Selling my half... agreeing how much...

screech20

Hey guys,

Some of you may already know from previous posts that I have a mortgage on a house with my mate, of which I have now decided to move on, so he will be buying me out in the next few weeks.

Its now come to talking money, finding out how much he will be giving me.

I'd like to throw some figures out to you, if see how you lot would work it out if thats ok?


Purchased house for £167.500


Deposit of £47.500 (Half each)

Borrowed £120.000


Amount left on mortgage £116.000


2 valuations last week both came back at £170.000



So using those figures only, not taking into account of any fees, how would YOU work it out?

I've got an idea of how i think, and he's said something different, which i have neither agreed or disagreed with. But would like to see your opinions before saying anything.



Any advice appreciated.


Cheers guys and girls.

martinsurrey

Assuming all bills/fees/mortgage split 50/50 I would be looking at

Your half of house = £170/2 = £85k
Your half of mortgage = (£116k)/2 = (£58K)

your equity = £27k

less a split of the fees.

what has each of you said?

HarryBarry

If it was me, I'd probably accept an amount based on 167.5K. Out of interest what was the valuation when you bought it ? I don't know if it is just my experience but I normally see valuations rounded up to a nice figure.

But the reason I'd accept an amount based on 167.5k is that you are selling 50% of a house and he doesnt have to buy. Isn't he just free to make an offer the same way you would for any property, he might decide to make a low offer as you want a quick and easy sale. If it went as far as selling the whole house, it would probably cost more in fees.

So by going with a bit below the valuation, you make it seem like he is getting the better deal and he is happy to go with it.

vegasbaby100

was it valued by a RICS surveyor or an estate agent?

G_M

vegasbaby100 wrote: »

was it valued by a RICS surveyor or an estate agent?

EAs frequently 'over-value' properties

a) to encourage the owner to use them rather than another agent and
b) the 'valuation' they give is what they suggest it is initially marketed at - not what it will be sold for.

What did you agree when you bought? You did consider this scenario and agree what to do......?

jackomdj

As above probably overvalued, a lot of houses expect a 10% drop from EA's valuation.

If you suggested basing your figures on original purchase price and you paying solicitors fees IMO you would be getting a good deal.

screech20

Thanks for the relies.

Its been valued by 2 estate agents, both coming out the same, we have agreed to go with this.

We agreed when this was all decided that we would base it on an average valuation. He's had 2 in, i was going to get a couple in, but i think i will leave it at the 170k

I understand what you are saying regarding all the selling fees that im not going to have, except the solicitors fees, but i don't want to take that into consideration on this occasion.

So how would you come to a figure to give me, even if you were to base it on the original purchase price, would still need to come up with a figure...

House 167.500 or 170.000

Mortgage 116.000

Deposit 47.500


CHeers

irishjohn

Fair way for both of you is to get your deposit back so I think he needs to get a mortgage that will allow him to pay you 23,250 less 50% of the fees to "sell" the house - as the current owners are effectively selling the house to the new owner (him) - in this scenario you are partly responsible for the selling fees.

With this outcome, both of you need to write off the mortgage payments made since buying the house and not expect any repayment from them.

Vincent.waldorf

martinsurrey wrote: »

Assuming all bills/fees/mortgage split 50/50 I would be looking at

Your half of house = £170/2 = £85k
Your half of mortgage = (£116k)/2 = (£58K)

your equity = £27k

less a split of the fees.

what has each of you said?

I agree with 27k
mkt price 170000 cost 167500 increase in value 2500 equity 23750 debt 5800081750 85,000 3,250 27,000

TrickyDicky101

If I was your friend (co-homeowner) I wouldn't give you credit for any amount of fees - he's not the one who wants to sell. You are, therefore i would say you should bear the full brunt of the associated fees.

StuC75

Consider what you would do if was on the open market.. i.e. both going separate ways.

You may want £170k, with then a straight 50/50 split of equity after paying all fees.. but the realistic chance that someone would pay that in the short term,, is the great unknown. Homes may be shifting quick in that area, or you may attract speculators trying to get a 'deal'..

In the absence of a clear exit strategy, anything deviating from that is as a concession of one party and consideration given for the convenience..

How many months would you be happy to pay the mortgage whilst it was on the market - this would be lost money that a 'clean break' would give back.

think of it the other way round - if it was being sold for a loss (negative equity) - would you be happier with a greater share of the loss? or would you want 50/50 split?