Ask Terry Questions Help Us Make a Deal to Share a House Purchase

Help Us Make a Deal to Share a House Purchase

By Terry Savage on May 13, 2017 | Wild Card

Would you be willing to comment on this Buy/Sell agreement between me and my significant other whom I am buying a house with in Florida. The house will be in both of our names "tennants in common with right to surviorship". However if there is a falling out between the parties, and one wants "out" this is how he suggested we resolve: "Either party man iniitaitive an ageement to dispose of the property by serving notice on the other party by registered USPS mail or physical service. If the parties are unable to reach an agremeent as to the value of the property and/or who will be the buyer, the parties will meet in the law offices of xyz thriday days after notice of service. At that time each party will submit a sealed bid as to the price of the propert and its furnishings to the attorney. The highest bid will be the acquirer of the property and its furnishings and will pay the other party 50% the winning bid within 30 days completing the necessary paper work to effect transfer. The losing party will vacate the premises when the purchasing party puts $10,000 into a lawyers trust account to ensure the pruchsing process." What I don't like about this is one party could submit a super high bid (one that is not realistic) just so they win the bid. It also does not provide for the situation where one wants to sell her/his share, simply put, what would would the process of determining the value of the home so the other could purchase. Let me know if you can comment. If not, can you refer me to someone who can.

Terry Says

Whew, this is complicated.  Are you sure you want to buy a house together!?    I understand exactly what you're getting at -- but you EACH need  a separate attorney to make any deal legitimate.  Let me take a stab at playing "Solomon." A few points: You are not buying the house "in common" if you are buying it as "joint tenants with right of survivorship."  There is a big difference.   If you own it JTWROS, and if you die, the other person automatically inherits your share,  without even going through probate.  Are you aware of this? Second, there's probably a much easier way to do this.  You could sign a simple buy/sell agreement that when either of you "wants out" you will notify the other in writing.  Then within 45 days you will get three certified appraisals on the property, averaging them to get a fair sales prices.  The person who wants out agrees to accept half that price -- and the "keeper" has a subsequent 45 days to close the deal.   If the "keeper" declines to buy out the "leaver" then the house will be listed at no higher a price than the highest previous estimate.   If an offer is received and one doesn't want to accept he/she will pay the leaver half the difference between that list price and the offer accepted, and the house will be sold.  In the interim of this process and until final resolution of the ownership, each party remains responsible for his/her half of the maintenance, taxes, and mortgage payments. Now run this by your separate lawyers and see if this framework works!



a personal
finance question