Ex buying me out our home, what's fair?

[garlicbreathing]

Hi.
I am hoping that maybe someone would have some experience of this situation and could advise me on whether or not he's offering me a good deal, or trying to pull a fast one.

We bought our new build flat 3.5 years ago with shared equity (15%) and a 5% deposit. Purchase price was 103k. Since then, it has now been valued with a home report at 125k, but an identical flat sold last month at 132k. We have 80k on the mortgage and my STBXH has told me that he thinks he will be making me an offer of around 11k to transfer my share of the flat onto his sister, who will be providing the money for this.

We're planning to sit down this week to discuss. He claims that there are a lot of fees involved which he did not expect, such as solicitors, admin fees and early payment out of the mortgage and shared equity. I am planning to consult a solicitor too, however at the moment he has all the paperwork and knows what is happening, and I am completely clueless and don't even know what questions I should be asking.

I would really appreciate any help!

[rodneydel]

I have had to sell a property as part of a divorce and my oh is being bought out of the home he owns with his ex. In my experience, selling a home is sometimes a hell
Of a lot easier and much fairer really.

If he is buying you out, you are effectively closing your existing mortgage and paying the ERC and sorting a remortgage. Assuming he's spoken to a mortgage advisor to check he can get a mortgage for that amount on his own?

You will also need to have a solicitor as its as though you are BOTH selling to just HIM. So you would both pay solicitor fees to reflect this.

Also, for being bought out/divorce a valuation from a solicitor is a different valuation than a house sale.

Assuming you both have Inputted the same amount of equity, I would deduct the ERC and then work on a settlement from the equity left, bearing in mind any changes due to furniture being left in property etc. Then you both pay your own solicitor Dee's.

[rodneydel]

*feed

[rodneydel]

Argh I mean fees

[garlicbreathing]

He has had advice from a solicitor and has got a mortgage promise, but needs to get a conveyancer (?) Before this is final.

So if I get a solicitor, I just get them to deal with his solicitor? We are not yet divorcing as we are in Scotland and have not yet been separated for the year requirement.

[HeddaGarbled]

I can't really see why you need to sit down to discuss it. Certainly don't agree to anything during that discussion. I suppose he can explain his reasoning and the numbers on which he is basing his offer. No need to get into an argument, just say that you will consult your solicitor.

[Collaborate]

I'm confused.

Are you saying that you bought, between you, 85% of the property, and got a mortgage for 80% of the value? Do the builders still own 15%?

It's your reference to shared equity that I'm confused by.

If I'm right, then is the valuation of £125k for 100% of the property, or just your 85%?

[garlicbreathing]

Sorry. The mortgage is for 80%, and the builders still own 15%, so whatever the selling price they will get 15%. 125k is the valuation of 100% of the flat.

I would be happy with my half of the equity, but without having to take away the fees he is telling me this is costing him. I'm not sure what fees we would still be liable for if the flat was sold, so I will need to get more information on that. If the offer he gives to me is the exact same as what I would get if the flat was sold, then I'll be leaning towards just selling.

[titchy]

So there's only 5% equity to be shared yes? 5% of £125000 is only £6000. So £3000 each. And he's offering you £11000 - snap his hand off!

[garlicbreathing]

Flat valued - 125k (home report)/ 130k (estate agent)
Shared equity - 18,750 / 19,500
Mortgage - 80k / with fees 83k.

So equity is 23,250 / 27,500

There are fees involved with both solicitors and with estate agents.

[MeMySonAndl]

I would probably take it even if I know is a bit unfair, the legal fees to fight back will be higher than the extra £1500 you can potentially get.

The courts will go for the home report/independent valuation anyway, as the agencies often inflate prices to get the client.

[garlicbreathing]

Yeah I'm maybe leaning towards just accepting out of ease and to save hassle.

[throwingpebbles]

It's still your mortgage too so you are perfectly entitled to ask the mortgage co for all the figures and to get more valuations if you wish.

I just got 3 valuations for my divorce settlement and they ranged from 225- 270!!!

[throwingpebbles]

Definitely not worth spending lots on legal fees if you are fairly close on the numbers.

Getting details from mortgage co etc on early redemption and getting your own valuations done won't cost anything though.

[garlicbreathing]

I don't think the valuations will change. I'm happy we are in a position where we do have equity as it's a new build and the developer then put prices up by around 25k on similar properties in the time since we bought. An identical flat sold for 132k last month which was bought at the same time as ours.

