Advice for selling to co-owner vs open market

mkin80

Hi There,

Im looking for a bit of impartial advice. Ive searched the main site and tried to find similar threads on the forum but nothing gives me the info I need.

I bought with a friend approx 4 years ago. He moved out and I have had a lodger for the past 3.5 years. He has no involvement in the flat other than paying 50% of ground rent. He has not contributed to mortgage repayments and not helped with maintainence.

Our fixed rate mortgage is up end March and rather than tie into another deal Id rather just get out.

We agreed to sell to the open market, 3 estate agents gave an average of 200,000 for the flat 3 weeks ago. (we bought for just under 170,000).

He now thinks its a good idea to buy me out, and is offering WAY below the asking price. Around 180k.

Id like a bit more information about how it works when a co-owner buys out, ie. proceedures etc. And also if anyone has advice on whether Im best just to take the offer or hold out for 190k which is what I think I can get for the place.

Thanks for your time.

MK.

Kavanne

What are similar houses on your street/in the area on offer for? and what have they actually sold for? https://www.mouseprice.co.uk or https://www.zoopla.co.uk can help

silvercar

I bought with a friend approx 4 years ago. He moved out and I have had a lodger for the past 3.5 years. He has no involvement in the flat other than paying 50% of ground rent. He has not contributed to mortgage repayments and not helped with maintainence.

Presumeably you agreed to this. Any way a court would most likely decide that you are renting his half of the property from him and would expect you to pay him half the going rate of rental and then him to pay half the mortgage, so it could be as broad as its long.

If you sell on the open market, you both share the legal costs, costs of HIP and estate agent fees. Deduct these from a realistic sale price and see if you can reach a compromise.

mkin80

kavanne - house prices are similar if not higher than mine, any that have sold recently are not yet showing on the records so hard to compare.

silvercar - thats where I was planning on pitching it. Im not so bothered about the lack of his fanancial imput, it was more to say thats why I want out. Obviously if the situation was different Id hang on till the housing market gets slightly better. If I can get a good deal Id rather cut my losses and run.

Thanks for your promt replies. Any other info on how to go about buying out would be appreciated. Are solicitors needed? And would that be joint responsibiliy or not?

Thanks,

MK.

Debt_Free_Chick

Yes, you would need a solicitor to do the conveyancing (the transfer of ownership from you jointly, to him alone).

You need to look at what you would get (or hope to get) from an open market sale and then deduct all the costs - Agent's fee, HIP, solicitor's fees etc etc. Then deduct the mortgage and split the remainder 50/50. Compare this with the costs of a private sale, where you wouldn't have to pay for an Agent or a HIP .....

Ideally, you want to be in much the same position, so you could accept a lower price as you would save on some fees. In any event, you can't be sure that you could actually sell on the open market at the Agents' valuation. Most buyers expect to get a property for less than the asking price, these days.

If you really want out, then perhaps consider a compromise - what would you want, as a cash sum, to get out of the property?