what kind of real estate lawyer to use to sell my house to my son

Should you hire a lawyer to sell your house?

Aug 17, 2021 · You don’t need a real estate lawyer to sell your house — unless the state you’re selling in legally requires you to use one. In some circumstances, though, like if you’re selling for sale by owner or you’re dealing with unique property …

Can I Sell my House to my son?

Mar 01, 2022 · In other words, if you sell your home to a family member for less than the fair market value, it’s a gift. The IRS allows anyone to give up to $14,000 per year to any number of people without ...

Do you need a lawyer to buy a house from family?

But, real estate transactions — even with family — are complicated. Transferring a property title always carries the risk that you'll encounter unexpected legal issues. Just as importantly, there could be tax implications if you sell to a family member below market value. You won't fool the IRS by selling your house for $1 to avoid the gift ...

How much does a real estate attorney charge to sell a house?

Apr 12, 2019 · If you’re mostly looking to sell your home to your child to establish assets in your child’s name, and he or she doesn’t have the money to pay you upfront, you can draw up a quitclaim deed. This allows you to add your child’s name to the title of your home. A quitclaim deed is a way to transfer interest in real estate properties.

How much does a real estate attorney cost?

Real estate attorneys cost $150–350 per hour, and usually bill in six minute increments. Or, they may charge a flat fee for certain services. Costs...

Should I use a real estate attorney if I'm selling FSBO?

Unless you're an experienced seller, you should hire a real estate attorney to prepare the purchase agreement and other documents when you sell FSB...

How do I find a real estate attorney?

A great real estate agent can refer you to a great real estate attorney. You can also find real estate lawyers through professional organizations l...

Why is a real estate attorney important?

A good real estate attorney provides a backstop for your real estate agent, finding loopholes in the purchase agreement, saving you money with contingencies, and maybe even insulating you from lawsuits years down the line. Let’s go over some of the situations where hiring a real estate attorney is a good move, the responsibilities ...

How much do real estate attorneys make an hour?

Real estate attorneys are paid by the hour — market rates are between $150 and $350. You may be able to negotiate a flat rate, or a cap on the number of hours they work on your behalf.

What is a purchase agreement?

The purchase agreement is a legal contract that outlines the rights of the seller and the buyer. A lawyer can review this contract and make sure you’re receiving all the protections and assurances that you should be. Signing an incomplete or sloppy purchase agreement can leave you vulnerable later, even if you abide by your state’s disclosure laws.

Why do agents make more money?

Because most agents work on commission, they make more money the higher the final sale price goes. That’s great if your priority is extracting every possible dollar from your sale. But sometimes sellers just want a quick sale, or want their property to pass onto someone who appreciates it.

What are the benefits of being an agent?

A great agent doesn’t just help you buy or sell a property; they also offer a sympathetic ear, gentle advice, and all around emotional support. A huge financial transaction can be a huge source of stress, and a good agent knows how to reassure their clients.

Do I need a commercial real estate attorney?

This isn’t the case when it comes to commercial real estate . Commercial real estate deals are much more complicated and risky, and there’s usually a lot more money involved, so hiring a commercial real estate attorney for a commercial transaction is basically required.

Can a lawyer fight on your behalf?

But it’s understood a lawyer’s demands are backed up by the threat of costly litigation. Simply put, a commercial real estate lawyer can fight much more effectively on your behalf than a commercial agent.

What can a lawyer do for a home?

A lawyer can provide clarity if any legal issues arise during the sale of the home. A lawyer can also perform a title search to see if there are any liens on the property or if zoning prohibits your family member from making any future improvements on the house.

Why do lenders require appraisals?

Lenders typically require appraisals to ensure the value of the home is high enough to match the value of the mortgage. Michele Lerner, author of “Homebuying: Tough Times, First Time, Any Time,” recommends getting the appraisal done before signing any paperwork, just in case you find out you’re undervaluing your home.

