• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Multiple home owners - One wants to buyout

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

K

kennethhoff

Member
What is the name of your state? South Carolina

Three brothers all own a townhome equally. This home was given to us after moms death, went thru probate, now all are equal in ownership and all three names on deed.

One brother wants to buy the other two out. The brother wanting to buy the other two out has bad credit but wants to take a home equity loan. Anyone know how a home equity loan works with muliple owners? I am one of the brothers willing to sell, but don't want to co-sign a loan for buying brother, nor sign-over my 1/3rd of ownership to him so with more equity he can get more of a loan amount. How do we do all this where no one can take advantage?

Thanks
Ken
 


W

Warped

Member
I'm not a lawyer but I recently bought out my only sibling's share of a house that was left to both of us.

Is the house now in all 3 brothers' names? If they put the mother's will through probate then that likely automatically transferred it over. That's how it worked for me here in VA.

If so, the brother who wants to buy the other 2 out can try to get financing for 2/3 of the appraised value of the home unless all 3 agree on a lower selling price. That will make it a more attractive loan to a bank because technically, he's buying the house for 2/3 value. It's also good for him because he will have 1/3 of the value in instant equity. I'm writing this with the assumption that the house is totally paid off.

In my situation, when I bought out my brother's share of the house we jointly inherited (he was left 2/3 interest in the house and I was left the remaining 1/3 interest) we agreed on a selling price for anyone to buy the house. There was a lein on this house from where a family friend paid off my mom's mortgage on another house and used that house for collateral.

Our original idea was to sell it, pay off the lien and split the proceeds 2/3 and 1/3. When it became apparent that it would take thousands of dollars to prepare the house for sale to an outside buyer and that we would both lose money to realtors etc, I decided to just go ahead and buy my brother out and keep renting the house to the long-term tenants that live there and he agreed.

In my situation, I got a home equity loan on the house I inherited fully (no liens) and used a lawyer for the paperwork end of the deal. The closing (deed transfer etc through the lawyer) cost me about $750.

In the end, the math looked like this. I'm using round figures here for the sake of simplicity.

Selling price: $75,000.00
Lien payoff: $15,000.00
Remainder: $60,000.00

2/3 of $60,000.00 is $40,000.00 <--- Paid to brother

In the end, the house cost me $55,000.00

I hope that helps, as confusing as it seems. :D
 
B

BelizeBreeze

Senior Member
Warped said:
I'm not a lawyer but I recently bought out my only sibling's share of a house that was left to both of us.

Is the house now in all 3 brothers' names? If they put the mother's will through probate then that likely automatically transferred it over. That's how it worked for me here in VA.

If so, the brother who wants to buy the other 2 out can try to get financing for 2/3 of the appraised value of the home unless all 3 agree on a lower selling price. That will make it a more attractive loan to a bank because technically, he's buying the house for 2/3 value. It's also good for him because he will have 1/3 of the value in instant equity. I'm writing this with the assumption that the house is totally paid off.

In my situation, when I bought out my brother's share of the house we jointly inherited (he was left 2/3 interest in the house and I was left the remaining 1/3 interest) we agreed on a selling price for anyone to buy the house. There was a lein on this house from where a family friend paid off my mom's mortgage on another house and used that house for collateral.

Our original idea was to sell it, pay off the lien and split the proceeds 2/3 and 1/3. When it became apparent that it would take thousands of dollars to prepare the house for sale to an outside buyer and that we would both lose money to realtors etc, I decided to just go ahead and buy my brother out and keep renting the house to the long-term tenants that live there and he agreed.

In my situation, I got a home equity loan on the house I inherited fully (no liens) and used a lawyer for the paperwork end of the deal. The closing (deed transfer etc through the lawyer) cost me about $750.

In the end, the math looked like this. I'm using round figures here for the sake of simplicity.

Selling price: $75,000.00
Lien payoff: $15,000.00
Remainder: $60,000.00

2/3 of $60,000.00 is $40,000.00 <--- Paid to brother

In the end, the house cost me $55,000.00

I hope that helps, as confusing as it seems. :D
Click to expand...
There are two reasons your little story has no bearing on the poster's situation. Would you like to guess?
 
K

kennethhoff

Member
Warpred -

Thank you for sharing your story. I did check and that is how it would work, except I wouldn't sign for a home equity loan higher than 1/3 value. We finally agreed for the 3rd brother to buy us out after getting several realtors to see what the fair market value is. Then the 3rd brother would have to get a loan and buy us out. If he can't afford it ultimately, we would just sell on the open market. Buy by selling to my brother we could get around captial gains (except buying brother once he would sell), and a few other SC taxes. Thanks again.

BeliezeBreeze

As for you, I remember you from a post I had a long time ago. Just like then, you still now have nothing to say except your sarcasm and nasty remarks. If you don't have anything to add to someone to help, why just say nothing instead of being such a jerk about it. Having to add something which isn't funny to anyone, helps no one. Keep your thoughts and remarks to yourself if you can't say something decent.


- Ken
 
You must log in or register to reply here.

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top