House buying question with this process?

[Mottie]

My daughters boyfriend jointly owns a 2 bed flat with his brother. They’ve owned it a couple of years. The brother wants to move in with his girlfriend so rather than them selling up and going their own ways, my daughter and her boyfriend like the flat and would like to buy her brother out.

My daughter is going to see a solicitor as she is unaware of the process but can anyone enligten me on the process - I imagine this must be a fairly common scenario these days with brothers/sisters or even a couple of friends buying a property together? I mean, it’s not as if they are going to be sharing a property for ever.

Has anyone had any experience of this?

 

[Bosswhite]

Does the Brother want to sell up ???

 

[Mottie]

Yes. He is very keen to sell.

 

[noseall]

I guess you value the property, agree a sum then let a conveyancing solicitor take care of the financial and title legalities etc. Agree to split the fees etc.

 

[^woody^]

Value the flat, girlfriend pays half, deeds get changed, ownership changes.

 

[Doggit]

Get three estate agents to value it, and then take an average of the 3. In a normal process, you'd go with the highest valuation, and then haggle over the price, but that doesn't work in this situation. Now the daughters boyfriend owns half already, so the assumption is that the your daughter will be buying out the brother at a higher rate than the boyfriend purchased, so the solicitor will have to draw up the deeds so that both have a share in the property at the current value.

 

[EFLImpudence]

Buying and selling the flat is the easy bit.

Who is going to pay?

Is your daughter going to pay all of the (presumed) mortgage so that she will own half of it, or

are she and her boyfriend going to pay half each so that HE will own three quarters of it, he already owns half.


I don't want to be mean but HE would be stupid to put it all in joint names.

 

[big-all]

you have all sorts off things to think about
can the new pair afford the greater mortgage
will it incur a higher interest rate
will they get a mortgage
will stamp duty be due
if its treated as a brand new mortgage they may need a new home buyers report with things like electrics needing bought up to date and possible other items let go first time need sorting now like roof or dpm for example

 

[Doggit]

And of course if it's you daughters first purchase, then she shouldn't be liable for stamp duty on her half of the property, but the solicitors will sort this out. A home buyers report will be a definite requirement for a mortgage, but as it's for only half the value of the property, it's unlikely that there'd be any queries over the condition of the property. And being a flat, major repairs would be done the service charge.

 

[big-all]

another point
if its a fixed rate/term mortgage it may have a big penalty for early redemption

 

[Mottie]

Thanks all. Blimey - a right minefield! She'll have to pay a solicitor to explain the technicalities. It might be better for the brothers to sell it and start again.

 

[Doggit]

No, then the boyfriend would end up paying stamp duty unnecessarily, plus all the estate agents fees, and doubling solicitors fees for selling as well as buying, plus moving costs. Most solicitors will do an initial interview free of charge, so that should tell them how to handle things, plus selling would involve the upheaval of moving. But having said that, most couples tend to move eventually into what your daughter will then consider "her own home", but best to do it in their own time. Once you've got the place valued, it might have risen sufficiently to justify looking elsewhere - keep all options open, and wait till they've got a more informed picture.

 

[big-all]

yes you need to do your homework
the less work the better as it costs
not exactly sure how buying selling a part share works but would assume not easy
fairly sure the mortgage wont be transferable or adaptable but could be wrong

 

[Mottie]

Spoke to my daughter today. Apparently a name change can be done so that she can replace the brother as a joint owner/mortgagee with Nationwide. Just needs to pass checks proving that she can afford it and agree a price to buy the brother out and a solicitor can do the legal stuff.

 

[big-all]

Spoke to my daughter today. Apparently a name change can be done so that she can replace the brother as a joint owner/mortgagee with Nationwide. Just needs to pass checks proving that she can afford it and agree a price to buy the brother out and a solicitor can do the legal stuff.

that would be good news if its as simple as swapping over "shares" and names with the land registry change being another cost
but not sure how the mortgage "swap" bit will work ??
the value off the house has changed so a element off refinance will be required
if you simply swap one name for another then it would need cash to buy out the replaced person where does that come from ?? without a remortgage ??
i think it will be far more difficult as the share off the property may be the same but percentage owed will be very skewed against the new person added
it may be dead simple and i am overthinking this but cant see how it will work simply ??
ok thinking about it you have probably asked a name change possible then the answer will off course be yes but this wont cover the finance/mortgage at all as this will assume it carries on as before