Should we buy him out?

noteb10

My Fiance owns an apartment with his mate, His mate wants to sell - should I buy him out. ( my fiance and I were planning to buy together anyway.)

We have all agreed to just change names on the contract- if thats possible?

Due to poor selling market, the mate is not expecting any profit... he just wants to break free from the mortgage and move abroad...

The property has been valued buy the estate agent at the same price they bought it for 2 years ago.

Any advice appreciated, thanks!

Victor

Make sure you have an agreement in place if you ever separate.

You need to get independent legal advice for you, separate to what the other parties are getting.

Realise you are probably buying into a market that will continue falling.

"We have all agreed to just change names on the contract- if thats possible?" - not quite, you'll need to actually buy him out and there are several steps involved.

noteb10

Thanks for that,

We are getting married next year, so we need our own home anyway ( but id be happy to rent if it was safer).

We thought we would all use the same solicitor, with a view to making life easier.

It's very risky, I won't rush into any decisions....

With prices falling, I think I might be mad to go through with it. But then again we are going to have have this apartment tied to us until it sells, which isn't going to be any time soon by the looks of things!
Maybe the two guys should rent it out for a year or so, to see if the market stops falling.

Victor

noteb10 wrote: »

We thought we would all use the same solicitor, with a view to making life easier.

And what if you get signed up with a dud and the boyfriend then dumps you?

I'm not necessarily saying two (or three) sets of solicitors for the duration, but set up an appointment with your own solicitor to advise you.

noteb10

You are right, it wouldn't do any harm,

Thanks!

Reesy

Who pays the stamp duty?

Just one to watch. And bear in mind that if the mate sells his half to someone else, your girl could have a nightmare on her hands. What will he do if she says no?

Good luck.

antoinolachtnai

independent legal advice definitely needed. If you need a mortgage, the bank will almost certainly expect the vendor and purchaser to have different solicitors. Otherwise there is a conflict of interest for the solicitor (the solicitor also acts for the bank in the transaction).

but if you are going to get married, and you have to live somewhere, and you like the apartment, you should seriously consider buying this guy out.

Consider the alternatives too; if you don't buy it out, will your fiance end up in a position where he has to sell?

It's a big step, but I wouldn't call it enormously risky.

If you think it is too risky at the current price, consider offering less than what the agent has valued it at.

I take it there has been a proper valuation which was paid for, not just a pitch from an estate agent for the sale.

The_Conductor

noteb10 wrote: »

Due to poor selling market, the mate is not expecting any profit... he just wants to break free from the mortgage and move abroad...

The property has been valued buy the estate agent at the same price they bought it for 2 years ago.

It was bought circa August 2006- i.e. the peak of the market. I would be almost shocked if it was still valued at the same level. Its almost stretching credulity that it has managed to keep its value of two years ago. You need to get the advice of several agents- if the property was priced to sell in the current market- what level would it be at? It would actually be an idea to contact the banks in the area to find out who they use to do their valuations- Sherry Fitz are normally quite reliable (obviously a valuation will cost you, if you randomly ask an estate agent to value it- they will not give you a value that you need to sell it- for risk of you asking another estate agent and going with someone who appears to be able to get you a better price).

As per other comments- in no circumstances can you use the same solicitor- indeed a solicitor would risk getting hauled up if they offered to handle both sides of the sale. A solicitor acts in the best interests of its client- however who would be the principle client in an arrangement such as you are suggesting?

Re: Title- it is a property sale- you cannot simply change the name on the contract. There is a title deed which will have to be modified to reflect the changed ownership of the property- and the title will have to be lodged as any title will have to be. As a FTB it may not incur stamp duty from your perspective- but it has to be done nonetheless.

While your fiance's friend may want to extricate himself from the property and be shot of it- it really is not that simple. You (both you and your boyfriend) will not be doing yourselves any favours by simply allowing him to walk away from what has been a depreciating asset- allowing you to shoulder the 2 years of falling value in the property. Why on earth would you do this? If you really wanted a clean start- you should offer to sell the property on the open market- and if you really wanted to buy it- buy it at open market prices. A better proposition may be to sell it, lock in the current asset price (whatever you can get), rent until such time as you are ready to buy somewhere together that you are going to be happy to stay in longterm, and only then buy.

Further have you checked that the bank are willing to finance what you're proposing? They really have tightened up their lending creterion- at 90% of a reduced asset price value- split 2 ways- are you in a position where you could afford to allow the other guy to simply walk away?

bangersandmash

noteb10 wrote: »

We thought we would all use the same solicitor, with a view to making life easier.

Agree with the other posters, this is a bad idea, not to mention highly unusual. I don't think this is going to be as easy as you might think - it's not a case of simply changing a name, and handing over keys.

noteb10 wrote: »

The property has been valued buy the estate agent at the same price they bought it for 2 years ago.

To be honest, this would set off alarm bells for me. It's generally acknowledged now that apartment prices are down about 20% from the peak, new builds more so. I find it hard to believe that this particular apartment has uniquely managed to keep its 2006 value. You say the friend doesn't expect a profit, but avoiding a 20% loss sounds like a pretty good deal for him. On the other hand, you paying 2006 asking prices for an apartment sounds like a pretty poor deal for you. Would he be so keen to buy out your fiance's share for that price?

Sounds like you both need to get realistic independent evaluations from different estate agents.

I'd advise you to tread very carefully with this purchase, and get proper legal advice asap. Spending a few hundred euros to clarify your position is the least you should do when you're thinking of making a commitment of hundreds of thousands of euros.

Edit: Smccarrick got there first and answered this more comprehensively than me. The valuation you received really is quite incredulous, and it does seem like the friend is looking for a quick escape route from a costly mistake.

Edit #2: Noticed the last post from the OP was in early June, so all this advice was probably a bit pointless.

The_Conductor

Yes- seeing as the OPs last post was looking for property in the D18/Stepaside area with availability from 1st of July, I think that this idea may have been put on the long finger. Hope she sits down and gets some good unbiased advice before contemplating something like this..........