Home Ownership in 94587>Question Details

 TJ, Real Estate Pro in Union City, NJ

How do I change the ownership of a home to parents to son?

Asked by TJ, Union City, NJ Tue Apr 2, 2013

Parents own a property in Union City and modification in progress. I am listed on the title-deed as a co-borrower, but not on the loan. I have a power of attorney done through the title company. I am currently making payments. Parents want to give me the complete ownershp. Please advice!

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Pacita Dimacali’s answer
I'm a bit confused....how can you be a co-borrower but not on the loan? Or did you mean you're a co-owner on title, but not on the loan.

If your parents want to give up their rights to the property -- usually this can be accomplished via quit claim deed. But that doesn't relieve them from their obligations to pay off the loan to the bank as long as the loan is in their name.

If you say that the property may be sold for more than the balance of the loan, and if neither you nor your parents want to keep the property, then go ahead and sell it on the open market.

But if you want to keep it, get yourself preapproved for a loan, and buy out your parents, assuming that the new purchase price and loan are enough to payoff your parents' loan. That may be the simplest thing to do.
0 votes Thank Flag Link Tue Apr 2, 2013
If I were you and can afford it, I'd buy out my parents. Let them enjoy the rest of their retirement worry free. But if you're trying to eliminate more closing costs later, then consider just selling it especially now that we are in a seller's market. You just never know what can happen later. But that's what I would do in my circumstances.
Flag Tue Apr 2, 2013
Hi Pacita, Sorry for the confusion. yes, I am a co-owner. I am currently renting out the property and plan to sell it in few years. If that is the case, should I just buy out from parents now..or wait until when it's time to sell and do the sale with the power of attorney that I have in hand. Just trying to eliminate the new closing clost.
Flag Tue Apr 2, 2013
Parents' thought about forclosing so they didn't make payments for about six months and when it was about to go on auction, I contacted the bank and worked with them to get the modification. It was under water, but not in today's market. It's a townhouse 3 bed, 2.5 bath with 1137 sqft. Loan balance about $255K with late fee and attorney fee etc. In today's market I can see it going for minium $345K.
0 votes Thank Flag Link Tue Apr 2, 2013
The most straight-forward thing to do, is to qualify for your own loan and buy out your parent's interest in the home (which means paying off their loan and associated fees). In return, you'll have clean title and ownership of the home, with no other loans, modifications or foreclosure auctions to worry about.

Then you'll be free to sell the home at your leisure, whenever.

Flag Tue Apr 2, 2013
A 'Grant Deed' would likely be the correct form to complete and have recorded. You should discuss this with a real estate attorney and/or your tax accountant. You may wish to inform the loan modification company/lender of this change as this might effect that process.

0 votes Thank Flag Link Tue Apr 2, 2013
If you are in the midst of a modification I assume the property is underwater. If you have negative equity you will not be able to refinance to your name.
0 votes Thank Flag Link Tue Apr 2, 2013
Hi, Yes, Co-Owner and not a co-borrower. Even if I see an attorney, I would still have to go through the process of getting the loan under my name right?
0 votes Thank Flag Link Tue Apr 2, 2013
I agree with John: Your question doesn't make sense.

The deed doesn't address borrowers. It only shows ownership. It's the note or mortgage that shows who the borrowers are.

You say you're not on the loan. So I'm guessing you're a co-owner. And you say your parents want to give you complete ownership.

That's easy. Any real estate lawyer can help you.

However, please check with an accountant. There are all sorts of tax implications as well. There are a number of different ways to handle it (I'm not a lawyer, but the options range from a quit claim deed to the use of a trust), each with different tax implications for you and your parents.

Hope that helps.
0 votes Thank Flag Link Tue Apr 2, 2013
Don Tepper, Real Estate Pro in Burke, VA
Ok...it sounds like I have to hire a real estate attorney, but what is the difference betwen hiring a real estate attorney and refinance to loan to change the ownership? What would be more reasonable, interms of cost?

Also, the goal is to sell the property in a year or two.
0 votes Thank Flag Link Tue Apr 2, 2013
I recommend you see an attorney. He/she will handle the transfer for you with the county. You will probably need to qualify for the financing.
0 votes Thank Flag Link Tue Apr 2, 2013
Your statement that you are a co-borrower but not on the loan does not make sense. I suspect you mean that you are shown as co-owner.

What I think you are saying is that you are on the deed with your parents but not on the loan.

Do not make any changes until you have gotten your modification approved. Making a change in title will only cause confusion. If you are not on the loan, it is not your loan that is being modified and having your parents transfer full ownership to you does not relieve them from the burden of responsibility for the loan. You may be making the payments but it is your parent’s loan.
0 votes Thank Flag Link Tue Apr 2, 2013
Hi John, that is correct. I am a co-owner and not a co-borrower. Thank you for yoru input.
Flag Tue Apr 2, 2013
I would contact a Real Estate Attorney. You don't really require a real estate agent and should be able to draft documents to transfer ownership with the assistance of an attorney.
0 votes Thank Flag Link Tue Apr 2, 2013
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