Profile picture for mktmmc

Would now be a good time to split our property? or should we wait until the economy gets better>

Our house sits on a lot that we would be able to split.  That lot is our only retirement savings we have right now.  Should we wait til we're ready to sell or split the property now?
  • September 20 2010 - Rochester Hills
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Answers (5)

Profile picture for sunnyview
If it were me, I would talk to your local town about the costs for splitting and any change in property taxes after you make the the split. Some places allow owners to "partition" a lot which keeps the taxes the same as the normal property taxes on the house with, but grants preliminary approval for the split, "freezes" the fees for the formal split and allows the owner to speed up the splitting process when they finally decide to apply for it.

Two things seem to happen when the real estate market gets hot. Fees for splitting and the time it takes to get a split done both go up. I would consider splitting at some point before you need to sell so that when the market comes back around you are ready to market your lot as long it doesn't significantly increase your tax bill.
  • September 20 2010
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Profile picture for therealtorguy
Just because you split the property now, doesn't mean you have to sell it now. You may want to talk with your local government and get a feel for how long it will take to complete the process. The split may affect your property taxes ... one tax bill for your residence and one tax bill for the vacant lot. This might have a positive impact or negative impact on your overall tax bill.

It doesn't sound like you have to sell the lot(s) now. So you can list the vacant lot(s) at a higher price to see if there is an interested buyer. Someone just might make an offer you can't refuse.

Do a little homework, see what the split will cost and see what vacant lots are selling for. Also check to see how many vacant lots have sold in your area ... the demand may be great (higher price) or low.

Good luck!
  • September 20 2010
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Your best bet is to sit down with a local agent who can get you very recent vacant land comparable sales info from the immediate area and make your decision accordingly. However, considering that the market has bottomed-out (or is close to the bottom ???) and that new construction has slowed to a crawl, you may want to wait it out if you can. But, that doesn't mean that your unique property/situation doesn't warrant more consideration, either. I hope that helps--there are just no easy answers these days!
  • September 20 2010
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Profile picture for broker_GRI
Mktmmc,

A local agent should be able to help advise on the matter.
Now I say should because not all agents are as informed about their markets as they should be. That being said, interview several.
You should probably also speak with estate  attorney.


It will likely cost you quite a bit to split the lot so perhaps a little research in advance to decide if you even want to put up the money at this time.

Much Luck to you,
Tanya
  • September 20 2010
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Best way to answer this is if I were in your shoes, what would I do. I would wait.  We're in a buyer's market and if you can afford to hold onto the property, the value should increase in the years to come. Right now you'd likely have to sell it at a relatively low value.
  • September 20 2010
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