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

Razzmatazz

Hi all

Hoping for some impartial advice on my situation - I've done some searching but struggling to find anything which answers my questions specifically.

Ex partner and I split up (amicably) last summer - we own a house together as joint tenants which we bought 3 years ago.

I'd like to buy him out of the house, which in principle he's happy with - he doesn't want to stay or buy the house himself, and he wants to get his equity as quickly as possible.

I've worked it out as follows. Remaining mortgage on the house is 200k. I had 3 valuations on the house which came out as 'up to 300k', 300k and 310k.

Equity would be shared equally, except his parents did give us 10k towards a deposit originally - which I'm happy for him to have.

What I've suggested is that we take 300k as the value for the house and deduct 5k from this to account for the Estate Agency fees and Solicitor fees that we would have to pay if we were to sell the house on the open market. Then deduct 10k which he would get and split the remaining equity 50/50 - so he would get 52.5k.

He won't accept this at all, and is arguing that it's unfair that EA fees should be taken into account, and that we should just sell the house on the open market.

My view is that the EA fees are an unavoidable cost and as such should be deducted from the equity (neither of us has the time for a DIY type sale), so this is money he'll never get regardless - I think what I've offered him is more than fair and by selling on the open market he'll end up no better off, if not worse - because he'll be paying the mortgage for potentially many more months, as well as taking on all the associated stress and hassle that comes with selling.

I've offered to meet him in the middle as a compromise but he's having none of it.

So I'd appreciate any views on the subject... I think he's determined to believe I'm trying to shaft him, but I genuinely want to be fair to both of us.

Thanks in advance

-taff

I don't think you can take the EA fees into consideration if you are not actually paying the EA fees. [Well, you can attempt to, but I'm afraid I agree with him on this - you are gaining for doing nothing]
This will give him 55k instead.

Oakdene

Was it agreed that the deposit from his parents would be re-paid upon sale of the house?

gettingtheresometime

I'm another one for ignoring EA fees.


By doing it your way he's effectively giving you £2.5K


If you were to sell via an EA then I would deduct solicitors fees & EA before sharing out the equity

Razzmatazz

Hi Taff - but surely then I am effectively penalised and paying more to him out of my own pocket - as I have to increase the mortgage in order to pay him his equity.

He won't actually get that money if we sell the house to a third party so he's actually getting more money by selling to me than he would otherwise, whilst I'll have to take on more debt. I see where you're coming from, but it seems fair to me to offer him the exact amount he would get if we sold on the open market - he's not losing out financially in any way from this.

I did actually offer to do this as a compromise anyway, but he's also insisting the house is worth 310k, which would mean I'd have to pay him 60k.

Razzmatazz

Oakdene wrote: »

Was it agreed that the deposit from his parents would be re-paid upon sale of the house?

Originally nothing was agreed - we'd always planned to jointly repay them, although they'd said they were happy for us to keep it. There's nothing in writing though.

itchyfeet123

I'm sure you're not trying to shaft him, but it doesn't seem right to me that he/you're both paying for a service (the agent's fees) that isn't being used. I would include only incurred expenses (eg the actual fees your solicitor(s) charge to do the paperwork) in the calculation.

Oakdene

Razzmatazz wrote: »

Originally nothing was agreed - we'd always planned to jointly repay them, although they'd said they were happy for us to keep it. There's nothing in writing though.

Then by rights you don't have to pay it back....

Razzmatazz

gettingtheresometime wrote: »

I'm another one for ignoring EA fees.


By doing it your way he's effectively giving you £2.5K


If you were to sell via an EA then I would deduct solicitors fees & EA before sharing out the equity

I can't see how he is though - he gets the exact amount he would get if we sold on the open market (with zero risk etc) - the only difference is that a third party isn't benefiting from a chunk of money.

Consensus seems to be that I am wrong however.

marliepanda

Razzmatazz wrote: »

Hi Taff - but surely then I am effectively penalised and paying more to him out of my own pocket - as I have to increase the mortgage in order to pay him his equity.

He won't actually get that money if we sell the house to a third party so he's actually getting more money by selling to me than he would otherwise, whilst I'll have to take on more debt. I see where you're coming from, but it seems fair to me to offer him the exact amount he would get if we sold on the open market - he's not losing out financially in any way from this.

I did actually offer to do this as a compromise anyway, but he's also insisting the house is worth 310k, which would mean I'd have to pay him 60k.

You're taking on more debt... but also owning 100% of the property. He shouldn't be penalised for that. Your debt means you own more.

The situation does save him the fees, but it also saves you, so why even consider them.

Oakdene

Razzmatazz wrote: »

I can't see how he is though - he gets the exact amount he would get if we sold on the open market (with zero risk etc) - the only difference is that a third party isn't benefiting from a chunk of money.

Consensus seems to be that I am wrong however.

Key word there..'if'. You're not selling on the open market.