[Berthatydfil]

It seems to me that 11k is the lower end of your share based on the valuations. Are these independent valuations ? Or just what he's told you? If they aren't independent valuations you should get at least one done for yourself.
However your share would be 11.75k to 13.5 based on the range you suggest so it is a little on the low side.
You don't know the costs but I would imagine that transferring the mortgage is less than a sale as there would be no estate agents fees.
Before you can accept this offer you need to have your own legal advice a valuation and full info on the mortgage fees transfer costs and other charges etc. There will be no moving costs for him if he stays put either.
You may be separating amicably but he might not want to do you any favours either. You both want a fair settlement which may mean you don't accept his first offer without getting your own advice.

[garlicbreathing]

Yes the valuations were independent. The flat which sold last month which was identical to ours had the same home report value (125k) and was on the market looking for offers over 128k. It achieved 132k.

He has told me there are fees involved with the shared equity (admin charges and solicitors). He's told me that to change the name on the deeds from my name to his sisters will cost £1000.

[Cabrinha]

I came off my old mortgage although wasn't bought out (yet: legal charge). Can't remember how much it cost to change the deeds with Land Registry (think TR1 form) but it was nowhere near £1K! The fee was quite small, but we had solicitor fees too. Including the legal charge work too, I'm sure it was less than £500. That was in England though.

In fact I just googled TR1 fees - in E&W there's a big reduction of it is part of matrimonial / break down / court order - not sure from your post if you are married.

Anyway, I know there can be significant differences in Scottish law but I'd be surprised if something like registration fees were so different?

[garlicbreathing]

I'm thinking the 1k is including the solicitors fees too. If the flat was sold on the open market, would I still be liable to pay for the deeds to be changed?

[MeMySonAndl]

I bought my ex out, and don't remember any fees apart of those for setting up the new mortgage in my sole name.

Since I was not moving houses, no searches were necessary so the expenses were mostly related to pay for a new valuation, etc.

Having said that, it may cost you far more money and grief to get those £1000 more than just let it go.

It is expected that there will be a temporary drop in house prices if we leave the EU so it may be a good idea to take the money now than wait for him to have the opportunity to lower the payout further.

[MeMySonAndl]

And no, I don't remember paying any fees to change the deeds.

[garlicbreathing]

Thanks Me, we have some costs associated with the shared equity and paying that off as it can't be transferred solely onto him, and with getting out the mortgage early (3k) as he can't transfer than onto himself solely so is needed to go through another mortgage supplied.

I have a solicitor appointment on Wednesday, and I am leaning towards just accepting the offer but making sure everything is done above board and he isn't going to screw me about.

[garlicbreathing]

Can anyone think of any jumping questions I should be asking at the appointment on Wednesday? I'm trying to be organised and think in advance, but my head is complete mush!

[MeMySonAndl]

I really don't know if this will apply to you, but when I bought him out, this is what I did:

-Used the independent valuation as the starting point.

• He thought the house was worth more than that so he put it in the market for more, I couldn't do anything about it so I needed to wait for an offer to come before I could put mine in.
  
• When the offer came, I matched it but the nasty bitch my exh is, declined my offer and accepted the other person's one. So following on my solicitor's advice I threatened him to go back to court as I had the right to first refusal as I was living in the house. He backed of for a few days.
  
• I got a mortgage offer for the amount needed to cancel previous mortgage + amount needed to pay my exh's percentage.
  
• I paid for the mortgage setup fees, which included changing the deeds to my name, etc. No conveyancing/searches needed as I was already named in the deeds.
  

And we finally got rid of each other. So I would say that he shouldn't be asking you to absorbe the expenses needed for him to keep the house BUT considering the amount solicitors charge per hour, I would say it would be cheaper to loose £1000 there as asking your solicitor to prepare the case and join you at court could be more expensive than £1000.

[garlicbreathing]

Thanks so much for sharing your experience! It has given me such an insight into all of this.
I'm hoping the solicitor will be able to tell me more about how things will work for me, but it has been good to know a baseline.

I didn't think it was fair to be paying half of the fees of the set up of his mortgage especially when he left me, but I know that if we sold I would be liable for half of the fees for that.

I'm so ready to move on that I can't be bothered with putting up too much of a fight. It's just going to be so much hassle

[nickiminageatrois]

i am in a similar situation and also in Scotland, only I am buying out my STBX.

Our valuation was 350 but similar properties have been going for 370, and if it went to the open market that is probably around what we'd get. I went with this value of 370 because he would refuse otherwise. No reason why you can't do same.

We are splitting the legal costs on the same reasoning as that's what we'd have done if it was a sale.

The legal costs were pretty high IMO as the transfer needs to be carried out by the Building Society (who charge a few hundred) and a conveyancing solicitor need to instruct it also (approx £1000). I think some of this is related to house price so might be different for you.

We split the equity halfway. It's not quite finished yet because our solicitor wants a copy of our signed minute of agreement - to ensure that any financial arrangements are water-tight. It needs to include how we plan to divide the "former matrimonial home."

Feel free to PM me.