How to Subdivide a Lot & Refinance

Check with an attorney and research local guidelines before attempting to subdivide your property.

There are many different ways to invest your money. Some people stick with plans that keep their money readily available, while others choose long-term investments that keep their money tied up for years. Real estate is a popular long-term investment. The home where you live may have enough land for you to be able to subdivide the property, refinance your mortgage and sell a parcel to free up some extra cash. This process is strictly governed, so check with your bank, an attorney and your county clerk's office before trying to subdivide your property.

Instructions

1. Visit your county clerk's office. Pay any required fees and obtain a survey of the existing parcel of land.

2. Get a copy of the local real estate ordinances from the clerk's office. Study the statutes that pertain to subdividing existing parcels.

3. Draw your plan on paper following the rules set forth in the local ordinances. Hire a licensed surveyor to survey both sections of the property as two separate parcels.

4. Sign contracts with electrical, plumbing and gas contractors. Hire each of them to extend utility services from the original parcel onto the new parcel. Pay for the installation of new meters for each utility on the new piece of property.

5. Apply for new deeds from your county real estate clerk's office. Pay the fees, fill out the paperwork and show proof that the new parcel conforms to the local laws. Obtain deeds for each piece of property to make the subdivision legal.

6. Write a proposal to your mortgage lender asking for the property to be refinanced as two parcels. Show the legal documentation along with the paperwork from the utility services. Request that the refinance allow for the new piece of property to be sold by you at your convenience.

Tips & Warnings

• An attorney should be involved in this process to help you ensure the legality of the subdivision process.

• Because of the terms of your mortgage, you may be required to approach the bank before beginning the process. Write out a detailed plan that follows the local ordinances so the bank will know exactly what you plan to do with the piece of property it now owns.

References

• City of Atlanta, Georgia; Application for Land Subdivision
• Select Mortgage Group; Closing Costs; James Snider and Sheryl Eaton; 2010