# Negative Equity - Bought property with friend + now want to move on



## DeKi (8 Sep 2010)

Hi there,

Really hoping someone can help.... I bought a property with a friend in 2006 with a friend. We both live in the house. I've just got engaged and so wish to start up a home with my fiancee. Situation is :
*
a) We owe 370k on the mortgage
b) Property currently worth approx 290k
c) Friend refusing to buy me out
d) If I buy her out she has insisted its at the 370,000 price (1/2 of that obviously). *
Her argument is that she is already loosing over 20k (Inital deposits, fit out etc. We both contributed to all that 50/50) She is saying that it is my decision to move on etc...

What are my options? My fiancee and I have good, secure jobs. I would happily live in the house for another few years. The worry I have is "buying the negative equity". It may be years before I break even - thats if house prices eventually rise.  Should we sell and go our seperate ways with a clean slate? 

Any advice would be greatly appreciated.

Many thanks
Kiera


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## Pope John 11 (8 Sep 2010)

If you buy the house, you owe her:

1. Mortgage €370,000/2 = €185,000
2. Value of fit out costs which she paid for less a depreciation value
3. Initial deposit she paid down.

Alternatively let her buy you out & she will owe you the same.


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## Brendan Burgess (8 Sep 2010)

What did your agreement say when you purchased the house?


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## DeKi (8 Sep 2010)

I want to do what is fair and right. However I would much prefer move out and buy a family home with my fiancee. This is mid tce, communal gdn. Most people I have asked are saying that we should have the house valued and that whoever buys who out pay the "open market value". She may change her mind and buy me out. We then each have to deal 50/50 with the neg equity.......


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## DeKi (8 Sep 2010)

we didnt set one up...


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## Brendan Burgess (8 Sep 2010)

If you bought it as recently as 2006, it's unfair on your friend to force her to sell the house now. 

She has lost her first time buyer's benefits. 
She has lost the costs of furnishing the house.
She would probably end up with a loan to pay off the negative equity. 
She would be unable to buy a house for some time. 

If it suits her, she could buy you out at the market value, but it doesn't seem to suit her. 

You could tempt her to buy your share of the house by selling it at a discount but this would obviously increase your loss. 

You can sell your share of the house to someone else, assuming that the bank will allow this.

You can move out and rent your share of the house.

Your fiancee and yourself can rent for a while until it suits your friend to sell. 

I would run these options by her and try to reach an agreement to sell the house within a reasonable period - say to put it on the market in 24 months to have it sold within 36 months.

Brendan


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## Brendan Burgess (8 Sep 2010)

DeKi said:


> we didnt set one up...



If you buy a house with your fiancee, make sure to set one up. There is guidance on askaboutmoney about how to do this and details of a firm of solicitors who specialise in it.

Brendan


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## nek (5 Oct 2010)

Hi Dek
i'm in the same boat as you... and puzzled as to what to do too..

but my negative equity is more like 145K - so this maybe out of the question for me -  
i'm currently exploring this as an option

i'm wandering would it be possible for you to transfer the neg equity to a differant property

so basically, you could each buy a house for 145K (half of 290K)
but pay but pay back 185K (half a 370K) on your separate properties

possibly putting good money before bad... and i can't see you getting much for 145K in lucan but perhaps mullingar or athy


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