marital home..how do you calculate buy out amount???

[jenjen]

example: home value 150,000 existing mortgage 50,000

I was told to split the 150,000 value in half leaving 75,000 to each spouse. and the spouse who is buying out the other will be responsible for the existing  mortgage of 50,000.
this doesnt seem right

i was also told that you take the home value of 150,000 minus the existing mortgage of 50,000 and the remaining 100,000 of equity is split in half and half of 100,000 would be the buy out amount.....50,000

are any of these correct? how do you calculate?

[mistoffolees]

>example: home value 150,000 existing mortgage 50,000
>
>I was told to split the 150,000 value in half leaving 75,000
>to each spouse. and the spouse who is buying out the other
>will be responsible for the existing  mortgage of 50,000.
>this doesnt seem right
>
>i was also told that you take the home value of 150,000 minus
>the existing mortgage of 50,000 and the remaining 100,000 of
>equity is split in half and half of 100,000 would be the buy
>out amount.....50,000
>
>are any of these correct? how do you calculate?


Asset splits are, of course, always negotiable.

However, ideally, it should end up with the EQUITY being split. In the example you've given, the person buying the house would assume the mortgage and would owe the other person $50 K (half of the current equity). The first calculation is incorrect - unless there's other debt that's being used to offset the mortgage debt.

[jenjen]

Thanks, that's what i thought
I think my x and broker are trying to pull a fast one cause we had an offer of 145,000 (for ex:) and after we subtract the 50.000 existing mortgage we were left with 95,000 to split between us 47,500ea.
but, when i said i would buy out for 50,000 then the broker says that my x would be giving it away if x-agreed.  seems to me that x would make an additional 5,000

then broker does figures like this: 150,000 split would be 75,000 for x  
my question is what about the existing mortgage of 50,000? I guess I'm suppose to take care of exsting mortgage-50,000 plus 75,000 buyout if that's the case x can buy me out for 75,000

[mistoffolees]

>Thanks, that's what i thought
>I think my x and broker are trying to pull a fast one cause we
>had an offer of 145,000 (for ex:) and after we subtract the
>50.000 existing mortgage we were left with 95,000 to split
>between us 47,500ea.
>but, when i said i would buy out for 50,000 then the broker
>says that my x would be giving it away if x-agreed.  seems to
>me that x would make an additional 5,000
>
>then broker does figures like this: 150,000 split would be
>75,000 for x  
>my question is what about the existing mortgage of 50,000? I
>guess I'm suppose to take care of exsting mortgage-50,000 plus
>75,000 buyout if that's the case x can buy me out for 75,000

What the broker is suggesting is also OK IF he does it properly.

Price of $150 K split $75 K per person, but you also have to split the mortgage with each person owing $25 K - so she'd have to pay half the mortgage (actually collecting that would be nearly impossible, so I'd never agree to it). You can't split the selling price and not the mortgage.

Of course, it's generally easier to just split the equity and leave the mortgage alone.

[jenjen]

I agree with you....thanks alot. my offer is more than what he is calculating

[KAT]

Selling fees are usually included. If the house sold for the 145k realtor fee at 6% would be about 8,700k off the top, then closing fees likely another $1,400k on top of that. Does the person that retains the property also take that hit? Just something to think about.

KAT

[mistoffolees]

>Selling fees are usually included. If the house sold for the
>145k realtor fee at 6% would be about 8,700k off the top, then
>closing fees likely another $1,400k on top of that. Does the
>person that retains the property also take that hit? Just
>something to think about.
>
>KAT


True, but that 6% differential may get lost in the negotiation process.

For example, my home was appraised (3 independent appraisers at $300 - 310 K. We bought it for $270 about 7 years ago, so this was reasonable. My ex wanted to keep the house, so I offered it to her for $270 K (what we paid 7 years ago) because if I sold it, I'd lose most of the $30 K in closing costs, repairs, and realtor fees, anyway. She insisted that it was only worth $230 K, and I refused, but said that if it was worth only $230 K, I'd take it. She let me have it at that price ($40 K below what we paid for it a long time ago) (her attorney isn't too bright).

While I was pretty lucky, I don't think that wide discrepancies are uncommon, so it's best to use the value as a starting point. What is it worth to YOU to either have the house or not have it? If you buy a new house, you will not only have both buying and selling costs, you'll have moving costs, probably maintenance, painting, etc.

The bottom line is what YOU think it's worth after factoring in ALL the extras.

[jenjen]

thanks..more to think about and consider