A family member is living in my home, which I must sell. They won't move until the place is sold and say they will make the new owners evict them. Can I even sell the house with the person living there? This is in Michigan. It's a private sale to a different family member - I need the money to get out of debt. Do I have to evict the family member first?

At closing the buyer will rightfully expect to be able to move in. If your unwanted houseguest fails to move at that time, you and your guest would be sued for eviction. If I were the judge I would award costs and attorney fees (if, as is usual, they are provided for in the purchase contract) which you would have to pay.

You should evict (i.e.: give her/him the required notice and then sue) him or her now.

It depends. Certainly you can sell the property. However, your buyer may decide not to buy if he has to go through the hassle of an eviction. So you should do the eviction first.

At closing the buyer will rightfully expect to be able to move in. If your unwanted houseguest fails to move at that time, you and your guest would be sued for eviction. If I were the judge I would award costs and attorney fees (if, as is usual, they are provided for in the purchase contract) which you would have to pay.

You should evict (i.e.: give her/him the required notice and then sue) him or her now.

This is what I expected. The buyers don't know the person isn't planning on being moved at closing of the sale - I just found this out. I would expect to have it held against me, as the previous owner for not disclosing this, too. Thanks for your help. Have to try to get them to see reason.

It depends. Certainly you can sell the property. However, your buyer may decide not to buy if he has to go through the hassle of an eviction. So you should do the eviction first.

Thanks for the helpful answer. I didn't expect this problem. It might be easy to solve if I could just get people to talk to each other.

You could try the 'cash for keys' approach that people who have to foreclose or move back into their own houses use - they bribe.
You and the relative who is buying can pool some amount to negotiate with. Your logic is very simple: take what we offer you now, or get evicted a short time later and get nothing.
Have the eviction papers and process needed from your local or county courthouse so that you can follow through, and be prepared to do so, because some people won't budge for anything, and have to be removed by the sheriff.