The process of selling a house can often be stressful and complicated, especially when dealing with estate agents, solicitors, and potential buyers while purchasing a new property to move into at the same time. However, there is an alternative option that many homeowners don’t realise they have – selling your house privately to a friend. This method can be much more convenient and straightforward for everybody involved.
This blog will explore the advantages and disadvantages of selling your house privately to a friend and how to do it.
Can I Sell My House Privately to a Friend?
In short, yes. Selling your house privately to a friend, family member, or even an acquaintance can be an excellent option for several reasons. The sale is often much more straightforward, and there may be less risk of problems. You can save time and money on estate agent fees, as you can skip advertising your house to find a buyer, arranging viewings, vetting buyers, and negotiating a deal.
Plus, selling to a friend might mean that your buyer is already familiar with the property and its history, leading to a much smoother selling process. This can enable you to sell your house fast.
Why Would Someone Sell Their House Privately to a Friend?
There are several reasons why a homeowner may choose to sell their house privately to a friend. Suppose they need to sell quickly and have a friend looking to buy. In this case, it’s a win-win situation. The seller can avoid the lengthy process of putting the property on the market, and the buyer can avoid trying to find the ideal house to buy.
Sometimes, it may be that they want to help out a friend looking for a new home. Plus, when selling a property to a friend, it’s possible to negotiate the terms of the sale directly with them. When selling to a person you know, you may be able to agree on a lower price or more flexible payment terms compared to selling to a traditional buyer.
Drawbacks of Selling My House Privately to a Friend
Of course, selling your house to a friend is not always the right decision. There are some potential drawbacks to consider. One of the most significant risks is that it might damage your friendship if things go wrong. Relationships may become strained if disagreements over the property’s condition or if the sale falls through.
Another potential problem is that your friend may not be able or willing to pay the property’s total market value. This could mean you have to choose between not selling to them or losing out on potential profits.
How to Sell a House Privately to a Friend
If you have decided that selling your house privately to a friend is the best option for you, you will need to follow these steps:
Get a valuation:
Before agreeing on a sale price with your friend, you will need to know the current market value of your property. Do this by getting a professional valuation from an estate agent or surveyor.
Agree on a price:
Once you know what your property is worth, you can negotiate a sale price with your friend. Be clear about what is and is not included in the sale, for example, fixtures and fittings and any conditions they will need to meet before the deal can go through. Whether you decide to sell the property for the market value or let them buy it for under the market value is up to you.
Hire a solicitor:
Despite selling privately, it is still necessary to hire a solicitor to handle the legal side of the transaction and ensure that ownership of the property is correctly transferred from yourself to your friend. Your solicitor will draw up the contract and ensure all necessary searches and checks are carried out.
Organise a survey:
Your friend may wish to survey the property to check for any issues before the sale is finalised. Encourage your friend to do this, as it can help to avoid disputes later on. Typically, the buyer will arrange and pay for the survey.
Once all the necessary checks are complete and both parties agree on the terms of the sale, you can exchange contracts. This makes the sale legally binding. A completion date will also be agreed on.
Complete the sale:
On the completion date, the solicitor will transfer the money from the sale to you, and your friend will become the new official owner of the property. You will need to arrange for keys, and any necessary documentation, such as the deeds to the property, to be handed over to your friend.
It is important to note that although this type of sale is private, you must still comply with legal requirements such as paying necessary taxes (just like you would have to pay taxes on inherited property in that situation) and providing an Energy Performance Certificate (EPC).