Posted byMessage
GEAUX DJ!
LSU Fan
Addis
Member since Jan 2005
1768 posts

Buying a lot by owner and not financing, help


So the guy im buying this lot from doesn't know what to do. I have cash or check whichever if better to pay for the property. Do I need to contact a lawyer and set something up? Also, he had a buddy telling him that he would have to pay capitol gain taxes on the sale of the property if its said to be sold for X amount so he wants to say it was sold to me for a lower amount to avoid paying those taxes. I never heard of capitol gains on property, but what do I know. Any help would be appreciated.






Back to top
Share:
Nawlens Gator
Florida Fan
louisiana
Member since Sep 2005
2314 posts

re: Buying a lot by owner and not financing, help



You need to get a title search and a deed. I would recommend an attorney for sure. The true purchase price you agree on doesn't have to be stated, you just have to list some dollar amount, but it could affect your capital gains when you sell. I've seen deeds that listed a few dollars while the actual was thousands.







Back to top
GEAUX DJ!
LSU Fan
Addis
Member since Jan 2005
1768 posts

re: Buying a lot by owner and not financing, help


I myself dont plan on selling once I buy. I just want to make sure its done right so we both could benefit. I also wanna get it appraised and I dont wanna list something that will hurt my apprasial because I wanna have some money in it when I go to build for sure.





Back to top
Geaux Smoke
LSU Fan
Aspen, California
Member since Aug 2010
1977 posts

re: Buying a lot by owner and not financing, help


whatever you decide to do... pay the money and have it surveryed before purchase





Back to top
guttata
LSU Fan
prairieville
Member since Feb 2006
19847 posts

re: Buying a lot by owner and not financing, help


If you go ahead and buy it from him at a higher price than he wants it to look like, it could possibly help you out as far as property taxes are concerned.





Back to top
Tigris
Colorado Fan
In a van by the river.
Member since Jul 2005
5503 posts

re: Buying a lot by owner and not financing, help


quote:

pay the money and have it surveryed before purchase


What if it's been surveyed twice in the last 4 years and filed with the county (including the wetlands delineation). Seems pretty exact. We're closing on a lot in 2 weeks under these conditions. Hadn't planned to buy this but it's a from a bank foreclosure in Florida and absurdly cheap for a great piece of property.






Back to top
Blackbeard
LSU Fan
Amite River
Member since Jun 2012
150 posts

re: Buying a lot by owner and not financing, help


Contact a real estate title company in your area...they will have the abstract done( to protect you from liens attached to the property) and will provide the necessary paperwork to transfer the property.





Back to top
ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
5872 posts

re: Buying a lot by owner and not financing, help


quote:

Contact a real estate title company in your area...they will have the abstract done( to protect you from liens attached to the property) and will provide the necessary paperwork to transfer the property.


I would be shocked if an empty plat has more than one mortgage, which being in foreclosure, would satisfy said lien.

Only thing i can see is a mechanics lien on would be that survey, find out who provided survey and contact them before closing.







Back to top
TogaParty
Member since Feb 2013
276 posts

re: Buying a lot by owner and not financing, help


Always lawyer up in situations like this.







Back to top
NEWBIE
LSU Fan
Member since Jun 2008
103 posts

re: Buying a lot by owner and not financing, help


I would be shocked as well if there is more than one mortgage on a lot; but I would be more shocked finding out later that there was another encumberance affecting the property and my ownership interest was reduced or nonexistent.

Always have a title search done before buying any immovable property even if there is a foreclosure or sheriff sale.



This post was edited on 4/21 at 10:25 am


Back to top
GEAUX DJ!
LSU Fan
Addis
Member since Jan 2005
1768 posts

re: Buying a lot by owner and not financing, help


So back to my original post, the guy now tells me the land was donated to him and hes scared that he will have to pay taxes in the end, like a lot of taxes on the property. Does anyone know how this works on his end and if he will have to cough up to pay?





Back to top
Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14379 posts

re: Buying a lot by owner and not financing, help


If the seller acquired the property as a gift, then the seller's basis in the property is whatever the donor's basis was at the time of the gift. The seller should ask the donor how much the donor had invested in the property. He might not have any tax issues to worry about.





Back to top
NEWBIE
LSU Fan
Member since Jun 2008
103 posts

re: Buying a lot by owner and not financing, help


Was the seller holding this property as an investment? does he plan on replacing the property with another investment property? If so, he may be able to defer any capital gains in the property by doing a 1031 exchange.

Sounds like you are doing all the work for him to sell his property. You may advise him to talk to a cpa or real estate attorney to determine, as poodle said, what is basis is and what taxes he may incur.






Back to top
GEAUX DJ!
LSU Fan
Addis
Member since Jan 2005
1768 posts

re: Buying a lot by owner and not financing, help


I know it was family land and on the accessors page his dad bought the lot for 30k then donated it to him. So 30K would be the basis.

And no it wasn't an investement property it was gonna be used for his home, hes decided to build elsewhere.



This post was edited on 4/21 at 12:21 pm


Back to top
GEAUX DJ!
LSU Fan
Addis
Member since Jan 2005
1768 posts

re: Buying a lot by owner and not financing, help


Yeah I feel like I am doing work for him too but its a great deal and I want to make sure it goes through, he just has no idea what he is doing and I wanna help out where I can.





Back to top
NEWBIE
LSU Fan
Member since Jun 2008
103 posts

re: Buying a lot by owner and not financing, help


Well, I'd choose a title company to close at and have him talk to the attorney about what the best options are for him.

That way he will be aware of any pitfalls that the attorney has seen in the past and you would be off the hook for any possible negative outcome if he took your advice.

Good luck.






Back to top
GEAUX DJ!
LSU Fan
Addis
Member since Jan 2005
1768 posts

re: Buying a lot by owner and not financing, help


Yeah thats what we are going to do. Being its the weekend I was just poking around to see if I could find out anything. Tomorrow I'll make calls on my end to get my stuff straight and I'll get him to do the same. Seems like laws on selling property have changed a lot over the last few years.





Back to top
VABuckeye
Ohio State Fan
Oak Hill, VA
Member since Dec 2007
9895 posts

re: Buying a lot by owner and not financing, help


1). If it hasnt been appraised then you have no idea of the value and whether or not its a good deal.

2). Misrepresenting the purchase price is fraud. Are you willing to risk fraud because some dumbass wants to avoid paying taxes on something he got for free?






Back to top
Blackbeard
LSU Fan
Amite River
Member since Jun 2012
150 posts

re: Buying a lot by owner and not financing, help


In Louisiana, any personal liens attach to property owned by that person...which means if the seller or whomever donated the property to him have judgments against them in the parish mortgage records...then they now attach to the property. Contact a title attorney...they handle this everyday.


This post was edited on 4/22 at 11:53 am


Back to top
GoIrish02
Notre Dame Fan
Metairie
Member since Mar 2012
96 posts

re: Buying a lot by owner and not financing, help


quote:

whomever donated the property to him have judgments


In your scenario, why would the original donor's lien(s) affect the current seller? Wouldn't any/all of the donor's lien(s) be addressed at the prior closing where the donor donated/transferred the land to the current seller? Just curious, thanks.






Back to top



Back to top