If I need to buy out my ex-wife’s half of the house, what should I base the amount on?

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If I need to buy out my ex-wife’s half of the house, what should I base the amount on?

I am trying to buy out my ex-wife’s half of the house in order to file a quitclaim deed. This is so that she will have no rights to the house. Should I base the amount I pay her on the amount we both have paid into the house divided by 2 or should I base it on the equity in the house divided by 2? The value of the house has gone down in recent years, as have all the others in the neighborhood, so if I needed to sell it now, it would be at a loss. Then, I would be out the amount of the house and the money I have paid her, losing both her part and my part of the equity, but paying her for it.

Asked on August 2, 2011 North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you want to purchase your former wife's interests in the house you and she both own, you should first retain an appraiser to appraise the home and come up with a fair market value as to it in writing.

Using that number, you then have a contractor and/or home inspector and/or pest inspector inspect the home to see if there are any physical problems with it needing corrections. If so, they need to submit an estimate for corrections. The estimates are then debited from the appraiser's value.

You then take 6% of this number and deduct it in that the 6% represents the standard real estate commission for the sale.

You then debit all unpaid debts as to the home such accrued property taxes and mortgage owed and get a number. Divide this number in half and use this as a negotiation start. Have a written agreement signed by you and your former wife as to the purchase price of her equity in the home.

Make sure that any quitclaim or grant deed and sale with your former wife is done by an established escrow.

Good luck.


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