Are you selling co-owned home because you want out of a partnership? It is not uncommon for two or more couples to form a partnership and buy a home together. This can be great on the front end 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 worse if partner #1 really needs to sell. Trying to find a buyer for partner #1’s interest is tough – the buyer first needs to love the property, then 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 because of the complexities of the human dynamics of the partnership, especially with multiple partners.
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, or the average of the two appraisals, will be used as the “agreed to sales price.” It is also common for normal commissions and closing costs to be subtracted from this number as if it were a traditional sale.
How can I help you? I have over 30 years of sales and marketing experience and am a top real estate agent in the mountain town of Crested Butte, Colorado representing affluent clients who are buying and selling their dream homes and ranch properties in the mountains. To see featured properties or search the MLS – visit chriskopf.com. How is the Crested Butte Real Estate Market doing? Click this link to see my monthly Crested Butte Real Estate Market Reports. I appreciate the opportunity to earn your business and be your Crested Butte Real Estate Agent.
Previews® Property Specialist
Coldwell Banker Bighorn Realty