Selling Property Need Advice

Schizted05January 23, 2012

My wife and I own 15 acres and we are wanting to sell 3 acres to a family friend is this possible if we have a mortgage on the land?

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ottawavalleygardener

Where do you live?

Where I am, a severance is needed, and the property must be zoned in such a way that a severance is permitted. Numerous conditions must be met first. Then a survey is needed. (Maybe this isn't necessary where you live??)

Is there a house on the 15 acres that is mortgaged?

You'll need to consult your local town and the bank that holds the mortgages; not sure how reliable the internet is for answering this.

    Bookmark   January 23, 2012 at 7:05PM
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Schizted05

We live in North Carolina, and there's a buisness at the front of the property, but the land goes way up a mountain where its just trees, the property next to use has a house way up top to.

    Bookmark   January 24, 2012 at 12:32AM
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mydreamhome

We are in NC too. From what we were told, you will have to survey off that acreage and petition to the lender who holds the note on your property to have that acreage released and permission to be sold. You will have to have at least 15% equity (depending on your lender's policy) in the remaining acreage. Odds are you will have to turn over most if not all the proceeds from the sale to your lender.

If you go ahead and redo the loan altogether (before the sale) carving out the smaller parcel and taking the loan out on just the larger parcel you are keeping, then you should be able to retain all proceeds from the sale.

Both scenarios will depend heavily on the appraisal of the remaining property. Where are you in NC?

    Bookmark   January 24, 2012 at 12:41AM
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Schizted05

Swannanoa 12 miles from asheville

    Bookmark   January 24, 2012 at 1:17AM
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weedyacres

We own 2 lots comprising 7 acres, both tied to our mortgage. We have over 50% equity in the combined property. I contacted our lender last year about the mechanism for selling off the extra lot, they looked up our financial info, and said they'd issue a lien release, no problem.

They basically want to make sure they maintain a LTV of no more than 80%. So if we had less equity they'd make the lien release contingent on our using (a portion of) the proceeds of the land sale to pay down on the mortgage.

    Bookmark   January 24, 2012 at 8:20AM
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ncrealestateguy

Exactly what mydreamhome says. You need to speak with your note holder before you do or know anything else. It is possible, but the #s need to make sense for the lender.

    Bookmark   May 25, 2012 at 8:26AM
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brickeyee

"I think it will not going to happen, until you complete your mortgage you can not sell your property to anyone."

Say WHAT?

Many many properties are sold with mortgages present.

Some of the purchase price is used of pay off the mortgage.

The present note holder will have to agree to the division since it will decrease the value of the property backing the note.

They may be willing if there is still enough value, or you could refinance the note and put some of the money for the lot down.

    Bookmark   May 26, 2012 at 12:46PM
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