My share of profit from house

david29dpo

Some opinions if i may.

A friend bought a 3 bed semi to do up. he paid for everything and i did the work.

The deal was we rented the house for 10 years and then sell, with me getting half the profit.

He has excellent tenants but i would like to take my half of the profit with him buying me out.

We have had some valuations with £25000 differences. This has created problems.

We could take an average of the valuations which seems reasonable but he wants to take the lower and i the higher (naturally !!!)

Best options?

Emmia

I think the middle point of the higher and lower would be fairest.

Bigphil1474

Have all the evaluations been by Estate Agents and have they been on the basis that you are selling between you? EA's come up with a marketing price, which isn't necessarily what the property is worth (even in their opinion), so you can end up with variations just dependant on the EA's view of the market. Might be worth paying for a RICS valuation and going with that?

Exodi

david29dpo

We have had some valuations with £25000 differences. This has created problems.

We could take an average of the valuations which seems reasonable but he wants to take the lower and i the higher (naturally !!!)

If this is just having a few estate agents round, I'd tend to side with your friend. It's not uncommon for estate agents to come up with a higher price than could reasonably be achieved, perhaps as oftentimes the estate agent that tells the seller they can get the most for their house wins the business. Marketing strategy is also considered, where properties may be listed higher in anticipation of negotiation.

Personally I'd be sense checking the valuation by comparing similar sold properties in the local area (so you're comparing sold prices and not list price of houses that have not sold).

I'd also get a RICS valuation (which I think is the default for things like divorce, probate, etc) done as well and consider that. It will likely be in line with the lowest estimate (if not lower).

I can't say I'd be keen to buy someone out solely based on the spin of an estate agent (especially not at the highest price as you suggest!!!).

Flugelhorn

I think getting a formal valuation is essential - saves any arguments in the future - remember also that there will be no marketing costs etc

SiliconChip

I'd agree with getting a RICS survey, but do you know if all of the estate agents valued the property with tenants in situ? The value without tenants is likely to be somwhat higher then with them already in place. If you want to maximise your share of the profit you'd either need to evict the tenants and establish an open market price, or get your friend to agree to pay half the untenanted value (which he'll recover when he sells in the future).

MEM62

Best options?

Compromise……

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6659437/my-share-of-profit-from-house

Was this drawn up in a formal contract at all or was this just a verbal agreement? Ideally a contract would have contemplated the early exit and prescribed how it would be dealt with if the parties couldn't agree to sell the property.

Ultimately it's a negotiation, you are in the weaker position as you are the one wanting to vary the agreement. If you can't find a position that they are happy with then the status quo continues which is what they are happy with anyway.

Right now the market is likely to be unstable. Two colleagues are trying to buy and suddenly have found issues with their mortgages as banks are concerned with world events. If lending becomes problematic then prices fall.