If several years ago my husband and I loaned money to our son to purchase a small house but now he needs to transfer it to us, how do we go about that without incurring large fees?
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If several years ago my husband and I loaned money to our son to purchase a small house but now he needs to transfer it to us, how do we go about that without incurring large fees?
There were no legal papers drawn up at the time. He is unable to maintain the house and we would like to have the house transferred to us. He is in agreement with that plan.
Asked on November 4, 2015 under Real Estate Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
He can either gift the house to you or sell it to you, at or below market value. Either can be done for little more a few hundred dollars on recording fees (though you should also have a real estate attorney help you, which will cost a few hundred more, to make sure everything is done right).
The real issue though is taxes: different ways of transferring the home will have different tax consequences for both you and him, and the tax consequcnes can be considerably larger than the fees. Speak to a CPA about the tax impact of gifting it, selling it at market, and selling it below market, to see what makes the most sense for you; then have an attorney draw up the papers and help record them.
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