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Double
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Fair value for the house???
      #140652 - 08/28/06 10:08 AM

I am looking for some 3rd party advice on this one.

Our house was appraised at value, 400K. Due to the crazy market, we have about 300K in equity. My ex wants me to give her half or 150K. I will have not problem refinancing her 150K and the remaining 100K mortgage.

The problem is that I don't think I should be giving her the full 400K value. My reason is that if we were to sell the house and got the full 400K, she would be getting 1/2 of less that 400K. There are agent fees, closing costs, costs to get the house up to par for selling, etc.

In my opinion (and I might be wrong), I should should be able to buy the house from her at the same NET value she would get if we sold it to a 3rd party. Actually, I should get a little better deal since she will only have to sign a quit-claim deed and be done vs having to make the house ready and pay expenses while it sits on the market.

Is my thinking right or am I just being an a-hole to my ex?

- Double


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Miranda
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Re: Fair value for the house??? [Re: Double]
      #140672 - 08/28/06 11:05 AM

In most cases I have seen on here, you cannot deduct fees unless the fees have actually been incurred. There is no such thing as hypothetical or potential fees.

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Double
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Re: Fair value for the house??? [Re: Miranda]
      #140707 - 08/28/06 12:20 PM

I'm not deducting the fees. What I am saying is that, if the the house were to sell to someone else, my ex would get (300K - fees) / 2. But she wants me to pay 300K / 2.

I am just asking that I get the house for the same NET price she would get if sold to someone else. Is that wrong?


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Miranda
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Re: Fair value for the house??? [Re: Double]
      #140714 - 08/28/06 01:00 PM

Right... but the house is not selling, is it?

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Double
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Re: Fair value for the house??? [Re: Miranda]
      #140720 - 08/28/06 01:41 PM

It is not up for sale right this moment. If she does not want to sell me the house at the same NET value she is willing to do for someone else, then I will most likely not buy her out and then the house will go up for sale. And in this area, the market is turning soft. It will take several weeks to get the house in selling shape. I will also move out which will require her to start contributing to the monthly mortgage and expenses. I have been doing that since I have been living in the house since the split since it seemed fair.

If I buy it, I'll take it AS-IS, the ex can leave the stuff she wants but has not place to store it, and she gets the money quicker. I would think that would be enough of an incentive to let me have it for what will turn out the same amount of money that she would get if it were sold.


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Cinder2
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Re: Fair value for the house??? [Re: Double]
      #140866 - 08/28/06 06:51 PM

So, in other words, you're going to blackmail her for more money. If she doesn't take the net, then you're going to force her to take it by selling the house. Seems like it would be smarter to keep half of the gross and continue to enjoy your investment.

Cinder


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jaiye
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Re: Fair value for the house??? [Re: Double]
      #140909 - 08/28/06 07:37 PM

It would 1/2 of the equity of the APPRAISED value. You can't charge her for fees that don't exist. If the judge orders you to pay her 1/2 the equity it would be $150. No fees would be deducted.

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jaiye
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Re: Fair value for the house??? [Re: Double]
      #140914 - 08/28/06 07:45 PM

I guess thsat what you do depends on whether you also want to be paying half of those expenses while paying for another place to live. There is no quarantee as to how long it will take you to sell the house and remember that however long it takes that also reduces the amount of money you will clear out of the house. Also if she were the one keeping the house, how would you expect to get paid for you share of after trumped up fees or half of what it is really worth? If you look at it that way then maybe she should get paid what it MAY be worth sometime in the future after it has increased in value cause it MAY be worth more it a year or two when you sell it. NOT very fair huh?

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Gecko
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Re: Fair value for the house??? [Re: Double]
      #140915 - 08/28/06 07:47 PM

The problem is the word "IF" as in IF I/WE WERE TO SELL THE HOUSE, THE NET WOULD BE 300K LESS SELLING COSTS. But you are NOT selling the house and thus you are NOT incurring costs and IF and WHEN you sell the house down the road...all that lovely money will be solely yours.

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Spring
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Re: Fair value for the house??? [Re: Double]
      #140981 - 08/28/06 10:24 PM

First, you might want to have a second appraisal done. Appraisals can vary alot depending on the appraiser...I would have a second one done. The appraisal was likley done on an "As Is" basis...you don't often find an appraiser who will account for "potential". If you have a second one done, it may be more...it may be less, but if they are both current...you're best bet at an actual market value would be an average of both appraisals.

As for your question regarding "net value", Realestate fees vary by individual Realtor and are negtotiable. It would not be 'fair' to account for a fee that you can't be sure would exists. Might I suggest that instead of accounting for all of that, make a deal with her to split the re-fi costs...the actual costs for you to buy her out and any taxes etc that are involved. Even if you end up paying all the closing costs, its still likely cheaper than court!

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Never consider the possibility of failure; as long as you persist, you will be successful.


