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    • jamint
    • By jamint 8th Aug 18, 10:01 AM
    • 26Posts
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    jamint
    Being bought out of mortgage by ex - maths Qs
    • #1
    • 8th Aug 18, 10:01 AM
    Being bought out of mortgage by ex - maths Qs 8th Aug 18 at 10:01 AM
    Hi all, I have a simple "being bought out" question that I just wanted clarification on.

    My ex-gf and I own a house. We both equally paid in 20k deposit each (so 40k deposit total). We bought it 5 years ago for 185k, it is now worth 280k. We have 135k left to pay on the mortgage. We spoke and agreed to 50/50 everything.

    Therefore my sums were: 280-135 = 145 divided by 2 = 72.5k.

    Last night she messaged and offered 60k to buy me out. This is obviously lower than I have worked out below. Am I correct in my sums / is there anything else 'standard' that I might have forgotten to include in my calcs?

    Also, in the event I am bought out - will I need to solicitor to do this at my end? As far as I am aware she will need a solicitor and I will have forms to sign, but it's unclear if I will need one at all. Obviously this is the first time I have done any of this.

    Many thanks
    Last edited by jamint; 08-08-2018 at 10:21 AM.
Page 1
    • foxy-stoat
    • By foxy-stoat 8th Aug 18, 10:26 AM
    • 2,815 Posts
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    foxy-stoat
    • #2
    • 8th Aug 18, 10:26 AM
    • #2
    • 8th Aug 18, 10:26 AM
    Is that 72.5K and it has to be sold? So 72.5K less selling fees or was she going to keep the house.

    It may be that she cannot get the 72.5K on the mortgage and it will have to be sold, so you both may not end up with 72.5K at the end.

    I would say 65K and you will sign the transfer of equity form - you dont NEED a solicitor but she will appoint one if she is keeping the house - her solicitor should of told her to tell you that you should take legal advice for this transaction but not 100% necessary - as long as it is agreed that you will get X amount in the agreement that you sign the transfer of equity.
    • jamint
    • By jamint 8th Aug 18, 10:29 AM
    • 26 Posts
    • 9 Thanks
    jamint
    • #3
    • 8th Aug 18, 10:29 AM
    • #3
    • 8th Aug 18, 10:29 AM
    Sorry - should have clarified, she is looking to buy me out of my half of the mortgage and then move into the house (I am there currently, she is living with her partner elsewhere at the moment). She has confirmed she will be able to afford the mortgage, the negotiation is how much she pays me up front to buy me out.
    • Thrugelmir
    • By Thrugelmir 8th Aug 18, 10:30 AM
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    Thrugelmir
    • #4
    • 8th Aug 18, 10:30 AM
    • #4
    • 8th Aug 18, 10:30 AM
    How realistic is your property valuation?

    In any event I'd decline and simply say too low. As it's you that's going to incur the expense of buying a new property. Every k matters.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • silvercar
    • By silvercar 8th Aug 18, 10:38 AM
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    silvercar
    • #5
    • 8th Aug 18, 10:38 AM
    • #5
    • 8th Aug 18, 10:38 AM
    If you can't reach agreement then the property would need to be sold. This would incur legal costs, estate agent fees and a delay of a few months. Her calculation is possibly based on an allowance for the costs that you would otherwise be incurring, coupled with a realistic price that could be achieved, together with an element for the fact you would get the money months earlier than a sale and would not have to pay rent elsewhere while you wait for a sale.
    • getmore4less
    • By getmore4less 8th Aug 18, 11:56 AM
    • 33,275 Posts
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    getmore4less
    • #6
    • 8th Aug 18, 11:56 AM
    • #6
    • 8th Aug 18, 11:56 AM
    Costs are not 25k

    even 10k to sell a 280k place would be generous

    could be done for 5k, that leaves 70k on the table to take away, 60k is well low even for an easy exit.


    The simple "I think it is worth more" is to offer 61k to buy her out.
    • sheepy21
    • By sheepy21 8th Aug 18, 1:32 PM
    • 168 Posts
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    sheepy21
    • #7
    • 8th Aug 18, 1:32 PM
    • #7
    • 8th Aug 18, 1:32 PM
    For an easy life I'd meet in the middle at 66k, as other have said if you can't agree and have to sell, there's a whole load of expenses, stress and delays. So for me, taking a bit less would be worth a straightforward transaction.
    • jamint
    • By jamint 8th Aug 18, 2:17 PM
    • 26 Posts
    • 9 Thanks
    jamint
    • #8
    • 8th Aug 18, 2:17 PM
    • #8
    • 8th Aug 18, 2:17 PM
    Thanks for all your thoughts and opinions.

