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Home Selling in 86046 : Real Estate Advice

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Wed Apr 28, 2010
Don Tepper answered:
It depends on how the property is titled.

I'm not a lawyer, so this isn't legal advice. For that, you need a lawyer.

One way to title a property is "tenants in common." In that case, each owner owns a specific percentage of the property. You might own 25%, and each of your three siblings might own 25%. In this case: Yes. You can sell your portion--your 25%--to anyone you want. Also, that specific percentage can be willed to someone else.

Another way to title a property is "joint tenancy." In that case, two or more people both own a property. But it's not divided up. In the example above, if 4 people own a property in joint tenancy and one person dies, that portion of ownership flows to the survivors. You can't take your portion and sell it, or transfer it to someone else.

Note, though, that even with tenants in common, the amount you receive if you sell it to someone else is likely to be below market value. In the example above, let's say the property is worth $100,000 and 4 people each own 25%. Then, each share is worth $25,000. But if you wanted to sell it on the open market, someone probably would offer you a lot less--$5,000, maybe, or $10,000. That's because there isn't much you can do with 1/4 of a property. If it's producing positive cash flow and the cash flow's being divided among the owners, then the value will be determined based on return on investment (cap rate). And that might be a lot or very little.

So, two points: Whether you can sell depends on how the property is titled. And even if you are able to sell a portion, you'll probably get substantially below the percent value of the entire structure.

Hope that helps.
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