how to fairly pay joint owner to assume full ownership

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Thanks all.

"If you really want to be fair you take the value and subtract the mortgage and the actual costs of the sale and split that in half." - yes, agreed. That's how we got to the $70k number, which includes the actual costs of the sale (realtor expenses, escrow fees). The argument for $80 ignores actual costs of the sale.

At any rate, I'm optimistic that we'll be able to meet in the middle with the co-owner. Really appreciate everyone being a sounding board for me on this, which has been very helpful.

 

[LdiJ]

Thanks all.

"If you really want to be fair you take the value and subtract the mortgage and the actual costs of the sale and split that in half." - yes, agreed. That's how we got to the $70k number, which includes the actual costs of the sale (realtor expenses, escrow fees). The argument for $80 ignores actual costs of the sale.

At any rate, I'm optimistic that we'll be able to meet in the middle with the co-owner. Really appreciate everyone being a sounding board for me on this, which has been very helpful.

Actually you misunderstood that. Its still a sale, your family member is still selling their half to you, and there are still going to be some costs associated with that sale. You will still have to do a closing, particularly since you will be refinancing as part of the whole deal. Therefore, there will still be some closing costs and that is what Red was referring to in that post. Those closing costs won't include a broker's fee and probably some other odds and ends, but there will be closing costs.

 

[justalayman]

Part of the argument for the other point of view, is that the seller is taking cash out of the home without incurring any broker's fees or true selling costs...whereas later on down the road if the buyer wants to take cash out by selling they will incur brokerage/selling costs...and double or more of what would be incurred now if they sell.

I totally ride the fence on this one. I tend to lean in favor of 1/2 of the equity after selling costs, but I can see the other point of view.

I have also known people to just give up on buying out the other party and simply going ahead with selling it now and splitting the proceeds.

If the owner (after the transfer) wishes to sell the house or anything else at some later time they are welcome to and the costs should be on them. Using your argument I will add that the brother should also share in any additional profit if you are going to expect him to share in the costs some indefinite time down the road. You good with that?


Bottom line; the only fair way is to split the net now whether it be just between op and brother or sold to a third party.

 

[justalayman]

Thanks all.

"If you really want to be fair you take the value and subtract the mortgage and the actual costs of the sale and split that in half." - yes, agreed. That's how we got to the $70k number, which includes the actual costs of the sale (realtor expenses, escrow fees). The argument for $80 ignores actual costs of the sale.

At any rate, I'm optimistic that we'll be able to meet in the middle with the co-owner. Really appreciate everyone being a sounding board for me on this, which has been very helpful.

There will be NO Realtor if your brother sells his share to you. You are adding costs that will not be incurred.

There will be creating a deed, transfer taxes, recording fees, and maybe a few more specific to your state.

The mortgage costs should all be yours since you are the one obtaining the mortgage.

 

[page1]

There will be NO Realtor if your brother sells his share to you. You are adding costs that will not be incurred.

There will be creating a deed, transfer taxes, recording fees, and maybe a few more specific to your state.

The mortgage costs should all be yours since you are the one obtaining the mortgage.

Thanks justalayman and LdiJ. Here's how I see this shaping up. I'm optimistic the co-owner and I will settle in the middle, lets say $75k, as what I owe to make them whole on the sale. Then we have closing costs as you both mention, which we will share equally, and we'll let the title company sort that out for us. I'm guessing it won't be more than around $1500. To LdiJ's comment about refinance costs, these would seem to be entirely mine, as they would be for any third party buying it if we sold it on the market.

Agree?