How Do I Buy Out Someone I Own a House With?

A co-owner buyout can be one of the cleanest solutions after a breakup.

One person loves the house and wants to stay.

The other wants to move on and receive whatever value is appropriate for their ownership interest.

Everyone avoids listing the home.

Perfect.

But only if the buyout is actually done correctly.

The first problem is usually value

The first problem is usually value.

Owner A thinks the home is worth $750,000.

Owner B thinks it's worth $650,000.

Neither person should be allowed to win the valuation argument simply by being louder.

Lisa can prepare a current market analysis using comparable sales and the property's actual condition.

If the circumstances call for a formal appraisal, obtain one.

Then look at the debt

Then look at the debt.

A $700,000 house with a $500,000 mortgage is financially different from a $700,000 house owned free and clear.

HELOCs and other property obligations can also matter.

Next comes the legal ownership question

Next comes the legal ownership question.

Lisa does not decide how much each person legally owns.

If there is disagreement, attorneys should address it.

Then determine how the buyout will be funded

Then determine how the buyout will actually be funded.

• Does the person keeping the property have cash?
• Will they refinance?
• Can they qualify?
• What happens to the existing joint mortgage?

These questions need answers.

Finally, handle the ownership documents properly

Finally, make sure the ownership documents are handled properly.

Nobody should discover five years later, when trying to refinance or sell, that the old co-owner was never removed the way everyone thought.

A market analysis is useful even without a sign in the yard

Lisa can be useful even though no traditional listing ever happens.

A REALTOR®'s market analysis is not only for people putting a sign in the yard.

Sometimes it helps people decide whether they need the sign at all.