    She is apparently coming from a POV that she's entitled to more because at a certain point of ownership she paid a greater contribution to the mortgage (even though I was paying the bills/council tax and that is how we decided to divide it at the time, so I don't believe that's a valid argument). She also thinks that because she moved out it was considerate of me and made it a lot easier for myself (maybe true to an extent but I think she's overlooking how this suited her too at that time).

    In any case we've been messaging today so I'm hopeful a compromise value somewhere in between the two values (more towards the 50/50 value) will be agreed.
    • foxy-stoat
    • By foxy-stoat 8th Aug 18, 2:27 PM
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    foxy-stoat
    • #9
    • 8th Aug 18, 2:27 PM
    • #9
    • 8th Aug 18, 2:27 PM
    Unless a Declaration of Trust says otherwise you both own either 100% of the property if you a joint tenants or tenants in common with the set shared percentages.

    You are both jointly liable for the debt so neither one of you is entitled to more than 50% of the equity unless you both agree.
    • getmore4less
    • By getmore4less 8th Aug 18, 2:29 PM
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    getmore4less
    How long have they been moved out?
    Are they still paying?
    • jamint
    • By jamint 8th Aug 18, 2:55 PM
    • 26 Posts
    • 9 Thanks
    jamint
    @foxystoat We jointly own the property, with no declaration of trust, etc. The agreements we had at the time regarding mortgage/bills were reflective of my wage at the time, which she was fine with and was happy to suggest so that we both had a life. It's only now she's flagging this up as evidence of her "considerable contributions to the mortgage" and somehow this equating to her deserving more from the sale as a result. Which I naturally strongly disagree with.

    @getmore4less her and her boyfriend have never lived in the house, they've been privately renting whilst she'd continued to pay half the mortgage.
    • Thrugelmir
    • By Thrugelmir 8th Aug 18, 3:15 PM
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    Thrugelmir
    I'd suggest a response of a straight 50/50 division of equity. Is it possible that she's unable to raise the finance to buy you out?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • getmore4less
    • By getmore4less 8th Aug 18, 4:03 PM
    • 33,275 Posts
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    getmore4less
    Call her bluff and buy her out

    even if you have to sell if your valuation is right you win.
    • foxy-stoat
    • By foxy-stoat 8th Aug 18, 4:29 PM
    • 2,815 Posts
    • 1,593 Thanks
    foxy-stoat
    It's only now she's flagging this up as evidence of her "considerable contributions to the mortgage" and somehow this equating to her deserving more from the sale as a result. Which I naturally strongly disagree with.
    Originally posted by jamint
    Morally agree with her, legally though doesnt change anything - still 50/50.

    If you like you can run the numbers to get actual figures;

    How much you paid per month
    How much she paid per month
    How many months of unequal payments
    How much interest was charged on the mortgage per month
    • Thrugelmir
    • By Thrugelmir 8th Aug 18, 4:33 PM
    • 60,122 Posts
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    Thrugelmir
    Morally agree with her
    Originally posted by foxy-stoat
    Nah. When relationships flounder. Human instinct kicks in. Money is money. There's no sentiment involved. Nothing to do with morals.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • silvercar
    • By silvercar 8th Aug 18, 4:52 PM
    • 37,954 Posts
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    silvercar
    The key fact is the valuation of 280k. Is this based on what an estate agent says, what next door sold for this year or some other information?

    If that 280k is optimistic then the amount offered is more realistic.
    • sparkey1
    • By sparkey1 8th Aug 18, 8:43 PM
    • 439 Posts
    • 193 Thanks
    sparkey1
    Im wondering if she is planning to buy it with her new partner and therefore there may be a stamp duty liability, so hence the lower offer.

    If the partner has property already potentially there is 12K of stamp duty to pay.

    Regardless. In your situation I would go with the 50% share as you have worked out. In fact I did when I split years ago. We got three estate agents to value it and took the average figure. When the bank valuer came around... I might have steered him towards a lower valuation.

    In her situation, I would be offering you the 60K and maybe offering to pay the legals as a sweetner.
    Last edited by sparkey1; 08-08-2018 at 8:46 PM.
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