How do I sell my home to my son?

D

Denpsey27

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Hi.

I have a house with €30k left on the mortgage. It was recently valued at €160k.

My son would like to buy it off me and then rent it out.

What is the best way to go about this so that both of us are getting a good deal.
 
Denpsey27 said:
Hi.

I have a house with €30k left on the mortgage. It was recently valued at €160k.

My son would like to buy it off me and then rent it out.

What is the best way to go about this so that both of us are getting a good deal.
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Do you see some complication?

If you do it in the same way as an ordinary sale to a stranger, the following are the steps.
1) Your son gets mortgage approval from his bank to buy it.
2) You both go to separate solicitors
3) When you are ready to complete the transaction, his solicitor gets the mortgage from the bank.
4) His solicitor pays €160k to your solicitor
5) Your solicitor pays your bank €30k to clear the mortgage
6) Your solicitor pays you €130k less her fees.
 
As it will be an investment for him, make sure that you don't sell it at undervalue.

For example, if you argue that it is worth just €130k, it will mean that when he sells it, he will have a higher bill for Capital Gains Tax purposes.

If you want to help him out... Sell it for the full price - €160k. Then give him a gift of €30k cash.

Brendan
 
Get independent valuations, decide on 2 or 3. Take the average figure. Have two separate solicitors, sell to him for the agreed price.
 
Clamball said:
Get independent valuations, decide on 2 or 3. Take the average figure.
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No way, it's quite sufficent to rely on a single independent valuation from a valuer whom you know is prepared to robustly defend it if it is challenged.

Apart altogether from the expense of commissioning multiple valuations and splitting the difference, by doing so you'll be effectively contradicting the evidence you've purchased and paid for, and having no valuer responsible for and available to defend the valuation you ultimately specify.
 
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I thought getting 2/3 valuations would lead to a fair sale price for both the Dad and the son. The ultimate test would be put it on the open market and let to son be the highest bidder, but in lieu of that an average of a higher and lower valuation seems fairest. I was not thinking of it being questioned in open court.
 
Clamball said:
I thought getting 2/3 valuations would lead to a fair sale price for both the Dad and the son.
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Most valuations aren't necessarily accurate.
I've been involved in getting a few properties valued with estate agents and independent valuers over the past few years and it's usually a case of "we'll value (and list) it at €x but if you go to market you could probably get up to €y" where y is often significantly higher than x. And then there's the erring on the low or high side depending on the circumstances and how much nodding and winking goes on - probate, separation/divorce, etc.
 
Leo said:
It may well be the ultimate test, but will results in the payments of thousands in fees?
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Yeah, probably c. €2k on a €160k property assuming a competitive agent's fee of 1% + marketing costs of a few hundred + VAT.

For this sort of sale from parents to child it should be feasible to arrive at a fair market price by checking the property price register and recent listings of comparable properties for guidance.
 
Reactions: Leo
Clamball said:
The ultimate test would be put it on the open market and let to son be the highest bidder
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Many prospective buyers are generally reluctant to place bids if they become aware that a relative of the vendor is likely to be bidding against them. If they sense that the entire process is a sham designed to test the market, they'll run a mile.
 
T McGibney said:
Many prospective buyers are generally reluctant to place bids if they become aware that a relative of the vendor is likely to be bidding against them. If they sense that the entire process is a sham designed to test the market, they'll run a mile.
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Indeed - shill bidding.
 
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