Buying someone out.

Feelgood

Hi folks,

I'm just wondering whats involved in buy someone out of a property
if you initially went 50/50 on the mortgage or how are you supposed to
come to an agreed price?. I take that it is just 1/2 of the current market
value of the property?

Any insight would be most welcome...

Cheers!.

antoinolachtnai

Assuming you went 50-50 on the deposit as well, yes.

the only problem is coming up with a valuation.

a.

astrofool

Hard to get a good valuation in the current market, if you can get a valuation now, then it's going to be advantageous to the person being bought out, as the property will be worth less in a few months time (on the open market).

Jo King

The first question is if a value can be agreed. If not it might be agreed that an independent valuation take place. If a valuer is agreed then his value is accepted. In some cases three valuers are asked to give a figure and the average is taken.

antoinolachtnai

one way to deal with the valuation if you really really get stuck is for both of you to write down on a piece of paper how much you are willing to pay for the property. Whoever bids the highest has to buy the property, for the average of the two bids. This is a pretty fair way of doing it, but it obviously has problems if one party isn't really in a position to buy, or if one player decides to game the system by making a high bid that they aren't in a position to fulfill at any price.

Another way is to put the property on the market to find an outside buyer at the maximum price but giving the parties the first refusal. This is obviously going to cost you a percent or two in terms of auctioneers fees.

Is best to agree on a valuation if at all possible.

Feelgood

Many thanks for the information guys, very much appreciated...

How does the mortgage end of things work then?, does the
current mortgage have to be paid off and then apply for a new
one?.

Valuation seems like its going to be tricky alright...

antoinolachtnai

I think a fresh mortgage is required, but I'm not completely sure. This isn't a big deal in itself. If you can get the funds, the solicitor will sort it out.

The problem generally speaking is for one party to get a sufficiently large mortgage to buy the other out.

a.