You may buy your partner out of the home that you own together if he or she agrees to sell it to you. A problem arises when you both want the home or your partner does not want to sell his or her interest to you and you do not have a written agreement setting out how this situation will be dealt with.
Your options are to work out an agreement with your partner or follow your state’s legal procedures and ask the court to order the home sold. An agreement is generally cheaper because you avoid the costs associated with selling a home on the open market. If you cannot come to an agreement, you may want to consider hiring a mediation service. A mediator is trained to resolve disputes and will develop a solution that takes into consideration both of your thoughts and feelings.
If you cannot come to an agreement and need to resort to the legal system, you must file what is known as a ‘partition’. The home will be ordered sold and the net proceeds split both of you. Net proceeds are the funds available after paying the mortgage, any liens and the cost of the sale. Before forcing the sale, the judge has the option of permitting one of the co-owners to purchase the other’s interest in the home at fair market value.
Fair market value is found by comparing the amount that other similar homes are selling for in the local market and the age, location and condition of the home. The result should be in the range of what a buyer would be willing to pay to the seller for the home in its current condition. A real estate appraiser that is familiar with your local market should be hired to find the fair market value of your home.
According to Nolo Law for All, most states presume that the individual’s interest in the home is 50 percent each if both names are on the deed. A dispute may arise if one party feels that he or she is entitled to a larger share of the home due to contributions of either significant extra money or labor. If this conflict arises, you can try to reach a fair settlement agreement. One method is to total the amount of down payment, mortgage payments, improvements and labor each has contributed and then compare the figures to come up with the percentage each owns in the home. If you cannot agree on a percentage, you may want to hire a mediator to help you resolve the issue.
Transferring ownership of a home involves deeds, taxes, filing fees and other costs that must be taken into consideration. It would be wise to consult a real estate broker or an attorney to find out what your state’s requirements are and to assist you with the transfer or sale of the home.
