question about house equity. Please Help!

[ZigZag007]

What is the name of your state? NJ

I'm a newbie here and hope someone might be able to help me.

My wife presented me recently with an excel breakdown of how she thought we should divide the house. I intend buying her out.

My wife out down $4800 more than me for the downpayment of our house. (she put 58% of the downpayment and me 42%) Now she wants the % of that in equity. This seems unfair to me but perhaps I just don't understand it. iow The difference between the value now and the current balance is around $160000. She wants 58% of that leaving me with the remaining 42%. What she calls the allocation of gain on % of down payment.

If she had left the money in her account she would have perhaps made 6% a year for 6 years and her original $4800 would now only be worth almost $7000

I guess what I am asking is am I obliged to pay her the 58% because she paid more downpayment or does this sound as odd to anyone here as it does me.

I'd greatly appreciate any advice on this. It kind of makes the difference between buying her out and just selling the house for me.

ThanksWhat is the name of your state?

[Ohiogal]

Was the downpayment made during the marriage?
You are both entitled to half of the equity that accrued during the marriage.

[LdiJ]

Originally Posted by ZigZag007

What is the name of your state? NJ

I'm a newbie here and hope someone might be able to help me.

My wife presented me recently with an excel breakdown of how she thought we should divide the house. I intend buying her out.

My wife out down $4800 more than me for the downpayment of our house. (she put 58% of the downpayment and me 42%) Now she wants the % of that in equity. This seems unfair to me but perhaps I just don't understand it. iow The difference between the value now and the current balance is around $160000. She wants 58% of that leaving me with the remaining 42%. What she calls the allocation of gain on % of down payment.

If she had left the money in her account she would have perhaps made 6% a year for 6 years and her original $4800 would now only be worth almost $7000

I guess what I am asking is am I obliged to pay her the 58% because she paid more downpayment or does this sound as odd to anyone here as it does me.

I'd greatly appreciate any advice on this. It kind of makes the difference between buying her out and just selling the house for me.

ThanksWhat is the name of your state?

How much would your original share of the down payment been worth if you had simply left it in an account? Unless you are willing to apply the same rationale/argument to you, as to her, it doesn't fly.

If the two of you have been paying the mortgage equally since the home was purchased, then from a purely economic/accounting/moral perspective, I would agree with your wife. She would be due a greater share because she had the greater investment.

However, that is not how things work legally. Legally you own the home equally, therefore you are both entitled to equal shares in the property. That is how a judge would rule if the two of you don't come to an agreement.

[Bali Hai]

Originally Posted by LdiJ

How much would your original share of the down payment been worth if you had simply left it in an account? Unless you are willing to apply the same rationale/argument to you, as to her, it doesn't fly.

If the two of you have been paying the mortgage equally since the home was purchased, then from a purely economic/accounting/moral perspective, I would agree with your wife. She would be due a greater share because she had the greater investment.

However, that is not how things work legally. Legally you own the home equally, therefore you are both entitled to equal shares in the property. That is how a judge would rule if the two of you don't come to an agreement.

Sorry, but that's just not how things work in an equitible distribution state. The judge MAY rule that way but probably won't if the wife kicks up a fuss about it!

[nextwife]

Real Estate 101:

All parties in title own the percentage of the property that they are vested in title. Period. It doesn't matter who "made the payments", who brought more or less downpayment, who cut the grass or fixed the faucet or shoveled the walk. OWNERSHIP is determined by how they are vested in title, if there is no operating agreement or partnership agreement establishing any other consideration.

Thus a half OWNER, married or not, OWNS half the house.

[Ozark_Sophist]

I would say half as well. But if your wife wants more because she wants to 'win', in the divorce, it might pay to let her win.

The downpayment was $30,000. Your wife contributed $17,400. You contributed $12,600. Each of you bought half the house.

Equity is $160,000. She wants $92,800, leaving you with $67,200.

Offer her $82,400, leaving you with $77,600. Or with interest, $83,000/$77,000.

[Bali Hai]

Originally Posted by Ozark_Sophist

I would say half as well. But if your wife wants more because she wants to 'win', in the divorce, it might pay to let her win.

The downpayment was $30,000. Your wife contributed $17,400. You contributed $12,600. Each of you bought half the house.

Equity is $160,000. She wants $92,800, leaving you with $67,200.

Offer her $82,400, leaving you with $77,600. Or with interest, $83,000/$77,000.

???????

She would also "win" if he offered her $80,000.01. Do you think she will go for it???

[BoredAtty]

Originally Posted by ZigZag007

I guess what I am asking is am I obliged to pay her the 58% because she paid more downpayment or does this sound as odd to anyone here as it does me.

No, you are not obliged to split the equity 58/42 unless a judge orders such a split, and I doubt one would based solely on her down payment argument.

Barring other factors that you have not shared, her offer is unreasonable. I personally would not accept that split.

[Ozark_Sophist]

Originally Posted by Bali Hai

???????

She would also "win" if he offered her $80,000.01. Do you think she will go for it???

Women just want to be right , so a symbolic $1 might work. But they also want to be greedy , so it would probably take a bit more.

She is asking for too much, but if this is the one sticking point, attorney costs may negate any benefit from fighting for an equitable 50/50 split. So, I suggested a compromise.

[Bali Hai]

Originally Posted by Ozark_Sophist

Women just want to be right , so a symbolic $1 might work. But they also want to be greedy , so it would probably take a bit more.

She is asking for too much, but if this is the one sticking point, attorney costs may negate any benefit from fighting for an equitable 50/50 split. So, I suggested a compromise.

Are you suggesting that women are know-it-all greedy gold diggers??

So you think $3k out of HIS pocket is a good compromise? I think that $3k should be used in litigation just to show the wife who is right one last time.

[Zephyr]

Originally Posted by Bali Hai

Are you suggesting that women are know-it-all greedy gold diggers??

So you think $3k out of HIS pocket is a good compromise? I think that $3k should be used in litigation just to show the wife who is right one last time.

but it would/could turn into 5-10K to do that, sometimes it's enough to cut your losses and move on

[Bali Hai]

Originally Posted by Zephyr

but it would/could turn into 5-10K to do that, sometimes it's enough to cut your losses and move on

Why is it that HUSBANDS are told to cut their losses and move on while wives are always pampered by the court??? I just don't get it!!

[tuffbrk]

There was nothing about attn'y's having been retained or how far into a divorce these folks are. I would tell her it's 50/50 - can't imagine why she'd think she was entitled to more or why she thinks you'd accept anything less...can almost guess why this split is happening..

[Andie01]

I would be careful about buying someone out... I can't remember, but I recall reading somewhere that when you do a buy out from spouse, your cost basis remain the same, and not adjusted. So if you sell someday, unless the gain is still all within $250K exemption (from the date it was purchased), I would consider that as an factor. Why should she get away with tax-free gain and you get hit on the entire amount without when you sell someday?

Let me dig and see if I can find the source...

[Andie01]

Also, this is in CA - (not sure NJ)

Downpayments (if can be proven that it came from assets before marriage) are returned to each person without any gain. All gains are 50-50.

If Downpayment is put down after marriage and cannot proven that is solely from separate property from assets before marriage, or has been comingled, she is out of luck - it is considered her choice to co-mingled her own funds with community (like a gift), thus entire amount is 50-50.

CA is pretty straightforward about that.