Buying A House With A Mate

SunderlandBlackCat

Hi

A colleague at work has offered to sell his house for around £15k below market price for a quick sale.

2 of us are interested but neither can afford it on our own as we already have mortgages.

We're thinking about going 50/50 on it but we have to move quickly as the seller is going to approach one of theose "Guarantee to buy your house in a week" companies but neither of us have looked at this before.

We're looking at clearing the place out, redecorating & then putting it back on the market as quickly as possible rather than as a long term investment.

Can anyone offer any advice or point us to some online information resources for joint purchasers?

Thanks in advance.

BenL

http://www.ourproperty.co.uk/guides/buying_with_a_friend_or_family_member.html

http://money.guardian.co.uk/homebuying/firsttimebuyers/story/0,,635691,00.html

http://www.virginmedia.com/homefamily/property/buying-with-friends.php

a few articles picked up from a google.

Ben

Austin_Allegro

It depends on the state of the market and the motivation of the seller.

Why is the colleague selling it? Is it his first home or a BTL?

If the colleague is selling his first house cheaply and quickly because he really needs the money right away for a life saving operation or something, then conceivably you might make a profit if you tart the place up.

Alternatively it's possible that it's a BTL and he's sussed that the property market is going downhill and wants to get shot of it by passing it on to the 'greater fool(s)' before it drops in value even further.

Given the uncertainty in the markets and the downward slide of property prices in some areas, I'd say the second option is more likely. Add to that the work involved in tarting it up and the legal complications of joint purchasing, and I'd say it sounds more trouble than it's worth.

As Clint Eastwood said, it all depends on how lucky you feel...

SunderlandBlackCat

Austin_Allegro wrote: »

It depends on the state of the market and the motivation of the seller.

Why is the colleague selling it? Is it his first home or a BTL?

If the colleague is selling his first house cheaply and quickly because he really needs the money right away for a life saving operation or something, then conceivably you might make a profit if you tart the place up.

Alternatively it's possible that it's a BTL and he's sussed that the property market is going downhill and wants to get shot of it by passing it on to the 'greater fool(s)' before it drops in value even further.

Given the uncertainty in the markets and the downward slide of property prices in some areas, I'd say the second option is more likely. Add to that the work involved in tarting it up and the legal complications of joint purchasing, and I'd say it sounds more trouble than it's worth.

As Clint Eastwood said, it all depends on how lucky you feel...

He bought it in 2004 & has lived there ever since. All he'll say on why he's selling is that he's moving back in with his parents.

I know he had a lodger for quite a while but the lodger left a while back & he hasn't found another one.

pamaris

If the guy is thinking of approaching a quick/ guaranteed sale company, had a lodger that didn't work out, plus is moving in with his parents, it sounds like he is a distressed seller.

However, I think that by and large, profit has been squeezed out of the housing market and there is none left. Don't set yourself up as the "greatest fool".

I wouldn't do it.

scrummy_mummy_2

You answered your own question in your second sentence.

silvercar

Let him get the valuation from the quick sale companies, see what they offer first.

SunderlandBlackCat

scrummy_mummy wrote: »

You answered your own question in your second sentence.

Not quite sure what you mean by that. Please could you clarify?

mountainofdebt

Well for my mind I would ask myself the following questions:

1) Are both of you able to get a mortgage in the first place.....can you both afford a second mortgage

2) Who would the 'tarting up' - potential here for falling out if one party is thought of not pulling their weight.

3) Would it be worth it when you think about early redemption feess, CGT, solicitors/estate agents bills

david29dpo

Do some homework. How much are the same type of houses selling for? What are your buying costs, selling costs, tarting up costs and interest payments. Work out the profit who would like to make it worth your while and then you have the buying price. If all this adds up do it. i would and have.

SunderlandBlackCat

mountainofdebt wrote: »

Well for my mind I would ask myself the following questions:

1) Are both of you able to get a mortgage in the first place.....can you both afford a second mortgage

Both making far more money than we were when we took out our present mortgages. I'm currenty overpaying my existing mortgage by 300% to bring it down so will basically stop overpaying & divert the money to the second mortgage.

2) Who would the 'tarting up' - potential here for falling out if one party is thought of not pulling their weight.

Both going to go straight from work, & finish the decorating together on a night. There isn't really a great deal of work to be done most of the problems seem to revolve around things like it being absolutely full of junk & he took out some fitted wardrobes but didn't replace the carpet so the carpet only covers 3/4 of the room. Kitchen & bathroom are both less than 3 years old & just need a lick of paint.

3) Would it be worth it when you think about early redemption feess, CGT, solicitors/estate agents bills.

Neither of us are within tie in periods on our current mortgages & could raise the funds from equity in our current homes if that works out cheaper than getting a joint mortgage then paying hefty fees for repaying the joint mortgage after a few months. We have a meeting with a mortgage broker tomorrow to discuss the various options

Neither of us has done anything that would incur CGT this financial year so we shouldn't be hit that much by it.

The house 2 doors down just sold a couple of weeks back for £15k more than he's asking us for & that is a slightly smaller mid-terrace without a garage & this is an end terrace with a garage so there should still be some profit potential & were happy for the solicitors, estate agents fees to come out of that before we split it.

Thanks for that