Home Selling in Los Angeles>Question Details

Amanda, Home Buyer in Los Angeles, CA

On a regular sale (meaning not short sale or foreclosed -- with updated payments though not yet finished the

Asked by Amanda, Los Angeles, CA Thu May 7, 2009

30 yr mortgage) Is it LEGAL to sell your property to your relative?

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3
The way you phrased your question makes me wonder if , perhaps, you're asking about something else besides a regular, normal sale - Sometimes people ask me about transferring a property to a family member subject to the existing loans - in other words, transferring title and taking over the payments, rather than getting a new loan. And with the state of our market - short sales and lack of equity, it becomes a more and more common question. .

Usually taking title subject to the existing loans puts a borrower in a dangerous position because this can trigger the "Accelleration Clause" - in other words, the bank, if they find out about it, can call the loan due and payable on the spot. In the case of certain inter-family transfers, however, in California, a bank cannot call the loan due. The risk would remain, however, that if the family member did not make timely payments, this could continue to affect the credit of the original borrower.

Before one did something of this nature, however, it would be prudent not only to seek out the services of an experienced real estate broker, to be sure both parties truly understand the transfer, and what they are agreeing to - AND consult with a real estate attorney. Whenever we invoke creative practices regarding real estate law, it's best to pay the money and get some solid legal advice.

Jeri Creson, Broker
TotalAccess Realty Advisors
0 votes Thank Flag Link Wed Jun 10, 2009
It is not illegal. The lender might order extra reviews of the appraisal just to protect their interests. As you can see the bank looks at the risk of having a family member purchase and over pay so that the owner could walk away w/ extra proceeds and then the new borrower walks away from the loan. You might think I'm crazy but it's happened. Now that would be illegal.
This is just my opinion and any legal questions should always be directed to a qualified real estate attorney.
0 votes Thank Flag Link Thu May 7, 2009
Hi Amanda,
You can sell your property to anyone who qualifies for a loan, if they obtain a loan.

Best,
Tova Sarir
Keller Williams Realty Beverly Hills
homes@tovasarir.com
310-497-1930
Web Reference: http://www.tovasarir.com
0 votes Thank Flag Link Thu May 7, 2009
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