What should I offer to buy housemate out??

FirstTimeSaz

Hi!

i have posted before on advice over whether I should buy my boyfriends housemate out and I have decide that I am going to.

I would like people’s opinions on what they feel would be an acceptable offer.
Here’s the stats on the house:
Purchase price: 117,500
Current outstanding mortgage: 113,000 approx
House Value: around 130,000, I’d say between 127,500 and 135,000 on a good estimate.
My boyfriend and his housemate own it 50:50


I know that house prices are falling rapidly, our’s has already fallen 7% from its estimated worth a year ago.

I was just wondering what people thought I should offer to pay.
Would it be worth getting three valuations, averaging it and me offering half the equity?
But if I don’t buy him out we’d have to put it in the market and in this current climate it would undoubtably not go for the asking price so should I offer him a bit less?
Should I take in to account fees etc we’d have to pay if we were to sell it?

Thanks for any advice

Willsnarf1983

realistically you'd have to bid under the value of the house but on the other hand you want the guy out so ur gonna have to not put him in negative equity and make it enticing enough for him to move.


i'd prob offer 1/2 of £123k which leaves him 5k up but does he actually want to sell?

Will

FirstTimeSaz

Hi Will

Thanks for your reply, that was along the lines of what I was thinking.

I know he cannot afford to buy my OH out so it would either be me buying him out or selling the house, but my OH and I feel it would be stupid to sell in this market.

He is not very good with money so i feel he'd jump at 5K but i didnt know if that would be considered a reasonable offer.

The only thing is, he and his gf had an estate agent round on friday without informing us! So i think he's going to turn around and say the house is worth ..... so i want half of the equity which i dont think is viable or reasonable with his past record.

Willsnarf1983

u never know it may work in your favour, if he's doing some work let him come to you with the first price, it may have dropped remarkably

Also point out that your offer means that its less hassle and also that if he says no and goes onto sell then the buyers are likely to offer 10% less than the valuation in the current market...tbh 5k is prob a bit generous but for ease and no hassle thats what i'd be looking at

Will

Mutton_Geoff

If you are guessing £130k then realistically it would get an acceptable £125k offer when sold. Add half of his £3k agents fees plus £1k legal fees, so another £2k of costs if he was to sell on the open market, so £60k would be a more than reasonable cash offer in the current market.

Is there a mortgage redemption penalty in place? That would be another cost to consider as the lender may look to a remortgage to allow a change of names on the deeds.

Captain_Mainwaring_2

You would have appeared to have paid a deposit of £4000 ish, it's worth nothing until told, but could be a substantial liability. I wouldn't offer him anymore than £1000, bearing in mind what it could cost you to seel it/remortgage it. Other than than, ask him what he will pay you, if he is potless, then your offer should not exceed what he can pay, he should be be lucky to get out of it intact.

FirstTimeSaz

Hi Geoff

Thanks for your advice, i think that seems a reasonable offer too.
Unforetunately he's not too clued up on mortgages or money or interest rates, i like to think i've got descent understanding, a lot thanks to MSE.

There will be no redemption fee to pay as the fixed rate term ran out yesterday and the mortgage is now on the SVR.
That is another reason why my OH wants the house to be just me and him; he organised 2 meetings with different mortgages brokers to organise a remortgage and the housemate wouldn't even take 30mins off work to see them.
i think he just assumed that when the fixed rate was up we could just switch to another rate the same.

The only costs will be YBS charging £150 to take his name off the mortgage and put mine on and a charge to the solicitor to change the deeds

FirstTimeSaz

Hmmm, not sure how to take your reply.
But the mortgage was originally 100% so no deposit involved.
If we were to take on the mortgage, my OH and I will be wanting to stay there long term, start a family etc so will hopefully be able to ride out the downturn in the market while we try build up equity in the home

Mutton_Geoff

The only costs will be YBS charging £150 to take his name off the mortgage and put mine on and a charge to the solicitor to change the deeds

If he wants out then his costs will be entirely different. Maybe you should call his bluff and say your bf is selling up to buy your own home together. These are the costs he needs to have in mind, so make sure your offer is based on this, not on actual costs you may incur doing him a favour if he wants out.

Somewhere in between is the ideal negotiating point.

Captain_Mainwaring_2

FirstTimeSaz wrote: »

Hi Geoff

Thanks for your advice, i think that seems a reasonable offer too.
Unforetunately he's not too clued up on mortgages or money or interest rates, i like to think i've got descent understanding, a lot thanks to MSE.

There will be no redemption fee to pay as the fixed rate term ran out yesterday and the mortgage is now on the SVR.
That is another reason why my OH wants the house to be just me and him; he organised 2 meetings with different mortgages brokers to organise a remortgage and the housemate wouldn't even take 30mins off work to see them.
i think he just assumed that when the fixed rate was up we could just switch to another rate the same.

The only costs will be YBS charging £150 to take his name off the mortgage and put mine on and a charge to the solicitor to change the deeds

Call his bluff, tell him you are going to let it go, and ask him what plan he has in place for a negative equity situation - that should see his old pooper fluctuate and increase his level of interest, tell him that you may possibly just consider allowing him to take his name off the deeds and the mortgage -

FirstTimeSaz

It's more of that we want to live on our own then him wanting out.
I think he seems to think we're all going to live together forever, but the house was a way of getting on the ladder for my OH and him. i was at uni so couldnt get a mortgage but now 3 years later i'm working and able to.

He's 35 and him and his OH are engaged so you'd think he'd be wating to get a place of his own and settling down.
More concerned with going to the pub

We've got some valuers coming on thurs so we'll see what they say but obviously he's going to try get as much out of me as possible even if it is unrealistic