Selling a house can often be stressful and complicated.
You need to deal with multiple parties and buy a new property at the same time.
But there is an alternative option: Selling your house privately to a friend.
This blog will explore how to do it and its advantages (and disadvantages).
Can I sell my house privately to a friend?
In short, yes.
Selling your house privately to a friend, family member, or acquaintance, is possible.
Can you gift a house?
You can also give a house as a gift.
This is different to selling. But it comes with its own costs and tax implications for the recipient.
Reasons to sell privately to a friend
To sell quickly
Sometimes, a seller needs to sell their house quickly. If someone they know also wants to buy it, 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.
To save costs
Selling your house carries costs.
Many of these costs come from marketing the property, which estate agents usually do.
To save effort
Home sellers are involved in many aspects of the sale process, including:
Selling privately may still involve these. But when it does, it will only be with one person.
To help a friend out
Sometimes, it may be that they simply want to help out a friend who is looking for a new home.
For flexible terms
Plus, when selling a property to a friend, it’s possible to negotiate the terms of the sale directly with them.
And, when selling to a person you know, you may be able to agree on a lower price. Or more flexible payment terms compared to traditional buyers.
For certainty
Certainty is an important part of property sales.
When sales are uncertain, they are often more likely to fall through. This can have many consequences.
Drawbacks of selling privately to
Potential to strain friendship
There’s always a risk that selling to a friend might damage your friendship if things go wrong.
There could be disagreements over the property’s condition or if the sale falls through.
Potential loss of profit
Your friend may not be able or willing to pay the property’s total market value. This reduces your profit from the sale.
How to sell a house privately to a friend
1. Get a valuation
Before agreeing on a sale price with your friend, you will need to know how much your property is worth.
You can do this by getting a valuation from an estate agent or surveyor.
2. 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 request. 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.
3. Hire a solicitor
Despite selling privately, it is still necessary to hire a solicitor.
They will ensure:
- Ownership is transferred
- Paperwork is collected
- Searches and checks are carried out.
4. Organise a survey
Your friend may wish to survey the property before the sale is finalised.
It helps you avoid potential disputes later. Buyers typically will arrange and pay for the survey.
5. Exchange contracts
Once the terms of the sale are agreed, you can exchange contracts.
In traditional house sales, this can take between a week and a month.
This makes the sale legally binding. A completion date will also be agreed on.
6. Complete the sale
On the completion date, the solicitor will transfer the money from the sale to you. Your friend will become the new official owner of the property.
You will need to arrange for the following to be handed over to your friend:
- Keys
- Documentation
- Deeds to the property.
Although this type of sale is private, you must still comply with legal requirements. This includes paying necessary taxes and providing an Energy Performance Certificate (EPC).
