Q: I am selling my home of 15 years in California. I purchased it from the bank (which had foreclosed on the previous owner) for $107,000.

The house has 4 bedrooms and 2 1/2 baths on a half-acre lot. In the last three years, I have remodeled and renovated the property. I replaced the roof, carpet, and windows and put wood floors throughout. I also added a 225 square foot all-season room with an extra half bath. The house recently was appraised for $395,000.

I’ve decided to sell my house to my sister for $350,000. While she can’t afford to pay what the house is probably worth on the open market, she does need a home for her grandchildren, whom she is raising.

I’m wondering if I can keep a portion of the land, which would be on a downhill slope. I could potentially build a home there and live nearby. Can this be done? Should I address this in the contract?

We waived the right to have a real estate agent as part of this deal. But, I haven’t signed my portion of the contract yet.

A: If you want to subdivide the land, you must talk to the local zoning department of your municipality and see if it is possible. If there is a minimum quarter acre required to build a home, and your lot is positioned in a way that will permit this, and still give you access to the road, then you may be able to do it.

And yes, you should definitely do this as part of the contract. Right now, you are selling her the house and the entire half-acre lot on which it sits.

You should work with a real estate attorney who can help you do this, however. I wouldn’t recommend subdivision of lots as a do-it-yourself exercise.

Published: Sep 10, 2004