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

HouseBuyer77

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.

Paying him his equity is fair, you want to pay him his equity minus a bit.

You may be right that he still gets a better deal out of this than he would if the house was sold on the open market (so fees actually incurred), but that doesn't mean it's fair.

Razzmatazz

itchyfeet123 wrote: »

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.

I guess the way I see it, it's not paying for a service, it's just deducting a value from the house because we would never achieve the full 300k without going through an EA.

I just can't understand why he should financially gain from selling to me by getting more than he would get if we just sold the house.

That said, I did offer to remove EA fees from the equation if we agreed the value at 300k and he won't do that either.

Razzmatazz

HouseBuyer77 wrote: »

Paying him his equity is fair, you want to pay him his equity minus a bit.

You may be right that he still gets a better deal out of this than he would if the house was sold on the open market (so fees actually incurred), but that doesn't mean it's fair.

Okay fair enough - I'm clearly wrong.

I thought it was fair to give him what he'd get if we sell, plus removing any stress and hassle from the equation.

BJV

I would love to be able to agree with you but???? TBH if I where you I would pay the extra 2.5k and move on. I am sure that decorating etc you will have spent more than that. It seems quicker and easier and for the sake of 2.5k it will mean that it is done and over.

Equally it would annoy me but at the end you will have the house.

Lucy_Lastic

Do you have the 3 valuations in writing?

I would tell him to get at least one valuation by an agent of his choice, in writing and then take an average of all the valuations, work out the equity, give him his £10,000 then split the rest 50/50.

In my opinion no hypothetical fees should be deducted.

The fact that you are taking on more debt is your choice.

The other choice is to sell, pay the costs, give him his £10,000 then split the remaining equity 50/50.

Razzmatazz

BJV wrote: »

I would love to be able to agree with you but???? TBH if I where you I would pay the extra 2.5k and move on. I am sure that decorating etc you will have spent more than that. It seems quicker and easier and for the sake of 2.5k it will mean that it is done and over.

Yeah I did offer that to him as a compromise but he's also insisting the house is worth 310k, which means I'd have to pay him an extra 7.5k.

I don't agree that it is worth that much (based on the valuations I've had), so it looks like selling is the only option. Unfortunately he's difficult to live with so I'd hoped for a quick resolution - but not to be sadly.

Thanks all for the responses - pretty clear consensus on this in any case.

Finst

On the estate agent fees, It is normal practice to include these as you originally suggested. The posters who suggested these should be excluded are (fortunately for you) wrong.


When I got divorced a few years ago, the lawyers on both sides quickly agreed an allowance of 3% of property value (or 9k in your case). This was apparently a generally accepted industry standard.


The rationale is that the market value of an asset is the net amount you could receive by selling it. Using a non-property example, its like having £300 in a savings account with a £10 admin fee for withdrawing money - the net value of that is clearly not £300

Cloudydaze

If you are going to charge him for the 'selling fees', then he should factor in his buying fees.

You are in a better position than him by staying in the property as you won't have to pay fees for buying a new property. He will.

You're planning to charge him for selling when you're not and then you're not compensating him for his additional buying fees. Do you really think that's fair?

Razzmatazz

Finst wrote: »

On the estate agent fees, It is normal practice to include these as you originally suggested. The posters who suggested these should be excluded are (fortunately for you) wrong.


When I got divorced a few years ago, the lawyers on both sides quickly agreed an allowance of 3% of property value (or 9k in your case). This was apparently a generally accepted industry standard.


The rationale is that the market value of an asset is the net amount you could receive by selling it. Using a non-property example, its like having £300 in a savings account with a £10 admin fee for withdrawing money - the net value of that is clearly not £300

Thanks Finst - this was my rationale on the situation, although it seems many people do not agree.

Do you know if there is any documentation or reference available online to this industry standard? Or would I be better off if I talked to a lawyer?

marliepanda

Razzmatazz wrote: »

Thanks Finst - this was my rationale on the situation, although it seems many people do not agree.

Do you know if there is any documentation or reference available online to this industry standard? Or would I be better off if I talked to a lawyer?

There is no industry standard. It's entirely what you agree. Finsts partner agreed. Yours is not. Do you have lawyers involved? Different situation entirely.!

If he doesn't agree; does that benefit you in anyway? I don't think so.