During this current time with Covid 19 right now you might not be thinking about partnerships and selling you Crested Butte home. As always I want my clients to have the information they need for when they are ready.
Selling your Crested Butte Home can be a very difficult decision, one that can be even more complicated if you are in a partnership. It is not uncommon for two or more couples to form a partnership and buy a home together. The first home I bought in Crested Butte was in a partnership with my brother.
It was a great journey for us, and we got to experience many wonderful times with our kids, family and friends. We divided up the calendar, alternating the holidays throughout the year, and we invited friends, co-workers and clients to come visit. Eventually, my wife and I decided we wanted out of the partnership because we were looking for our own home in Crested Butte. While our transition was smooth, this is not always the case for everyone. Partnerships and selling your Crested Butte home can come with its own set of issues.
Challenges with Partnerships and Selling Your Crested Butte Home
Buying a home together and being in a partnership can be great on the front end. Especially once all the details and rules get hammered out about who gets to use the home at what times, where everyone stores their stuff, and what improvements are to be made to the home, etc.
However, a partnership can be problematic on the back end when it comes time that partner #1 wants out. If the other partners do not want to sell the home, and the other partners do not want to buy partner #1’s interests, then partner #1 has a very illiquid asset. It’s also possible that the other partners cannot afford to buy out partner #1. This is a struggle in general but it’s worse if partner #1 really needs to sell and wants out quickly.
Options for New Partnership and Selling Your Crested Butte Home
Trying to find a new buyer for partner #1’s interest is tough in this situation. Firstly, the buyer needs to love the property, and then they will have to get comfortable being in a partnership with strangers. The best case scenario is that there is a friend or family member who knows all the partners and will be comfortable in this situation.
The reality is that the value of each of the partner’s shares are not worth their percentage of the value of the home. This is simply because of the complexities of the human dynamics of the partnership, especially with multiple partners.
Partnership Agreement is Vital
The partnership agreement should be written to have clear language about the exit strategy, but most do not. If there are two partners and one partner is selling to the other, it is best to get one or two appraisals and agree up front that the appraisal number will be used as the “agreed to sales price.” Another possibility is taking the average of the two appraisals, and using that. It is also common for normal commissions and closing costs to be subtracted from this number as if it were a traditional sale.
Final Thoughts How Can I Help?
Selling from a Partnership is not uncommon in Crested Butte but having an experienced real estate agent will make the process much smoother. Even if you are holding off on selling right now, don’t hesitate to reach out for more information. Stay safe out there. Contact me to help you if you have questions.
If you want to chat about the real estate market here in Crested Butte – give me a call… (970) 209-5405
I have been in your shoes – as both a Second Home Buyer and Seller here in Crested Butte.
The Crested Butte area offers a wide variety of properties including ski in/ski out single family homes, ski-in/ski-out condominiums, lake and river frontage properties, golf course property, quality homes in Downtown Crested Butte, and true fine mountain homes on acreage.
To see Crested Butte Homes For Sale or search the MLS – visit ChrisKopf.com.
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I have consistently been a Top Real Estate Agent in Crested Butte, and I appreciate the opportunity to earn your business and be your Crested Butte Real Estate Agent.
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Global Luxury Property Specialist
Coldwell Banker Mountain Properties