Sometimes clients looking to cut costs on their next real estate closing have asked about the possibility of a "cash for deed." What does that mean, what are the risks, and how can this strategy save you money on your upcoming closing? We will try to answer these questions for you.
Here’s a question we were recently asked: “My brother — who is incarcerated — and I co-own 133 acres of land in Tennessee. I want to sell but he doesn’t. There’s no way to fairly divide the property because of the dimensions of the land, much of which is in a flood plain. What can I do? And how are the legal fees paid?”
Knowing what's expected of you at the time of closing on a property will protect you from financial surprises. Each state is allowed to determine its own taxes. Kentucky, for example, has an income tax while Tennessee does not. In the State of Tennessee, a transfer tax is collected anytime anything of value is exchanged for the transfer of real estate. It's a hefty tax that can add thousands to the final cost.
Are you having problems getting along with the co-owner of your property? Do you disagree about how the property should be used? Do you want to sell, but your partner wants to stay? If you can’t see eye to eye with your co-tenant, maybe a partition action is right for you. To begin, let’s look at two example scenarios where a partition action might be filed.