Buying ex out of house - can't agree what's fair?

mad_dr

Just want to say Razzmatazz that, despite this probably being quite a stressful period and process, you seem like a thoroughly fair and decent person. Hope you manage to get it worked out.

FWIW, my view is that the EA fees should be deducted before the equity is split. Cheers.

Razzmatazz

GDB2222 wrote: »

If you were to sell the present house, would you not eventually be buying somewhere else? You'd then have all the costs involved in that. Stamp duty alone on a £300k house would be £5k. Plus removals, mortgage fees, legals, decorations, etc. By keeping the present house, you save all that.

So, if you want to be fair (and you say you do), I suggest that you make two calculations:
First, what he would get if the house is sold. (What the house is worth to him.)
Second, what you gain from keeping the present house. (What the house is worth to you.)

And then a fair solution is probably somewhere in the middle.

Do you really feel that bringing the cats into this calculation is helpful? If you think that he should help pay for their upkeep, that's an interesting point, but then he'll presumably be entitled to visiting rights and a say in what they get fed. Either way, these costs are small compared to the house value.

No the cats are irrelevant in terms of cost to be honest, I only really mentioned them in the context that I'm already taking additional responsibility away from him which makes life easier and simpler for him - so in the context of compromise and finding something that's fair for everyone it's a factor that makes it more complicated for me to move.

Yes I would eventually buy somewhere else - even if I buy him out I probably won't stay here more than a couple more years, it's mainly just to sort out the living situation with my ex quickly, and give me a bit of breathing space to figure out the best option longer term, without having an urgency to find a place to rent - or sharing the house for a lot longer with my ex, which is a little awkward as we both have new relationships.

Razzmatazz

mad_dr wrote: »

Just want to say Razzmatazz that, despite this probably being quite a stressful period and process, you seem like a thoroughly fair and decent person. Hope you manage to get it worked out.

FWIW, my view is that the EA fees should be deducted before the equity is split. Cheers.

Thanks - that's really nice of you to say and I appreciate it

Person_one

When my ex bought me out of the place we owned together, it was just a given that we would knock a bit off the estate agent valuation. A few grand for realism, and an extra few grand for the fees that we would have to pay.

Neither of us questioned that it was the logical and fair thing to do, so I was as surprised by some of the replies you got here too! The house may well be 'worth' 300k on paper, but some of that 300K is money that neither of you would ever actually see in a real sale to a third party, so it makes perfect sense to count it out from this kind of sale too.

david1951

Sometimes I think people just play devil's advocate on this forum. Of course it is fair that you take estimated selling fees off. That is what the courts do and you certainly aren't greedy for it.

However, this is a negotiation and other factors come into it. At the moment you aren't agreeing, so you need to either persuade him somehow, call his bluff, or sit it out.

bluegreenworld333

With these things an amicable agreement is worth more than anything. Solicitors cost money, courts too. I have waited ten years to get my half of my house due to some very unfortunate circumstances, ok the value of my house has risen, but it will cost me more to buy again as there is SDLT and capital gains to consider...take my advice, a gentle kind agreement is worth the world. Try getting a mediator? Good luck!

NYGiants

Initially I was leaning towards deducting EA fees before doing the calculation, so that he would get exactly the same as if it was sold on the open market; but you have to also factor in that to put himself back in the same position as you (home owner of 300k house) he would have to incur those fees again, whereas you don't have that cost of buying again (he already contributed to half of your purchase).

Your Way..
House Price: 300k
Outstanding Mortgage: 200k
EA Fees: 5k
Parents Gift: 10k
Equity to Split: 95k
Your equity: 42.5k ((300-200-5-10)/2)
His equity: 52.5k ((300-200-5+10)/2)

His Way..
House Price: 310k
Outstanding Mortgage: 200k
Parents Gift: 10k
Equity to Split: 110k
Your equity: 50k ((310-200-10)/2)
His equity: 60k ((310-200+10)/2)

I would suggest that you would go halves on his potential future purchase (at the same 5k rate) if he accepts the 300k valuation so the split would be..

Compromise..
House Price: 300k
Outstanding Mortgage: 200k
EA Fees: 5k
His EA Fees: 5k (future)
Parents Gift: 10k
Equity to Split: 95k
Your equity: 40k ((300-200-5-5-10)/2)
His equity: 55k ((300-200-5+5+10)/2)

So when he does eventually buy, after taking out his 5k purchase fees, he would be left 10k better off than you (the money gifted from his parents); so you're both in the same postition financially.

Andyjflet

I wouldnt be incorporating the EA fees, alternatively could he not say that his parents £10k deposit should rise in conjunction with the value percentage increase in the property. You arent using an EA so therefore give him his £55k thats fair IMO

Lloyd90

You seem to think he is gaining financially but not paying the fees when selling, but you have not considered that if you did sell you would also have to pay 50% of those fees AND fees to buy a new place, which you wouldn't if you got this house.

Therefore you would BOTH be gaining financially, not just him.

Lloyd90

Andyjflet wrote: »

I wouldnt be incorporating the EA fees, alternatively could he not say that his parents £10k deposit should rise in conjunction with the value percentage increase in the property. You arent using an EA so therefore give him his £55k thats fair IMO

Also this! He could possibly claim that that £10,000 was originally a deposit representing a % (was it 10%?) in which case the initial £10,000 he contributed would now be £30,000.

I highly doubt he'd have a leg to stand on without that noted legally though.