Posted on: 02nd Nov, 2009 02:58 pm
This is a very confusing situation, and I hope someone can help! My three siblings and I inherited our family home. One brother gave up his interest for cash. The remaining siblings have a 40-40-20 ownership in the house. My husband and I have moved into the family home and are selling our home to my sister.
The plan is this: My sister will buy our house with a loan for what we owe on it and with $150,000 of her equity in the family home.
So, my husband and I are giving up our equity in exchange for hers.
Another note - my parents' estate isn't even settled yet, so the deed to the family home is still in trust.
Is this insane? How do we do this? Is a quit claim appropriate? What documentation is required for a real estate contract and the bank? We can't afford an attorney after paying the estate lawyer a bazillion dollars.
We're in Virginia.
The plan is this: My sister will buy our house with a loan for what we owe on it and with $150,000 of her equity in the family home.
So, my husband and I are giving up our equity in exchange for hers.
Another note - my parents' estate isn't even settled yet, so the deed to the family home is still in trust.
Is this insane? How do we do this? Is a quit claim appropriate? What documentation is required for a real estate contract and the bank? We can't afford an attorney after paying the estate lawyer a bazillion dollars.
We're in Virginia.
I'm also wondering if it is better to deal with these scenarios separately. Should we do a gift of equity on our house that my sister is buying and deal with the family home issues later? We won't be squabbling about it later, but we need to sell the house right now!
Hi gratefulhoo,
In opinion, it would be better if you could settle the estate of your parents first and then transfer the property to your sister. However, it is always a better idea to contact an attorney and take his opinion in this regard. Once the property is property is transferred to you after the trust settles, you can sign a quitclaim deed and transfer the property to your sister.
In opinion, it would be better if you could settle the estate of your parents first and then transfer the property to your sister. However, it is always a better idea to contact an attorney and take his opinion in this regard. Once the property is property is transferred to you after the trust settles, you can sign a quitclaim deed and transfer the property to your sister.
It will be months before the estate settles - these things take forever! We're having some financial problems, so we need to sell the other house to my sister ASAP (before a foreclosure).
I think we have these choices:
1. Do gift equity of $24,000 to my sister for her down payment, and the house sells for about $185,000 ($125,000 below the tax assessment). She would then do a quitclaim on the family home, but the house (and neighborhood) has been devalued.
2. Do gift equity of $150,000 so the ultimate equity exchange is equal. My sister would do the quitclaim on the family home and we'd be even, but we'd get socked with the gift tax business.
3. Figure out how to trade $150,000 in equity as part of the sales transaction.
4. Figure out how a buyer PAYS with equity in another property? I don't understand how that works. What documentation would be required?
I think we have these choices:
1. Do gift equity of $24,000 to my sister for her down payment, and the house sells for about $185,000 ($125,000 below the tax assessment). She would then do a quitclaim on the family home, but the house (and neighborhood) has been devalued.
2. Do gift equity of $150,000 so the ultimate equity exchange is equal. My sister would do the quitclaim on the family home and we'd be even, but we'd get socked with the gift tax business.
3. Figure out how to trade $150,000 in equity as part of the sales transaction.
4. Figure out how a buyer PAYS with equity in another property? I don't understand how that works. What documentation would be required?
gratefulhoo...I think it would be a good idea to contact a real estate attorney and take his opinion in this issue. He would help you know whether the choices that you have would be good eough for you.
grateful you've posted 3 times and not made mention of an attorney once. i don't get that. here you are, involved in one of the most convoluted real estate transactions that could ever be, yet you don't even acknowledge that you might require an attorney's assistance. i've even seen this suggested to you here, yet you don't acknowledge the suggestion.
in my opinion, nobody - unless they have their own first-hand knowledge of real estate - should enter into a real estate transaction without the aid of an attorney who specializes in real estate.
your scenario is far too complex for the average person to decipher, let alone provide sound advice about. we have many who are average yet possess much knowledge in the field of lending, and i dare say that we (i include myself) would be in agreement about the need for legal advice.
i can't say it enough or loud enough: get a lawyer to work with you.
in my opinion, nobody - unless they have their own first-hand knowledge of real estate - should enter into a real estate transaction without the aid of an attorney who specializes in real estate.
your scenario is far too complex for the average person to decipher, let alone provide sound advice about. we have many who are average yet possess much knowledge in the field of lending, and i dare say that we (i include myself) would be in agreement about the need for legal advice.
i can't say it enough or loud enough: get a lawyer to work with you.
The reason I haven't mentioned an attorney is that we can't afford one. As I said above, we're facing foreclosure necessitating a quick turnaround on this before my sister doesn't have a house to buy! I'm also not really certain if this is a real estate issue or a tax issue or a combination thereof!
I know it's complicated, but I thought I'd give it a shot on here! Sometimes what a layman thinks is complicated is actually fairly simple from a professional's perspective.
I know it's complicated, but I thought I'd give it a shot on here! Sometimes what a layman thinks is complicated is actually fairly simple from a professional's perspective.
if there's a legal aid society (or any other names they go by) in your area, call them. they are established for the purpose of assisting those who lack the funds to hire an attorney. in my opinion, when you're dealing with something as complex as what you describe, you cannot afford not to have an attorney working for you. i understand your reluctance, but at least call one so you can find out if there's any free legal help available to someone in your situation.
that's my best effort to help you, i'm afraid. even with all the experience i've gained over the years, i don't have any special advice that i can pass along to you other than that.
that's my best effort to help you, i'm afraid. even with all the experience i've gained over the years, i don't have any special advice that i can pass along to you other than that.