Shared Home Ownership Acquisition...

goller

I bought a newly built house in 2014 with a friend for the value of £145,000. My friend at the time didn't have a good enough credit rating to get onto the initial mortgage so the mortgage was acquired fully in my own name to the value of £108,500. There was a plot reservation fee of £500 and an initial deposit of £7250 which we both paid £3875 each and the rest of value of the house was purchased via a Help To Buy Equity loan from the government, for a value of 20% of the house which was also in my name.

2 years on, we've decided we need to get our own space with our respective partners so we agreed to sell the house and divide whatever money was left into two. We've had the house valued by 5 estate agents and gathered that we would want to sell the house for £160,000.

After looking at other properties me and my partner have decided to buy my friends stake in the house instead of moving but we agreed that the value this amount would be the amount we would each receive after selling the house (including any fee's).

We spoke with a financial advisor from an estate agent, who deduced the amount would be:

£160,000 - Desired Sale Price
-£32,000 - Help To Buy repayment*
-£105,720.20 - Existing Mortgage
-£2,000 - Estate Agent Fee (inc VAT)
-£1,000 - Solicitor Fee

£19,279.80 - Equity Profit

- £200 - RICS Valuation Cost
- £200 - Help To Buy Administration charge

Divided by 2

£9,439.90 - My amount
£9,439.90 - Friends amount

*this is determined by an RICS chartered surveyor who values the house, they will take 20% of their valuation or the Sale price depending on which is higher.


According to the above the amount my friends stake in the house is worth is £9,439. Before I give them that amount I wanted to get the figures double checked by someone with a bit more understanding, some advice and whether I need something documenting this transaction to cover any potential fallback.

Any advice and help would be extremely appreciated.

getmore4less

I think you could get the EA fees down to 1% thats what they are offering around our way to get business.

There was also a case made recently on a thread that you save your buying costs but friend still has them.

A compromise on the selling costs to balance that could be seen as fairer way to do it.