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Figuring Equity in House to Buy Him Out

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Gabby

Guest
Hello, I was just wondering how they figure how much equity we have in the house to figure out how much I would need to pay him off to stay in the house. Do they figure it with the expenses added in as when you would sell it? For example, would they subtract the 7% real estate agent fees, & other expenses that would be incurred to sell the house first. Or would we just take the current value of house, minus payoff & divide that equity? Any one deal with this before? We live in state of Kansas. Thanks.
 


ALawyer

Senior Member
The initial cut is simple -- curently appraised value of the house (by a qualified residential real estate appraiser less the mortgage and any other liens on it. That's the equity.

Now if you sold it, both of you would share the commissions and sales expenses. You'd get 1/2 of the balance, after commissions. If you want to buy it from him it probably is a negotiation issue. While you'd try buy it at 1/2 the equity less all of the sales commssions and likely fix up costs, and taxes that have to be paid until the sale, the other side would say if you want to buy it there is no sales commssion and no fix up expense involved so why should you get a discount?

I'd guess the compromise is 1/2 the equity less 1/2 of what the normal sales commssions would be and 1/2 of what the essential fix up would be.

You'd also want to get a low appraisal and he's want a high appraisal, and as all appraisals are really just estimates, and only an actual sale would give the exact price, that may be the hardest part. Some folks agre on a single appraiser, others each select one and split the difference or have the 2 select a 3rd.

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This is intended as general information only and NOT LEGAL ADVICE. You are not my client, and I have no obligation of any kind to you. To retain a lawyer, go to http://AttorneyPages.com
 

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