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Double
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Re: Fair value for the house??? [Re: Spring]
      #141025 - 08/29/06 07:58 AM

Gecko, if I were to buy the house and then have to turn around and sell it in the near future, I would be paying the fee's. The "all that lovely money will be solely yours" wouldn't.

Cinder2, you are probably right. But see my comment to Gecko. If I get the house and then turn around and sell it, I will be responsible for the fee's 100%. Is that fair?

Sprint, she has said that the appraisal was for potential, not As-Is. There is probably about 5K of work I know of that needs to be done. And if someone more knowledgeable about selling houses looks at it, they will probably find more little things that need to be fixed. You are correct about the volotility of real estate fees. I was going by an average.


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Double
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Re: Fair value for the house??? [Re: Double]
      #141027 - 08/29/06 08:00 AM

Also, what happens if I get an appraisal and it is lower? Which one is valid? What if she just says that she wants to go with hers?

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Gecko
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Re: Fair value for the house??? [Re: Double]
      #141046 - 08/29/06 08:48 AM

Gecko, if I were to buy the house and then have to turn around and sell it in the near future, I would be paying the fee's. The "all that lovely money will be solely yours" wouldn't.

---> And "in the near future", your house is going to be worth more so what are you b1tching about except that you're trying to be a greedy a-hole about it all. Sorry, but NO judge is going to allow "selling costs" to be deducted if you are NOT selling the house.

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If you air your dirty linen in public, expect people to comment on the skid marks!


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Spring
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Re: Fair value for the house??? [Re: Double]
      #141111 - 08/29/06 11:51 AM

So was this appraiser then working for you explicity? The bank? Who hired her, your soon to be ex?

Generally in split ups like yours, you take the average of the apprasier each party hires. An appraiser should not be appraising on "potential".

One other suggestion I have for you is that you both hire individual home inspectors if the work tha needs to be done is an issue. Again, this should be as you SHOULD have your appraisals done on an as is basis. If you have two seperate home inspections, you can have estimates done accordingly and again, attach that to the 'net value' as you call it of the home.

If you're splitting hairs over $5k I don't see anything relatively 'reasonable' going to happen between you. YOu need to research cases in court that deal with such matters...I'm thinking a judge will not be so inclined to think as you do. If you believe that somehow your divorce will be 'fair' in your own eyes, you need to become a bit more realistic.

Any home you buy on todays market will require some sort of work. As you are the 'buyer' and the 'seller', you have no one to negotiate that with but you. I honestly think you better do a quick tally of court costs before you stand your ground for a few measly thousand here. If my suggestions are not appealing to you or your intended ex, either swallow the few extra dollars or prepare to spend a whole lot more on court costs...and then swallow these few extra dollars anyway.

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Never consider the possibility of failure; as long as you persist, you will be successful.


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Double
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Re: Fair value for the house??? [Re: Spring]
      #141127 - 08/29/06 12:37 PM

Gecko, Thanks for the "greedy a-hole" comment. That helps. I came to this board asking for opinions and putting my thoughts out since this is my first (and I hope only) divorce. Most people who know me would think that I am a very fair person and bend over backwards to make people happy even if I get the short end of the stick.

Spring, she was the one that did the appraisal. She did it without my knowledge, which is not a bad thing. It just would have been nice to know since I am living in the house now. And if this was only over 5k, I wouldn't be complaining. I guess the proper thing to do would be to get my own appraisal for the property as-is and go from there.


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Spring
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Re: Fair value for the house??? [Re: Double]
      #141161 - 08/29/06 01:46 PM

Absolutey!! That's what I sensed may have happened...especially since the appraiser was willing to value the 'potential'. I still question the appraisers ethics...did she write the "potential" down as a number to calculate inot the appraisal? Just how did she account for it? It is not unheard of to be able to give an appraiser a number to work with...especially in an escalating market. Be sure that it is an appraiser and not a Realtor doing an evaluation...big difference between the two. It is common that each spouse will have an appraiser for whom they pay for the appraisal...the very nature being a biased appraisal. This is why I strongly recommend that you have your own done. I would also even add to that a Realtor's evaluation...they are usually free, just be straight with the Realtor as to why you are requesting the evaluation...and that you aren't looking to sell right now.

I hate divorce...it sucks.

--------------------
Never consider the possibility of failure; as long as you persist, you will be successful.


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getnadivorce
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Re: Fair value for the house??? [Re: Double]
      #141170 - 08/29/06 01:57 PM

Sounds simple, let her have the house at the appraised value and she can buy you out, then you just move somewhere else. It was her appraisal, so it must be right.

There are three simple things that can be done. She keeps the property and pays you for your half based on what she feels the house is worth. You keep the house and pay her for her half of what you think the house is worth. Or you put it up for sale and let the buyers tell you what it is worth! Then you can both be equally unhappy!


