage without any issues.
Play it safe:
Ask your buyer to get pre-approved for a mortgage before moving forward. This ensures they’re financially ready and helps avoid awkward delays—or worse, a failed sale.
3. Don’t Skip the Inspection
Even if your buyer has visited your home dozens of times, that doesn’t mean they know every detail about its condition. If issues arise after closing, it can lead to frustration—and potentially strain your relationship.
Protect everyone involved:
Bring in a licensed home inspector to give the buyer an objective view of the property. Be transparent about any problems you're aware of so there are no surprises down the line.
4. Be Honest About Your Relationship
If the buyer is using financing, both parties need to be upfront with the lender about your relationship. Many loan programs, including those backed by the Federal Housing Administration (FHA), require disclosure when there’s a personal connection between buyer and seller.
Why it matters:
Failing to disclose your relationship could be considered mortgage fraud, which may lead to the loan being denied. Most lenders will simply ask the buyer to fill out an Identity of Interest Certification or similar form—it’s routine, as long as you're transparent.
Final Thoughts
Selling a home to someone you care about can be a positive experience—with the right preparation. By approaching the sale professionally and keeping communication open, you can help ensure a fair, stress-free transaction that leaves everyone happy—and your relationship stronger than ever.
Want help navigating a sale to friends or family? Attorney Paul McKenna specializes in assisting his clients with their off-market real estate transactions throughout the greater Milwaukee area. If you need assistance, contact McKenna Law Office today!
