Expert: Dick Dennis - 7/15/2006

Question
We would like to sell half the equity in our home to my parents. We then plan to use the home as a rental property.  We need the cash out of the house in order to close on a new home, but the house has been on the market for 10 months (in Florida) with no luck so far.  The market seems to have crashed underneath us.

How would we go about doing this?  We currently have a mortgage balance of $143K and an equity line for $25,500.  The house is on the market for $275K, lowered from the org asking price of $325K 10 months ago.  Thanks for your advice!!

Answer
Be aware, Mara, that if you do not watch and tend that property once you move out, you're letting yourself in for problems you never knew about. First, having a rental is like having a regular business and you must treat the property with same attitude as if you had a business in the shopping center. There's lots more.

Get two separate Realtors (not the one who has yours listed) and get their opinion of value. Take the average of those two prices and have your parents give you half the equity you will have with that valuation. But be aware that you and your husband will still be solely responsible for the mortgage payments if for some reason your parents have to back out.

I do wish you well.

Dick Dennis          dixiedee13@aol.com