Considering selling half of my house to my stepson.
What are the pros and cons.
Would like to pm someone who knows real estate.

Half?

Like, split the land in half?

Or, divide the house into two apartments and selling one?

Or, selling an undivided one half interest?

Unless you are subdividing the land into two properties and selling half to him outright, then selling "half" of anything is nothing but cons and you'd be best to avoid it. Especially if you aren't already well versed in real estate law.

As far as bad ideas, it's right up there with marrying the girl you just met at the bar before your deployment, or cosigning on a loan for your ex wife.

Yeah, it'd be helpful to know what you're trying to accomplish with this.

Because selling half the house to him is unlikely to be the best option to achieve whatever that is.

I agree with Aetocles and RogueJSK.

You have to tell us what the purpose of the transaction is. There is probably a better way to do it.

And owning an undivided interest in a piece of RE is like being business partners with someone. You better be damn sure that is someone you want to be business partners with.

quote:

Originally posted by jhe888:
I agree with Aetocles and RogueJSK.

You have to tell us what the purpose of the transaction is. There is probably a better way to do it.

And owning an undivided interest in a piece of RE is like being business partners with someone. You better be damn sure that is someone you want to be business partners with.

Don't forget when you become business partners with someone you also get their creditors, heirs, and spouses. A creditor, ex-spouse, or heir to his estate will not even flinch when kicking you off the property to sell his "half" of it at auction.

JSK.
Just sent you an email

Is there someway to prevent his half from being sold

Replied. Please post that explanation in the thread, if you're comfortable. That will help guide others' responses. And others are more knowledgeable than me in this area.

I sent a more detailed response in my email. But in a nutshell (and without referencing your specific situation since you haven't publicly posted it yet), I don't see how selling him half the house right now is necessary to achieve what you're wanting, and it comes with some dramatic potential downsides.

quote:

Originally posted by 9mmnut:
Is there someway to prevent his half from being sold

Possibly, depending on your specific state laws, but then you aren't really selling him "half". Part of "owning" something is the intrinsic right to be divested of such right (or have it taken from you). You can likely build a bunch of limitations around what he can do with his ownership right (e.g., reserve for yourself a right to live on the premises until you die), but whatever right he owns can and will eventually be passed on to someone else.

This would involve lawyers. The pricey kind. Not the run-of-the-mill kind. Rich people spend six or seven figures in lawyers fees to make sure their charitable gifts of property continue to be used in the way they intended it when gifted, and that shit still goes to court when someone wants to build a condo when it was supposed to stay a park.

Regardless, it's still (and always will be) a bad idea.

There is a cornucopia of issues. Many are multi-layered.

You must consider
Legal - how will ownership in the deeds be written?
Estate planning
Tax - both now and your estate
How will you deal with:
Up keep expenses
Repairs
Improvements
Him or you gifting or selling your interest?
Can either of you take out a mortgage?
If it applies Medicaid/Public Aid if you need skilled care.

This is something you need to discuss with a local attorney. There are many downside and little upsides.

I'm a real estate lawyer, but not licensed in the O.P.'s indicated state of residence.

Generally speaking, the nearly universal answer to this sort of question is "it's a bad idea" and doesn't accomplish the goal(s) of the parties.

I imagine if we were to drill into matters a little more, what's really going on is something that would be better addressed through estate planning - which is something that should be done with the assistance of an attorney that practices in the field.

only sell 49% interest in your house with first option to buy back at original sales price?

quote:

Originally posted by LS1 GTO:
only sell 49% interest in your house with first option to buy back at original sales price?

No. Just no.

Depends on what you are trying to do. If you want to sell (or gift) him the house at a steep discount, selling or giving an undivided partial interest can allow for steep discounts in value. You could spread it out over multiple years and decrease the amount subject to gift tax.

If you are not trying to eventually convey the whole house while lowering the amount that may be subject to gift tax, you are taking on a partner with all of the cons already mentioned and I dunno what pros.

ETA: And if you are trying to do something like that, as LoboGunLeather points out, you definitely want to use an attorney in your state of residence (assuming that the house is in that state). The attorney will have the right connections for the appraisers to get good, but solid, defendable discounts.

This message has been edited. Last edited by: slosig,

quote:

Originally posted by ShneaSIG:
I'm a real estate lawyer, but not licensed in the O.P.'s indicated state of residence.

Generally speaking, the nearly universal answer to this sort of question is "it's a bad idea" and doesn't accomplish the goal(s) of the parties.

I imagine if we were to drill into matters a little more, what's really going on is something that would be better addressed through estate planning - which is something that should be done with the assistance of an attorney that practices in the field.

^^^THIS RIGHT HERE^^^

Footnote: Please consult a competent attorney in your state of residence instead of seeking legal advice on an internet forum. A couple hundred bucks now might just save you a great deal of misery for the rest of your life.

Rent him half of the house.

quote:

Originally posted by kimber1911:
Rent him half of the house.

Please stop giving legal advice. You don't even know what he is trying to accomplish.