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Old 11-15-2020, 09:52 AM   #21
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If you do do an interfamily sale, make sure you don't have some real estate person who thinks they deserve a commission. I'd have the listing agreement end every month and keep renewing for the external sale, and just not renew it if the family sale was pending. The alternative would be to try to write in the exclusion, but that might be something you'd have to defend, which could be trouble.
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Old 11-15-2020, 11:33 AM   #22
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Not everyone has the means to do this, but an option could be for someone in the family to buy the house at market price so she could get the exclusion. Keep the house on the market and when it finally sells you get your money back. You wouldn't get the exclusion since it was never your main house, but the gain/loss should be negligible.
We definitely thought of doing that when we were in the last 6 months or so and it wasn't selling quickly.

The only snag is that we already retained a real-estate agent to sell the house -- who also happened to be a friend. Executing the strategy of selling to ourselves might have upset that relationship so I let it play out and, in the end, it sold to a retail purchaser.

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Old 11-15-2020, 01:06 PM   #23
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If you do do an interfamily sale, make sure you don't have some real estate person who thinks they deserve a commission. I'd have the listing agreement end every month and keep renewing for the external sale, and just not renew it if the family sale was pending. The alternative would be to try to write in the exclusion, but that might be something you'd have to defend, which could be trouble.
A thought - a broker may not be needed for an interfamily sale. A (true) professional appraisal, with comps, might be of help to establish fair market value. Also, if the buyer takes out a mortgage, the appraisal done by the bank could serve as support for fair market value.
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Old 11-16-2020, 12:09 PM   #24
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A thought - a broker may not be needed for an interfamily sale. A (true) professional appraisal, with comps, might be of help to establish fair market value. Also, if the buyer takes out a mortgage, the appraisal done by the bank could serve as support for fair market value.
Certainly there's no need for any commission grabber when you sell to a family member. Even the selling price might not be a big deal if the person buying is going to end-up inheriting the house after the seller passes. The point I was trying to make was you need a way to keep the real estate people out of it, and if you signed contract, those are written such that you owe the commission whether they had anything to do with the sale or not. They can even claim, believe it or not, that they deserve a commission after the contract ends if they think that the deal hatched during the time when the contract was in effect. If I thought the house might not sell right away, and I was running into a deadline, I'd have the contract end well before the deadline, plus, I'd get a lawyer to write an addendum that said the real estate agents had no claim for a commission if the house was sold to a family member.
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