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HHLoanOfficer
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Re: Fair value for the house??? [Re: Spring]
      #141174 - 08/29/06 02:03 PM

Obviously this is a negotiable amount. Just because the home appriased for $400K doesn't mean it would sell for that amount. The home could sell for an amount greater or less. And yes, there would be fees to be paid if sold so, yes, you could net less. But the person moving out has fees and costs associated with moving in to a new location as well shouldn't these costs be shared as well? So being fair means coming to a reasonable agreement. If you both will be leaving the property why not agree to adjust the settlement after all the costs and revenue are known.

--------------------
Hank H.
Residential Mortgage Specialist
hank.hemmendinger@suntrust.com


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Double
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Re: Fair value for the house??? [Re: getnadivorce]
      #141183 - 08/29/06 02:11 PM

Spring, I am worried about the appraisal amount since the only other house in the neighborhood for sale is going for 50K less and the houses are fairly comparable.

Yes, and they do suck. I find myself doing things I never thought it would do to anyone, little less someone I was in love with. I am not a better person for going through this :(

getnadivorce, I would not have a problem with her buying me out. If I came up with a price to buy her out with, I would not hesitate to let her buy me out for the same price. It is only fair.


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Double
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Re: Fair value for the house??? [Re: Double]
      #141224 - 08/29/06 02:51 PM

Hank, if we were both leaving the property, this wouldn't be an issue. I am trying to come up with a fair amount to buy out my ex since I would like to stay. If we can't come up with a fair amount, then we will be forced to sell and then splitting up the assets will not be a problem.

And I do see your point regarding the person leaving having expenses as well. I will try to keep that in mind.


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Spring
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Re: Fair value for the house??? [Re: Double]
      #141250 - 08/29/06 03:34 PM

So a comparable home in the neighbourhood is listed for 50k less? Interesting...what are the comparable sales the appraiser used? I don't think they can include a property listed for sale as any kind of comparable because it hasn't sold. Appraisers must use comparable sales, not listings. Did you actually see this apparent appraisal?

It works for you in an argument that a comparable home is listed at 50k less...becauise Realtors also look at past sales when setting a number..as well as current market conditions and competition. YOu have good cause to worry about the appraisal because of what I have mentioned before...and especially because of the comparable home down the street. I would completely challenge this appraisal...did a friend of hers do it or something?

You will get through this...and at the end of the day, don't sell out your integrity for any one. Its not uncommon that one or both divorced partner tries to inflate the value of assets if it will be in their favor. Unfortunately, it seems divorce is war these days...an you have to protect yourself.

Call a certified appraiser.

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Never consider the possibility of failure; as long as you persist, you will be successful.


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Spring
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Re: Fair value for the house??? [Re: Spring]
      #141253 - 08/29/06 03:37 PM

or....tell her she can buy you out at HER price :-)

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Never consider the possibility of failure; as long as you persist, you will be successful.


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Double
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Re: Fair value for the house??? [Re: Spring]
      #141254 - 08/29/06 03:40 PM

I haven't seen the appraisal yet. And I am really interested in what a realtor would have to say since, as they put it, that is where the rubber meets the road. The markets in my area are getting soft, just like most places. The prime time to sell was probably 6 months ago.

I think I will get an appraiser and a home inspector out this weekend and see what comes up.

Thanks.


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Spring
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Re: Fair value for the house??? [Re: Double]
      #141256 - 08/29/06 03:44 PM

Good. I'd hold off on the home inspection as it really isn't a necessary expense just yet...unless you want to do it. Genuine appraisals will not account for potential. If you have serious structural issues, that does come into play as far as the real market value. If it was being sold, there are issues that will effect the price. Do you have anything like that to worry about or is is just a bit of paint and elbow grease? I'm talking major repairs such as a leaky roof, cracked foundation etc.

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Never consider the possibility of failure; as long as you persist, you will be successful.


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Double
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Re: Fair value for the house??? [Re: Spring]
      #141411 - 08/30/06 07:27 AM

There is nothing major. The two biggest things are going to be about 3k. I'm sure there is some paint needed and general tiding up. Oh, and the yard could really use some work. The roof is only about 5 years old. I can't speak to the foundation, but I don't expect anything.

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HHLoanOfficer
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Re: Fair value for the house??? [Re: Double]
      #141461 - 08/30/06 11:07 AM

For 2-300 you can get a second appraisal or go on line to home value finder and use that as a barometer as to whether you should get a second appraisal. By all means, you have a right to see the first appraisal

--------------------
Hank H.
Residential Mortgage Specialist
hank.hemmendinger@suntrust.com


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LinusluvsSally
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Re: Fair value for the house??? [Re: HHLoanOfficer]
      #141628 - 08/30/06 04:05 PM

Look, for you this house is not an investment it is a place to live. For her it is an investment. You should be comfortable paying her half of the appraised value so get your own appraisal and be sure that you point out the comparative listing down the street to the appraiser. Then just refinance her off the loan and get your Quit Claim Deed and you're home free.

You shouldn't really need a home inspection you should already know what works and what doesn't and it won't affect the appraisal. You're not buying a new house that you don't know anything about. You're just trying to get your ex out of the house you live in.


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