Taking People off a Title?

[Peter Campagna]

I recently inherited a property from my grandparent, more accurately my two uncles inherited 2/3 and my siblings and I inherited the other 1/3. Nobody else wants to keep the property. My question: is it possible to refinance the house to pay out the other people then remove them from the title?

[Frank Chin]

We had situations like this in our family and it's a little more complicated than taking some people off the title.

The first issue is how much the property is worth, and you need to obtain an appraisal of the property.

Then, there is P&S contract where you purchase the property from the others. You didn't mention how many siblings you have, say it's one other, then it would be deeded from 4 people, your two uncles, you and your sibling to just you.

The P&S contract would have the value of what the transaction is, and you can then go to get your mortgage, like you would purchase any other property, except that in this case, the seller are your uncle, your sibling, and you.

For example, I had a tenant, his parents both died, he and two siblings inherited it, he wanted to take over the property, and move in. He lived in the same town, his siblings are out of state, don't want it. There was no existing mortgage. He had to buy the property, the part he doesn't own, from his siblings, and he had to do what I described above, in this case, got an appraisal, wrote up a P&S contract based on the appraisal, obtain a mortgage for 2/3 of the property value (need P&S contract for the mortgage), and use the proceeds to pay off his siblings who owned the other 2/3's. Thus, in this transaction, at the closing, the grantor and grantees of the deed is the three siblings (grantor) to my tenant only (grantee), in other words, taking his siblings off the deed.

Seems like the math in your case is a little more complicated, but you get the idea.

[Peter Campagna]

Thanks, Frank. And you're in NY, too. Which is great because the property is in Syracuse, so I would imagine this would be the case, or a similar case, for me. 

The house is all paid off, too. I have 4 siblings, but we have been talking this morning about all keeping our names on it and I would treat them as partners with only receiving cuts of the outcomes. More complicated, yes, but plausible.

Thanks again.

[Jack Edgar jr]

If your keeping it in whatever entity it’s in make sure to create an operating agreement that spells out yours and everyone else’s roles/responsibilities. Ie if u plan on renting it out and managing it. How does that all play out...

[Peter Campagna]

Thanks, Jack. Will definitely be on the forefront of my mind!

[Matt Devincenzo]

Yes, I'm sure there is more to it but the short version is you refi and at closing everything is completed. The other owners sign over their rights to you and they receive cash from the refinance. I included the link below, though I'm sure there are more specifics that a lender can fill in. 

https://www.fanniemae.com/content/guide/selling/b2/1.2/02.html

[Peter Campagna]

Originally posted by @Matt Devincenzo:

Yes, I'm sure there is more to it but the short version is you refi and at closing everything is completed. The other owners sign over their rights to you and they receive cash from the refinance. I included the link below, though I'm sure there are more specifics that a lender can fill in. 

https://www.fanniemae.com/content/guide/selling/b2/1.2/02.html

Fascinating find. Thank you!