Donna, Home Buyer in Houston, TX

I bought a house with a friend, but she has moved out and I would like to buy her share out. I qualify for

Asked by Donna, Houston, TX Fri Feb 8, 2008

refinancing = do I have to have any special paperwork to change the deed to just my name? Or will it be handled the same as any other purchase.

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Doris Snipp, Agent, Humble, TX
Wed Feb 20, 2008
Contact a Realtor who is leader in your area. They will valuable assistance to you. They can guide you through the process, give you stats on value and work with an escrow agent to not only handle the title but any homestead rights that might be involved. Even though she has moved out you need to know how you are currently holding title and what might happen to your property if she married or became deceased. I would get to work on this immediately while you are solving the buyout issue.
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Deborah Madey, Agent, Brick, NJ
Sat Feb 9, 2008
In a similar situation, I had some mortgage pros say it was a re-fi, and others say it would be treated as a purchase. Since the underwriting guidelines and rates may vary for a refi vs. purchase money, find out which option is more advantageous for you. BTW, in the similar situaiton that I referenced, the remainding deed holder refinanced.

You will want a complete title search to ensure clear title to you.

Both you and your friend need advice from accountants.
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Sandra Gunn, , West University Place, TX
Sat Feb 9, 2008
I somewhat agree with my peer but would again suggest that you seek legal counsel, a specialist in real estate law See my other answers for email addresses for a few but there are many in Houston. The title company can provide you with forms but they do not represent your interests. As far as tax implications, you should consult a CPA.
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Bruce Lynn, Agent, Coppell, TX
Fri Feb 8, 2008
You do need to take them off the deed and you can do that when you refinance. The title company will take care of this for you. Your friend will have some paperwork to sign and also this may qualify as taxable income for that person.
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Ray Essick, , New Hampshire
Fri Feb 8, 2008
Yes you should get a new deed. A title company should be able to help you. Buying out another person means they no longer own the property so it's important that you get them off the deed. There probably is more than one way to do the buy out. I think you will actually be selling the property as well as buying it in this type of transaction. So you and your friend will sell the property to you. That's the cleanest way to look at it. A title company it the best place to start asking questions too. You probably will not be refinancing and instead you get a new purchase mortgage. You are buying the property from yourself and your friend. It is possible to buy a fractional interest in a property and this could be done too if you have the cash you could just buy out your friend. Then everything could just stay put and your mortage company would just take your friend off the mortgage and you would create a new title that way too. If you need to pay off the mortgage to get your friend's interest out and pay her it would get more complex so that why I say you and your friend just sell it to you and you buy it with a new purchase mortgage. You may have to pay some kind of tax when you buy and sell this way too I don't know how it works in TX. So ask your title company about all the costs for the diffrent options and of course you probably will have closing costs with your mortage. Your current mortgage company might cut you a good deal if you stay with them so I would talk to them as well they probably would hate to lose a good customer. If you can buy out your friend with cash it could save a lot of costs too but it just might not be an option for you. You might also talk to your tax advisor about capital gains tax on this property if you and your friend have not lived in the property 3 out of the last five years or owned it less than three years. You also might talk with your mortgage company and do a cash out refi and then payoff your friend.
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