split property

[rhernand_455]

What is the name of your state?

CALIFORNIA:
I just need some hints on what would be the best way of transferring a property from one person to another. Here is the situation:

Two brothers "A" and "B". Brother "A" purchased a home in 1999 with a big size lot. He financed the home through one bank and currently has a mortgage. In 2000, brother "A", legally divided the property into two lots. In one of the lots, he remodeled his home. The other lot is an empty lot. Now brother "A" wants to sell the empty lot to Brother "B". Since they are brothers, they want to make sure that they do this in a way that will be the least costly for both. Here is how I understand the process.

1) Get a Market Assesment on the value of the empty lot
2) Brother "A" would have to refinance since the current property is under a mortgage that is secured by the entire lot (i.e. both lots prior to split).
3) Get a title company to create a title insurance for brother "B"
4) Brother "B" would have to pay brother "A", the Market Assesment value.

Does brother "A" qualify for "Taxpayer Relief Act of 1997" (Home-Sale-Tax 250k (500K if married) exclusion?)

Is the above the correct process?

 

[HomeGuru]

What is the name of your state?

CALIFORNIA:
I just need some hints on what would be the best way of transferring a property from one person to another. Here is the situation:

Two brothers "A" and "B". Brother "A" purchased a home in 1999 with a big size lot. He financed the home through one bank and currently has a mortgage. In 2000, brother "A", legally divided the property into two lots. In one of the lots, he remodeled his home. The other lot is an empty lot. Now brother "A" wants to sell the empty lot to Brother "B". Since they are brothers, they want to make sure that they do this in a way that will be the least costly for both. Here is how I understand the process.

1) Get a Market Assesment on the value of the empty lot
2) Brother "A" would have to refinance since the current property is under a mortgage that is secured by the entire lot (i.e. both lots prior to split).

**A: unless the current lender agrees to either release or subordinate to the new lender on Lot B.
*******


3) Get a title company to create a title insurance for brother "B"

**A: this is moot since title insurance would not have anything to do with affecting the current mortgage although title insurance is a must.
********

4) Brother "B" would have to pay brother "A", the Market Assesment value.


**A: no, appraised value as determined by the new mortgage company's appraiser for lot B.
*******
Does brother "A" qualify for "Taxpayer Relief Act of 1997" (Home-Sale-Tax 250k (500K if married) exclusion?)

**A: no, since he is not selling a home or his home.
*******
Is the above the correct process?

**A: see above.