How much can I give to someone without paying taxes?

The IRS allows anyone to give up to $14,000 per year to any number of people without having to pay gift taxes. So if your home’s value is $14,000 or below, you won’t have to pay the taxman. Anything over that amount means you’ll have to buck up come tax day.

Do you need to have your home appraised?

Hire an appraiser. Even if you’ve agreed upon a selling price , you’ll need to have the home appraised if your family member is seeking a mortgage. You may have already landed on a price, but if your family member is seeking a mortgage, you’ll still have to have the home appraised.

Do real estate agents work on commission?

Although agents usually work on a commission basis, if you and your family member have already agreed on the price, you may be able to find one who will work for a flat fee to help you through the process. After all, the agent doesn’t need to spend time marketing the property— you already have a buyer !

What is a trusted real estate agent?

A trusted real estate agent can facilitate the sale while maintaining objectivity, and take the heavy lifting off your family’s plate. That is, if it’s in your budget. At Clever, our free service connects you with a real estate agent who's agreed to a reduced rate, saving you up to 50% on commission fees.

What is a CMA appraisal?

You'll want an agent to perform a home appraisal or comparative market analysis (CMA) to give a ballpark value of what your home is worth. Have this done early in the negotiations with your family member so you can reach a sale price that works for both of you.

Do you have to pay capital gains tax on a child's death?

Since you are allowed an exclusion of $250,000, she would need to pay capital gains tax on $50,000. On the other hand, if you waited until your death for your child to inherit the property, the cost basis would be the “stepped-up basis,” or the value of the property on the date of your death.

Can you sell your house to a relative?

You can absolutely sell a home to a relative. Plus, you can avoid the time- and money-intensive process of finding a buyer. There's a disclaimer here though. If you've ever lent any money to a family member, owned a business with a relative, or even shared an apartment as roommates, you know it's not always easy.

How to buy a house for a child?

The devil’s in the details, but you’ve got options: 1 Let your child inherit the house. 2 Gift the house outright. 3 Finance your child’s purchase of the house. 4 Sell the house to your child at a discount. 5 Sell the house to your child but continue to live there. 6 Let your child assume the mortgage. 7 Use a personal trust.

How much is the annual gift tax exclusion?

First off, you can offset the value of your gift using the Annual Gift-Tax Exclusion. In 2018, the exclusion amount is $15,000. It is per-person and per-recipient, so if you and your spouse are both gifting your house to your child, you can double that exclusion amount, and gift $30,000 tax-free.

Do you have to pay taxes on a gift?

IRS rules say the giver of a gift must pay taxes on that gift. The recipient doesn’t. So, if you gift your house to our child, you have to pay gift taxes (which range from 18%-40%) on the value of the house. Luckily, there are a few ways to combat this gift tax.

Can you pass your house on to your child?

If you live in your house until your final moments, your surviving relatives can inherit the contents of your estate (everything you own minus your debts). This means, when you die, you can pass your house on to your child if you wish to, as expressed through a valid will.

Price and Financing

When a seller knows the buyer, the seller is going to be more inclined to offer a discount or go further down in price than if selling to a normal buyer. This has the potential to put sellers in a position where they’re taking a loss on the sale.

Taxes

When selling your home to your child, there are tax consequences for both parties that you should be aware of before entering an agreement.

Be Upfront About the Relationship

In most situations, a lender won’t deny an application for a loan because of a buyer/seller relationship. However, not disclosing this information up front can cause big problems.

Put It on Paper

Selling your home to your child means that you have the ability to be more flexible with repayment terms, but that doesn’t mean you shouldn’t approach the terms as you would with any other buyer. Be sure to put all terms in writing and work with an attorney to create a mortgage note that you and your child can sign.

A Quitclaim Deed

If you’re mostly looking to sell your home to your child to establish assets in your child’s name, and he or she doesn’t have the money to pay you upfront, you can draw up a quitclaim deed. This allows you to add your child’s name to the title of your home.

