Need help on real estate buy out
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Need help on real estate buy out
I purchased a forclosed home with a business partner almost a year ago. The home required renovations which my partner and I completed, bringing the assesed value of the home up $68,000 from it’s assesed value when purchased. Originally, we planned on renovating the home and renting it out for a monthly profit to both parties involved however since the renovation has been completed my partner wants to “buy me out” of the property to own and live in the home himself. What is the proper way of coming to a “buy out” price in this case? If we cannot agree what are my options?
Asked on May 11, 2009 under Real Estate Law, Virginia
Answers:
B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
You need to talk to an attorney about this. It's not a simple question, and there's more information that would be needed for a reliable opinion. You can look for a qualified lawyer in your area on our website, http://attorneypages.com
Some of the important facts here are the title to the property: is it in your name, both names, or a business name? Do you and your partner have any sort agreement in writing, either about this property or in general? How much money have each of you put into this project?
In most places, the assessed value for property tax purposes isn't reliable as a "real world" price. You can usually get a free "market analysis" from a real estate agent (they're looking for a listing), or you can hire a licensed appraiser, as mortgage lenders do, although that will cost a few hundred dollar. If you both have a substantial investment in the property and can't agree on who is entitled to what, the last resort is a lawsuit for what is called "partition," where the property gets sold on the open market and the court divides the proceeds.
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