Buying ex partner out of mortgage -how to calculate offer

zaja

My partner and I recently split up. We were not married and we had a flat and mortgage together.

He already moved out, he doesn't want the flat and couldn't buy me out or have a mortgage on his own. So I'm considering buying him out. We are still paying the mortgage at 50% but the plan is for me to find a lodger as soon as possible to help out with the re-payments.

We had 3 evaluations made and they are all very similar. They all agree the asking price should be 2.25 times more than we bought it for.

We signed a contract before buying it. It stated the different amounts and percentages of the price we put down for the deposit (he put 13% and I put 19%) and also the agreement that we would each pay 50% of the repayments of the mortgage.

Speaking to people I get two ways of calculating how much I should be offering him.

1- paying him half the remaining mortgage and 2.25 times of his deposit. This option considers that I shouldn't be paying him for the time we've been living together as it was a shared cost.

2- Subtracting the mortgage from the price of the house. Calculating the 13% and 19% of the net sell and 50% of the resulting amount. Offer him the 13% of the net sell plus that 50%. So we consider the profit first based on the deposit and second on the 50% payments.

Which of these ways of calculating the offer seems fairer for both of us? Are there other common ways of considering a situation like this?
Also, in case we disagree, can he force us to sell the flat to the open market?

Thanks

Thrugelmir

Option 2.

Yes, your ex can force a sale through the courts. There's a legal document to support his claim. So the costs could be awarded against you.

If you need a lodger. Is a mortgage affordable in your sole name.

Kynthia

Before even seeing the options the method I'd use is option 2 over option 1. If you were selling the solicitor would pay the mortgage company what is outstanding, then usually their fee and estate agent fee before the dividing up the rest between you too according to any ownership percentages and agreements.

I'm assuming your deposit percentages were based on the total value of the property at the time? Then shouldn't the deposit percentages be based on the gross sale price rather than the net proceeds? Although tge wording of tge agreement is key here.

So I would use the value that 3 agents think you'll achieve, not the marketing price. Then deduct a little for typical selling costs and the redemption value of the mortgage. Finally deduct the 13% and 19% of the actual sale price from the equity available, and then split evenly what's left (adding tge 13%/19% amounts accordingly).

zaja

Thanks for your replies. They are really helpful.

Thrugelmir:
I know the mortgage is affordable because I've been paying it for over a year on my own before splitting up (he had economic difficulties but he's now recovering). The bank though doesn't believe so, so my parents offered lending me enough money to re-pay the part of the mortgage needed to make the bank happy. I wouldn't rely on the lodger to pay the mortgage, but to help me pay my parents back -and they are in no great rush. Having said that, I'm just exploring all possibilities.

One other question, just so I have all the facts. At one point my ex was saying he preferred selling to the open market because he thinks we might even get more for the flat. So his idea was that if I wanted to buy him out, I should pay an extra for him to sell the flat to me. So I just want to know how much leverage I have. If my offer is completely reasonable and he still wasn't happy and decided to go to court to force a sale (I really doubt it would get to this to be honest), could still the court obligate us to sell to the open market? Don't I have as much say to what we should do with the flat as he has?

Kynthia:
I need to check the agreement but I think this was the way we (he, in fact) wrote it. I don't fully understand why it should make a difference...

NewHomeOwner_2

zaja wrote: »

Thanks for your replies. They are really helpful.

Thrugelmir:
I know the mortgage is affordable because I've been paying it for over a year on my own before splitting up (he had economic difficulties but he's now recovering). The bank though doesn't believe so, so my parents offered lending me enough money to re-pay the part of the mortgage needed to make the bank happy. I wouldn't rely on the lodger to pay the mortgage, but to help me pay my parents back -and they are in no great rush. Having said that, I'm just exploring all possibilities.

One other question, just so I have all the facts. At one point my ex was saying he preferred selling to the open market because he thinks we might even get more for the flat. So his idea was that if I wanted to buy him out, I should pay an extra for him to sell the flat to me. So I just want to know how much leverage I have. If my offer is completely reasonable and he still wasn't happy and decided to go to court to force a sale (I really doubt it would get to this to be honest), could still the court obligate us to sell to the open market? Don't I have as much say to what we should do with the flat as he has?

Kynthia:
I need to check the agreement but I think this was the way we (he, in fact) wrote it. I don't fully understand why it should make a difference...

He think he'll get more than all the valuations?

If you sell it through an estate agent you'll have to pay estate agent fees (at least 1%) and the solicitor will more than likely cost more than if he sells his half to you.

Kynthia

zaja wrote: »

Thanks for your replies. They are really helpful.

Thrugelmir:
I know the mortgage is affordable because I've been paying it for over a year on my own before splitting up (he had economic difficulties but he's now recovering). The bank though doesn't believe so, so my parents offered lending me enough money to re-pay the part of the mortgage needed to make the bank happy. I wouldn't rely on the lodger to pay the mortgage, but to help me pay my parents back -and they are in no great rush. Having said that, I'm just exploring all possibilities.

One other question, just so I have all the facts. At one point my ex was saying he preferred selling to the open market because he thinks we might even get more for the flat. So his idea was that if I wanted to buy him out, I should pay an extra for him to sell the flat to me. So I just want to know how much leverage I have. If my offer is completely reasonable and he still wasn't happy and decided to go to court to force a sale (I really doubt it would get to this to be honest), could still the court obligate us to sell to the open market? Don't I have as much say to what we should do with the flat as he has?

Kynthia:
I need to check the agreement but I think this was the way we (he, in fact) wrote it. I don't fully understand why it should make a difference...

Judges usually don't like people tying up the court system when things could have sorted outside of court. So I would expect, but couldn't guarantee as judges are human and can vary, that a judge would look unfavourably on someone who refused very reasonable offers and suggestions and expected the other party to pay the court costs. I would expect that they wouldn't get their costs back and the order might be a time frame for you to enact your solution (the buy-out). The only issue could be his disagreement of the value, but usually EAs are more known to over than under value property.

The alternative is to pay for a surveyor to do an official valuation as they are qualified to do this and provide a report to justify the value. A judge would find it hard to agree with either party challenging a surveyor's value. I suggest writing to your ex asking if he would accept a surveyors valuation, with their fee deducted from the sale price, of he doesn't then there's little point paying for one.