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Old 06-15-2008, 07:50 PM
 
Location: Not on the same page as most
2,505 posts, read 5,886,473 times
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Hi everyone,

Would love your opinions and ideas on our situation. We have four acres, and have decided to do a lot line subdivision to sell the back part of our flag lot (which is land locked expect for down our driveway) to our neighbors who have street frontage, in essence enlarging their back yard. We will keep a little over an acre to sell with the house.

Here's my question. Our neighbors, the buyers of the land want to keep costs down by giving us half the purchase price of the land upfront, and then half at the closing when we sell the house, so that they can share the title costs with the house purchasing buyers.

Is this a good idea? It seems to me that it should be two separate transactions. I'm paranoid that at the closing for the house, the land buyers will decide to back out, and we will owe them money, and then the land will be useless, as it will have absolutely no access. Sorry if this is not real clear, as it is a little complicated.
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Old 06-15-2008, 07:58 PM
 
Location: rain city
2,958 posts, read 12,071,020 times
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Sounds wonky. I wouldn't do it.

I would have the land properly and legally surveyed and subdivided and sell them separately.

What are the chances that the purchasers of your house and 1 acre want to share any kind of transaction or costs with the other neighbors? None. I know I wouldn't want to get involved with a deal like that.
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Old 06-15-2008, 08:15 PM
 
Location: Central Texas
20,837 posts, read 41,282,223 times
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I agree that it does not sound like a good idea. Keep the two transactions separate and clean.
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Old 06-16-2008, 04:32 AM
 
Location: Not on the same page as most
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Thanks Azoria and Texas Horse Lady. The reason the neighbors wanted to do this is that they are in the abstract business, and know a title searcher who will do the search for free for them, but it would be kind of a repetitive title search for the house buyers, so they figured they could kill two birds with one stone. I agree it should be separate. Hope they don't get insulted.
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Old 06-16-2008, 04:39 AM
 
Location: Chaos Central
1,122 posts, read 3,881,205 times
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Your neighbors are assuming that the people buying your house would agree to this. As a prospective buyer, I wouldn't care to be part of this scenario - it's the land buyers' responsibility to do their own work on their own, and not try to drag other people into their problems. Just my opinion though!
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Old 06-16-2008, 12:02 PM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,958 posts, read 20,844,762 times
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They can't possibly be saving that much money on a simple title search to make it worth your while. There is probably a title insurance premium on the original lot split. Most title insurance companies will issue a "binder" policy to cover short term title issues and apply the premium to the second policy.
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Old 06-16-2008, 03:47 PM
 
Location: Not on the same page as most
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Quote:
Originally Posted by DMenscha View Post
They can't possibly be saving that much money on a simple title search to make it worth your while. There is probably a title insurance premium on the original lot split. Most title insurance companies will issue a "binder" policy to cover short term title issues and apply the premium to the second policy.

Sorry, I don't understand, could you simplify this for me? What is a binder policy? The land is not split yet, but we had a recent survey done, so at least that might help. They will only have to draw a lot line across it, and add it to their land, and of course change both deeds, and get approval from the town.

Thanks for your help...I've never understood real estate business terms very well. I'm guessing that you are also recommending keeping the transactions separate? Or are you saying that the second title search might be able to somehow piggy-back on the first binder policy?
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Old 06-16-2008, 03:49 PM
 
Location: Not on the same page as most
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Quote:
Originally Posted by Boomerang View Post
Your neighbors are assuming that the people buying your house would agree to this. As a prospective buyer, I wouldn't care to be part of this scenario - it's the land buyers' responsibility to do their own work on their own, and not try to drag other people into their problems. Just my opinion though!
It sounds like that to me, too. We should keep it simple and separate. Thanks for your opinion.
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Old 06-16-2008, 03:59 PM
 
28,461 posts, read 78,656,849 times
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DMenscha is talking about doing the sales separately. The way that title insurance companies work the policy on one sale is "coverage" for the life of the sale. If you are pretty sure that there is going to be a sale of related property within two years you can get coverage for ALL sales within two years for a 10% upcharge. They call this a "binder". It is really something for the BUYER to consider...
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Old 06-16-2008, 04:13 PM
 
1,949 posts, read 5,641,868 times
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Out of curiousity, do you have a buyer for your house yet? I was wondering if your house is going to be any less appealing when it's on less acreage. How much of a front yard is the new buyer going to have and are they going to be looking out of their house directly into the neighbors backyard?
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