Ex Partner buying me out

Moneyravingexpert

Hi I’m after a bit of advice regarding a buy out. Partner left me which leaves the house to sort. When it comes to a buy out figure I’ve got x3 market valuations and actually gone 15k under the lowest one for us to work from. The reason I did this was because there’d be a load of fees to consider when selling so built those in. He wanted to get a further advance on the existing mortgage and do a transfer of equity. They sent a surveyor out who said the house was worth £25k less than what the market valuation we went from was so therefore he can’t lend the figure we agreed. I explained we’d need to sell the property but he wants to stay. I understand that, however I’m not prepared to accept a lower figure than what we have agreed. I’ve tried to explain that we need to go from what we could sell the house from- he disagrees. I have said if I go from his figure he could sell tomorrow and earn even more. I’m confident the house will sell for the figure we agreed. He said he wouldn’t pay that. The only way I can see if that is the case is by putting on the market. I really don’t want to be difficult but the fact they won’t release the money for him or the survey came in as that isn’t my issue. I’ve been told by x3 agents they’d absolutely believe we’d get the figure we initially worked from. How can I help him understand it’s not the survey figure that a settlement needs to be worked from?
 He also says I can’t force him to sell- now what? I just don’t know where to begin. 

cooltt

Moneyravingexpert said:

Hi I’m after a bit of advice regarding a buy out. Partner left me which leaves the house to sort. When it comes to a buy out figure I’ve got x3 market valuations and actually gone 15k under the lowest one for us to work from. The reason I did this was because there’d be a load of fees to consider when selling so built those in. He wanted to get a further advance on the existing mortgage and do a transfer of equity. They sent a surveyor out who said the house was worth £25k less than what the market valuation we went from was so therefore he can’t lend the figure we agreed. I explained we’d need to sell the property but he wants to stay. I understand that, however I’m not prepared to accept a lower figure than what we have agreed. I’ve tried to explain that we need to go from what we could sell the house from- he disagrees. I have said if I go from his figure he could sell tomorrow and earn even more. I’m confident the house will sell for the figure we agreed. He said he wouldn’t pay that. The only way I can see if that is the case is by putting on the market. I really don’t want to be difficult but the fact they won’t release the money for him or the survey came in as that isn’t my issue. I’ve been told by x3 agents they’d absolutely believe we’d get the figure we initially worked from. How can I help him understand it’s not the survey figure that a settlement needs to be worked from?
 He also says I can’t force him to sell- now what? I just don’t know where to begin. 

Hello

I've been through this myself, it may seem complicated but it isn't.

If your ex partner wants to stay in the property and you are 50/50 equity on deeds and mortgage then how he finances he re-mortgage to stay is not your concern. He has made the decision to stay so he will need to foot the bill for that. It won't be anyware near 15k, a re-mortage would cost around the same (if not slightly less) than what a normal solicitor charges for conveyancing, 1-2k max (unless your also adding in possible EA selling fee).

The issue is going to be if a lender actually gives him what he needs to stay in the property as he will be a sole applicant thus the salary mutiples will be less. It will all be done on his affordability but again that isn't your concern. If he can't get the remortgae then the only option left is a forced sale via a court order.

Survey figures are always conservative (especially right now) and do not reflect market value. Of course he's going to go off the survey figure it means he has to give you less. You've followed the correct course of action by obtaining 3 market quotes but you should have picked the average rather than the lowest. 

It's never a pretty picture when this happens but it's very common, stand your ground and insist on getting what is yours.

Moneyravingexpert

Thank you so much for this. Sometimes when we get in these heated discussions I start questioning myself and think I’m being unreasonable. The 3 quotes I got were just before covid but 2 said they’re the same. I might get 3 fresh ones but joe sure what this will achieve. Yes 50/50 mortgage but he put more deposit which I’ve made sure is repaid back to him in the settlement. My name is on the deeds etc. The valuations were 325k (this I feel is unrealistic) 315 and 310k. I went with 300.  Yes- I was adding in all EA fees as well.  I mean as hard and tricky as it is it felt logical. 

How was yours in the end? Were you alright and got it sorted? I hope so! Funny what starts off as a dream can turn the other way in time. 

I think I do need to stand firm here. I just want to get what’s fair from the selling perspective to start all over again myself. Thank you so much. 

princeofpounds

You are over-thinking this in some ways. It's quite simple.

You made an estimation of prices before Covid and tentatively agreed a figure which was a bit lower than three EA valuations.

Subsequent to Covid, he arranged to see if the mortgagor would lend him the money alone to buy out your interest in the property. Their valuation survey came in lower than your initial agreement.

Now he only has the ability and willingness to move ahead at the lower price, whilst you still think the higher price is reasonable. It is unlikely you can persuade him, but even if you did it doesn't help him raise the money from the lender, does it?

Either you or he may be right in practice - Covid certainly has affected house prices, but you may believe the mortgage valuation was in error. It is not an exact science, and these are all just opinions. Frankly I believe that it is more likely that they valuation survey is actually more likely to be realistic than an estate agent pre-Covid, but that is just one more opinion from someone who doesn't know the property.

This means the transaction cannot proceed as things stand. There are two ways to resolve it, if you cannot compromise:
- He can try to get a mortgage from a different lender, who may have a different opinion of the valuation of the property. This is certainly worth trying if the lender's valuation is the only obstacle, but he may not be willing to try for understandable reasons. Get one who is likely to use a different surveyor of course - a good broker may be able to help him.
- Or you can open it to the market and find out a best offer. If it comes in higher than his figure, then it gets sold to a third party and you split the proceeds. If it doesn't come in during a reasonable timescale, then you should change your mind and accept his bid.

If he is not willing to market, then yes you can ultimately force him, but you need to go through a legal process to apply for what's called an Order for Sale.

Moneyravingexpert

Hello there. Thanks very much for your reply. And this does make sense. I know estate agents over egg prices which is why I came down a fair bit and he agreed this figure. But- do you know by any chance If we did sell - let’s say someone did offer 300k why would they if the survey comes out less- why wouldn’t we just work from the survey figures? This is what I don’t understand. Ultimately he’s not prepared to see if an offer comes in. He wants to stay and doesn’t want to then reject it if he sees it can get that price. 

I don’t know why but I just really believe we’d get way more than the survey if it sold. Houses here don’t seemed to have changed much price wise yet especially in the sought after areas and they seem to be selling as quick as they’re going up. 

I wish I knew everything about everything!