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Author: wonderinggirl Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 16  
Subject: Buying land from parents Date: 5/22/2008 2:12 PM
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Hello, my parents are trying to tell me that if I give them a dollar I could be purchasing 5 acres of land next to their house. Is this true? If a court house was to actually take my information and their information and give me a deed, they could not be lieing to me could they? Someone please help me on this subject. This is the first time for me ever buying a piece of land or a house or anything.
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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3 of 16
Subject: Re: Buying land from parents Date: 5/22/2008 4:48 PM
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This sounds like they want to do some do it yourself estate planning which is almost never a good idea. I would post the question asking about tax and estate implications on the tax board - http://boards.fool.com/Messages.asp?mid=26669453&bid=100155

Other concerns - having the lot surveyed and deeded separately and understanding that the taxes are based on the value, not the price.

rad

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Author: ezragreen One star, 50 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4 of 16
Subject: Re: Buying land from parents Date: 5/23/2008 12:33 PM
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I don't think this is true and it sounds like some sort of evasion of some sort. Do you parents own the land they are trying to sell? I think there are laws of some sort that make them sell the land for near market value unless they gift it, then there is a gift tax if the land is worth more then 10k.


YOU CAN NOT AFFORD IT

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5 of 16
Subject: Re: Buying land from parents Date: 9/2/2008 10:53 PM
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<<Hello, my parents are trying to tell me that if I give them a dollar I could be purchasing 5 acres of land next to their house. Is this true? If a court house was to actually take my information and their information and give me a deed, they could not be lieing to me could they? Someone please help me on this subject. This is the first time for me ever buying a piece of land or a house or anything.
>>


If they own the land free and clear, it's relatively easy to transfer a portion of the land to a new owner. Selling property for $1 is common since a contract usually has to be for something of value.

But as others have suggested, such a casual transfer is probably not a good idea. Land is one thing where ownership is documented carefully, and a mistake might cloud the title or raise expensive legal issues decades from now.

The smart move would be to have an attorney process the sale, and inform everyone of the tax implications of what they are doing. That might cost $500 or so (to throw out a number) but it would be money well spent in my opinion.

If your parents wont do that, you can do it on your own, for yourself. In my county, the county bar association will arrange a 1/2 hour consultation with a lawyer specializing in the area of the law you are interested in for $50, and you can ask a LOT of questions in a half hour if you are prepared. You might consider calling your county bar association and see what they can offer you.


Personally, I'd see that attorney before you do the deal and see what he has to say. You could do it after they cobble up a sale, but then you might be looking at patching up a defective title, which might be more expensive than doing it right the first time.



Seattle Pioneer

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Author: legalwordwarrior Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6 of 16
Subject: Re: Buying land from parents Date: 9/3/2008 1:54 PM
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Hi wonderinggirl,

This is not legal advice:

We were in a similar situation with DH's parents earlier this year. Your parents are probably trying to do something with a Quit Claim Deed. It has jargon that reads in essence: "For the sum of one dollar ($1) and other valuable consideration" etc, etc, with the details of the land that you are purchasing from them. I don't know how common it is in other parts of the country, but we do this in Texas all the time. The thing is, it's not the initial cost that will get you. It's the taxes on the property after the sale. When DH and I considered this, the property involved was his parent's house. They purchased it brand new in 2002 and it is a lovely home in a great neighborhood. However, their taxes and insurance on the property run almost as much as our entire house note. We'll have our house paid off in the next 5-7 years, at which time our costs will drop to about $200 a month. We couldn't see the value in paying the higher taxes on their home. So bottom line, look at all the expenses(county taxes, city taxes, school district taxes, etc) that come with your $1 purchase and then determine if this is something you can afford.

LWW

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