Home Selling in Norfolk>Question Details

Chandra Kuhn, Home Seller in Norfolk, VA

My siblings and I are selling a home that belongs to eight of us. One sibling does not want to give the title co. her social security #. The title

Asked by Chandra Kuhn, Norfolk, VA Sun Jul 18, 2010

co. says this is a must. Is this correct?

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BEST ANSWER
The need for the Social Security number is not limited to the IRS forms that most of the agents have responded with. It's to establish that there are no liens on the property with that particular social. So if John Smith is selling a house they want to make sure it's not the same john smith that didn't pay that hospital bill from 5 years ago. Typically an affidavit is signed saying I swear I'm not that person with all those debts. The LLC method will not work because they still need to research title to make sure that particular owner doesn't have any judgements on title prior to transferring their ownership. It sounds like you may have inherited a home. Sometimes with the transfer of assets all judgements the heirs have attached to their interest so creditors can get paid. If she refuses to sign that is a different story and would require a partition lawsuit to force them to sell their interest by a court. If it's just a matter of the social, the best way to solve that is have the heir meet the title person in person because it may just be a comfort and security issue. Refusal to sign is much more difficult to over come. The social is mainly needed by the title company to prove clear title of all liens and judgements of all the owners on title.
2 votes Thank Flag Link Sun Jul 18, 2010
Chandra it is necessary to sign the irs form w-9 upon the sale of the property if you are receiving proceeds. So as the sllers it is required she furnish the social security number os they can fill out this form for her to sign upon closing the home. it lets the irs know there was a home sale and there was a payout of proceeds.

Without her giving it to them, it could hold up your closing. She could hire her own attorney that would furnish the number to the cloing attorney and check the forms on her behalf to make sure that is all it is used for, but it would be an expensive expense when an attorney is already bound by laws of the state, bonded and has federal responsibilities from HUD when condutcing a closing. Let her know instead of giving it over the phone, fax or email, she could go in seperately and fill out the form herself and sign it for additional privacy.

Good luck with your closing
Web Reference: http://www.ScottSellsNH.com
2 votes Thank Flag Link Sun Jul 18, 2010
I'm not a lawyer, so this isn't legal advice. For that, you need a lawyer. However . . .

If her reluctance to provide a social security number is either some misguided attempt at privacy or a resentment of government somehow, then ask your lawyer about this approach. Have that sibling quit claim her interest in the property to one of the other siblings. Then she's no longer one of the owners. So now there are only seven owners, all of whom are willing to provide their social security numbers.

As a side agreement, your siblings can agree to compensate the reluctant sibling for her portion that she gave up.

Example: Suppose the property is worth $56,000. If that were divided 8 ways, you'd each get $7,000. The reluctant one gives up her share. Now the $56,000 is divided 7 ways, so you'd each get $8,000. Then each of the siblings gives $1,000 back to the reluctant one, and you each end up with $7,000 . . . just as you would have at the beginning.

In addition, check with an accountant to make sure that it's done properly from a tax standpoint.

Hope that helps. [You've already given someone else a "Best Answer," but maybe my answer deserves at least a "Thumbs Up"?]
1 vote Thank Flag Link Sun Jul 18, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Hi Chandra,

The title company is correct, as well as the answers other associates have provided. The sale of the home must be reported to the IRS and any net proceeds each of you "earn" from the sale will (should) be reported on your income tax returns as well. But you will not be able to close the sale until she provides her social to title.

Best wishes!

Frank Biganski, Realtor
(757) 303-0517
Reliance Realty at Port Warwick
Newport News, VA
1 vote Thank Flag Link Sun Jul 18, 2010
Has she given any reasons for why she continues to refuse to provide her SSN?
Is it possible that she's doing this on purpose to kill the sale?

You might check with a real-estate attorney to see whether it's possible for her to do the following to circumvent the requirement of providing her SSN: create a LLC, obtain an EIN for that LLC, quit claim her interest in the property to that LLC, and give the EIN to the title company. This is convoluted, and it will add a day or 2 (if handled electronically [ie not via snail-mail]).
1 vote Thank Flag Link Sun Jul 18, 2010
Good morning, Ms. Kuhn. My recommendation is that you seek legal advice on the question. You have presented a legal question, which is something for an attorney to answer. Good luck to you. Wayne Goodman
1 vote Thank Flag Link Sun Jul 18, 2010
Chandra this is a must because this is the only way the Title Company can make sure the "Seller(s)" doesn't have any liens or judgements against them thus encumbering the property. If this isn't done the buyer would not be able to obtain clean title (the title company wouldn't insure the property) and would probably walk away.
0 votes Thank Flag Link Wed Sep 15, 2010
Well you know the Government, if there is money involved, well they track it through a Social Security number, for tax purposes and for proper recording of dispursment of money. I have a real estate attorney that would be able to help you through this process. Email me at monette_55@yahoo.com or call at 757-735-2628. Good luck.

Kevin Monette
William E. Wood at the mall
0 votes Thank Flag Link Wed Sep 15, 2010
As a licensed Attorney and Realtor in Virginia, I am glad you asked this question. These sorts of questions arise all the time, and it is important to get the correct informaiton. The title company will need to process the sale of the home and will need all of the information from all of the siblings to make sure there are no liens on the property, so they can convey clear title. The social security number is a means to this end. If you need additional information feel free to call me at 757-472-8798. Jason Dodd
Web Reference: http://www.JasonEDodd.com
0 votes Thank Flag Link Thu Aug 12, 2010
Consulting a real estate attorney would be a good idea.
0 votes Thank Flag Link Thu Jul 22, 2010
Absolutely, all seller's must provide their social security number. At the end of the year, if this sale is taxable or not-taxable, each of you will receive a tax statement which is also filed with the IRS.
0 votes Thank Flag Link Thu Jul 22, 2010
Actually, the method of quit-claiming one's interest into a LLC does work, and it's done all of the time especially in land trusts. The key to executing the strategy correctly is the quit claim as Don discussed--not forming the LLC. In other words, the process of quit-claiming--as Don pointed out--would work just fine without the addition steps of involving the LLC. The point wasn't to hide/obscure the SSN; rather, it was to provide a viable substitute.

Besides, every EIN is tied to at least 1 SSN; the IRS treats EINs and SSNs similarly; and any decent title company, skip-tracer, attorney, or other similarly skilled professionals will know how to get the the SSN from the EIN. I know this, because I also do judgment recovery.
0 votes Thank Flag Link Mon Jul 19, 2010
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