Why is it important to protect your interests when buying a home from a family member?

If you’re in fact the one buying a home from a family member, it’s vital to protect your own interests, especially if there is a lot of pressure from the seller to move the process along without any professional input.

Who pays gift tax?

Who Pays the Gift Tax? The buyer would not have to pay tax on the gift; the donor is generally responsible for paying the gift tax. The main tax risk is if you give the entire home to the family member—then your tax basis for the home is inherited by the recipient.

Can you come to a price agreement based on an appraisal?

You could come to a price agreement based on the agent’s estimate and/or the appraisal, or wait until after the inspection. Regardless, you’ll want to have a purchase contract that includes relevant contingencies, such as voiding the contract if the buyer can’t secure a mortgage by a specific date.

Is it easy to buy a home with family members?

Home transaction s involving family members can be an affordable and easy process, but it’s best to prepare for complications. That’s why you’ll want to hire the right professionals to help you meet all local, state and federal regulations and ensure both sides are getting a fair deal.

Do you have to pay taxes on a gift?

Even if you provide a gift in the home sale, you likely won’t have to pay taxes—there is no need for a gift tax payment unless you have given away more than $11.58 million to this person in their lifetime, as of 2020.

Why do I need a real estate attorney?

Reasons to hire a real estate attorney even if it’s optional 1 You’re an out-of-town buyer. 2 You’re buying a property that is a short sale or bank-owned. 3 You’re buying a property that is part of an estate sale. 4 You’re buying a commercial property. 5 You’re buying a property that could potentially have some structural issues. 6 You’re buying a property in a problematic area such as a flood zone or areas with adverse conditions (tornado-prone, radon, toxicity levels, etc.).

What does it mean when you are selling a house?

You’re selling a property that is in some state of distress. You’re the heir or executor of a property whose owner is now deceased. You’re selling a house with an uncooperative partner. You have judgments or liens on the property.

Which states require a real estate attorney to be present at closing?

These include Alabama, Connecticut, Delaware, District of Columbia, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and West Virginia. Keep in mind that these rules can vary by region within states, too.

Who is Julie Ryan Evans?

Julie Ryan Evans is an editor and writer who has covered everything from politics to pop culture and beyond. She loves running, reading, cold wine, and hot weather. Get Pre-Approved Connect with a lender who can help you with pre-approval.

Can siblings inherit a house?

It's common for siblings to inherit real estate—the family house, or maybe a vacation cottage—together. Parents see an even split as the fairest, easiest way to leave their property, but often don't think through the possible consequences, both financial and emotional. The basic issue is that you can't easily split real estate, ...

Can an attorney text you?

Attorneys have the option, but are not required, to send text messages to you. You will receive up to 2 messages per week from Martindale-Nolo. Frequency from attorney may vary. Message and data rates may apply. Your number will be held in accordance with our Privacy Policy.

What are the obligations of a real estate agent?

A real estate agent’s obligations to his or her client are somewhat limited, and he or she may not necessarily be working in your best interest. For example, a real estate agent can represent both the buyer and the seller in the same transaction, or could even be the buyer, which obviously could leave you in ...

Who is Michael Farah?

Michael Farah is the founder and managing attorney of the Farah Law Firm. Mike graduated from the University of New Hampshire School of Law and is licensed to practice law in Texas and New York.

Is a real estate attorney better than a real estate agent?

You can probably infer that a real estate attorney is better equipped to provide you with legal guidance than a real estate agent is. Agents can fill out forms, but they can neither draft forms nor modify existing forms. They also cannot provide legal advice regarding those “standardized forms”—only an attorney can do that.

Do you need a realtor to buy a home?

Lastly, many transactions may not require a realtor or real estate agent to sell or help buy a home. This especially applies to “For Sale By Owner” arrangements, owner finance arrangements, and other direct buyer-to-seller or seller-to-buyer transactions.