How do I sell a third share in a property?

mbw2000

Hi,

I own a property with my two siblings. We all own equal 3rd shares. We haven't had it valued yet but for example I'll say it's worth £150'000.

The issue is there is £50k roughly left on the mortgage. So far its been said that we would divide the value of the property (£150K) by 3 and THEN I would pay (leave the equivalent) my third share of the mortgage roughly £16500. This would leave me £33500.

Is that the right way to do it. I've thought about it and because I'm paying off my share of the mortgage now, surely we divide up my share of the property after that. For example £150K the house is worth now minus the share of the mortgage I've left for the to pay it with £16500 THEN divided by 3. Which would leave me a £44500 share.

I'm not looking to get more than my siblings or undercut them. I'm just confused about the best west to go about this. We're still in the early stages of the whole process.

Radiantsoul

It is all down to negotiation, but it seems to me the house is worth £150k and there is £50k mortgage. There might also be costs of say £5k in selling.

Therefore the equity is £150k-£50k-£5k or £95k. And your interest is £31.67k

G_M

Radiantsoul wrote: »

It is all down to negotiation, but it seems to me the house is worth £150k and there is £50k mortgage. There might also be costs of say £5k in selling.

Therefore the equity is £150k-£50k-£5k or £95k. And your interest is £31.67k

I agree. The mortgage will have to be paid off as part of the sale, so

Sale price less mortgage less sale costs = value.
Divide value by 3 and distribute

MobileSaver

mbw2000 wrote: »

For example £150K the house is worth now minus the share of the mortgage I've left for the to pay it with £16500 THEN divided by 3. Which would leave me a £44500 share.

No, your way wouldn't be fair as you're basing it on 100% of the house but only 33% of the mortgage. You need to base it on either 33% of both the mortgage/house or 1/3 of 100% of both the mortgage/house - either way gives you the same result of course.

So your equity is approx £32k after costs.

mbw2000

Hi,

Thanks for the replies. I just found it a bit overwhelming and wasn't sure how to do it properly. I guess I got confused because if they sell the property shortly down the line, they would get everything they paid into the mortgage back including the £16500 I paid towards it.

Thanks for clearing that up!

CLAPTON

mbw2000 wrote: »

Hi,

Thanks for the replies. I just found it a bit overwhelming and wasn't sure how to do it properly. I guess I got confused because if they sell the property shortly down the line, they would get everything they paid into the mortgage back including the £16500 I paid towards it.

Thanks for clearing that up!

if they give you 33k and take responsibility for the mortgage then when they sell it would work out like this

sale 150,000
less mortgage 50,000
= 100,000
less the 33k they gave to you
=67k

so half each = 33k i.e. exactly what you got
so each of you made a profit of 33k

is that what you have in mind or what?

mbw2000

Yeah that's what i had in mind. I haven't really thought about it much. I was getting confused about the mortgage, etc. It's really early stages yet, I'm not even sure how much exactly is left on the mortgage and is tricky evaluating the house too because we live in a really nice area and people can pay massively over the odds for properties here.

Thanks again for your comments, you have really cleared it up for me. I was definitely overthinking into it!