09 Apr Selling a House to a Family Member in St. Louis: 8 Steps

Yes, you can sell your house to a son, daughter, sibling, or parent in St. Louis, and the deal closes the same way any other sale does: a written contract, a title company, and a deed recorded with the Recorder of Deeds. What changes is the paperwork around price. The IRS, your relative’s lender, and (down the road) Medicaid all care whether the number on the contract matches what the house is actually worth.

Two things you do not have to worry about: Missouri has no real estate transfer tax and no gift tax. Nobody at the City or County collects a percentage of the sale price when a deed changes hands. Here are the eight steps that actually matter.

1. Get an appraisal before you pick a price

A sale between relatives is what lenders call a non-arm’s-length transaction. Fannie Mae’s Selling Guide allows them, but the buyer’s lender will order its own appraisal and underwrite the file more carefully. The IRS also measures any “gift” by fair market value, not by what the family agreed on at Thanksgiving.

Order an independent appraisal first, or ask us for a comparative market analysis. Put that number in the file. If you then sell below it on purpose, everyone knows exactly how much was a gift.

2. Learn the federal gift rules (and stop worrying about Missouri’s)

If you sell for less than market value, the difference is a gift. According to the IRS, the annual gift exclusion for 2026 is $19,000 per recipient, and a married couple can each give that amount. Anything above the exclusion has to be reported on Form 709, but it only reduces your lifetime exemption, which the IRS sets at $15 million per person for 2026. For almost every St. Louis family, reporting is required and tax is not.

Missouri imposes nothing on top of this. There is no state gift tax, and the Missouri Constitution bars new transfer taxes.

3. Structure a gift of equity if the buyer needs a mortgage

The clean way to sell at a family discount to a borrower is a gift of equity. Under Fannie Mae guideline B3-4.3-05, the discount counts toward the buyer’s down payment and closing costs (not reserves), the property must be a principal residence or second home, and the file needs a signed gift letter plus a settlement statement showing the gift. The seller is not treated as an “interested party,” so the usual seller-contribution caps do not apply.

Practical example: the house appraises at $300,000, you sell to your daughter for $260,000. The $40,000 gap is her down payment, on paper, without a dollar leaving her savings.

4. Know your own tax picture

Your gain is the price minus your adjusted basis (what you paid plus capital improvements). Under IRS Topic 701, you can exclude up to $250,000 of gain, or $500,000 on a joint return, if you owned and lived in the home for at least two of the last five years.

At the state level, Missouri House Bill 594 lets individuals deduct 100 percent of federally reported capital gains from Missouri adjusted gross income starting with tax year 2025, according to the Missouri Department of Revenue. So the old worry about a Missouri capital gains bill is gone for individual sellers.

One wrinkle for the buyer: the gifted portion carries your basis, not the discounted price. That can mean a bigger taxable gain when your relative sells someday. This is the step where a CPA earns their fee.

5. Put it in a real contract and disclose like a stranger is buying

Missouri has no general statutory seller-disclosure law, but the Missouri REALTORS Seller’s Disclosure Statement is standard in every St. Louis transaction, and filling it out honestly protects you from your own nephew’s lawyer later. If the house was built before 1978, the federal lead-based paint disclosure and pamphlet are required no matter who the buyer is, per the EPA.

Use a standard sale contract with a closing date, inspection period, and a clear “as-is” or repair agreement. Family memories fade; signed pages don’t.

6. Close at a title company and record the deed

Missouri closings run through title companies, not attorneys. The title company searches the title, issues the owner’s and lender’s policies, prepares the warranty deed, and handles the money. If you are carrying the financing yourself, have a real estate attorney draft the note and deed of trust.

After closing, the deed is recorded with the City of St. Louis Recorder of Deeds (a standard deed is $23 for the first page and $5 per additional page, per the City) or the St. Louis County Recorder of Deeds in Clayton, depending on which side of the city line the house sits on.

7. Check the Medicaid look-back before you discount

If the seller is older, a below-market sale can backfire. Federal Medicaid law (42 U.S.C. 1396p) sets a 60-month look-back on transfers for less than fair market value, and MO HealthNet applies it when someone applies for nursing home coverage. The gifted portion of a family sale can trigger a penalty period of ineligibility. Talk to an elder-law attorney before, not after, you sign.

8. Use an agent anyway

A family sale skips the marketing, not the work. We still pull comparable sales, coordinate the appraisal and inspection, write the contract, chase the lender’s gift-of-equity paperwork, and sit at the closing table. Our home-selling services can be scoped to exactly what you need, and if you want a second opinion on price first, our St. Louis market report shows what similar homes are actually closing for.

A word of caution

This post is general information, not tax or legal advice. Gift, capital gains, and Medicaid rules change and depend on your facts. Before you sign anything with a relative, run the numbers past a CPA and, if a discount or seller financing is involved, an attorney.

Thinking about selling to family in St. Louis? We’ve walked plenty of parents, kids, and siblings through it. Book a free consultation or call us at (314) 802-0797, and we’ll help you set a price everyone can defend. If you’d rather sell on the open market, our home-selling guide is a good place to start.