Cash Transaction Between Siblings

mdfaccMarch 26, 2010

Hello everyone. What steps must siblings take if one sells a home to the other?

In this case, one sibling owns a home with no mortgage and will sell it to a second sibling for cash, with no bankers or realtors involved. The buyer should obtain title insurance, but is there anything else that should be done? Can the seller just sign the deed to the house (as with a car) and give it to buyer in exchange for a check, and that's it?

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You obviously don't need to pay 6% to a realtor, but you REALLY need to pay for a lawyer, title insurance etc. If it has been in the family for a while, I'd recommend a survey too.

    Bookmark   March 26, 2010 at 9:17PM
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You need an RE lawyer in the worst way because of unanticipated problems down the road (should they arise), and/or things like capital gains taxes, or other things that you may not know about.

    Bookmark   March 26, 2010 at 10:32PM
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Agree that you should speak to a lawyer. In my state the sale must be reported, and there are property transfer taxes paid by the seller based on the sales price.

    Bookmark   March 27, 2010 at 8:32AM
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lawyer lawyer lawyer

or title co title co title co.

Buyer needs at least a title policy & a survey, &, here anyway, the sale should be recorded with the county clerk to protect the buyer from, among other things, the seller's creditors.

If no sale has been recorded, & the seller has a tax lien, the house could be sold by the IRS, & the buyer wouldn't know until somebody came by with an eviction notice.

or the seller could die, & the executor could do a search of county tax records & find the house & list it in the assets of the estate & sell it.

or the seller could die, & leave "all my worldly goods" to his/her only child, & the child could take out a home improvement loan on the house & never pay a dime, & the house would be foreclosed.

or the seller could receive all the property tax notices & ignore them, & the county tax office could sell the house...

Really, you need a lawyer or a title company.

    Bookmark   March 28, 2010 at 5:16PM
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