Realestate Help Please!!!! NJ two family- home (real estate, mortgage)

[Quike123]

Ok, I need help understanding something. I am looking to buyout an exsisting two family from a family member. Currently they own 50% and I own 50% and everything is split down the middle. . I understand there are several ways you come to price (subtract the appraisal amount- from what is owed) or two just take the equity in the home and divide that by two. Either way, the amount is pretty close to the same which I am ok with.
Here is the part where i don't understand. Let's say I need to sell the house in a year since I realize I can't afford it or want to move somewhere else. Based on what I have found online the realtor cost is never taken into account. How is this possible. If you sell the house at around the appraisal price minus the 6% realtor cost, you are losing money instantly? Am I better off just selling the house all together. Sounds like it would make more sense although I don't want to do that.

I have heard of people/lawyers put this into contracts or negotiate this. Does anyone know anything about this. It's not a divorce its just two family members. Once is looking to move into a single family home and I just want to stay put right now until I figure where I am going to be in the next year or two.

[GiantRutgersfan]

If you are buying a multi family place, you either need to be commited, or its not gonna work out.

To use a poker term, either go all in or fold. If your unsure of your finances and think you might have trouble paying for it by yourself, Or if you are looking to sell in 1-3 years, you should really just get out and sell

[South Jersey Styx]

I did this one time and it was called an Assumption. Since my house had no equity my financial part to "buy out their share" was 1/2 of the original downpayment. The cost for buying out would differ if there is equity in the house.

In this process, the deed has to be changed but so does the mortgage. What this means is that you have to qualify for the mortgage all by yourself. I hired a Real Estate attorney and the whole transaction was as smooth as butter.

But I agree with the other poster -- if you don't feel that you can afford this
house, even if you are approved by the mortgage company, then it's best to sell now and walk away.

[FlyersFan]

Originally Posted by Quike123

Ok, I need help understanding something. I am looking to buyout an exsisting two family from a family member. Currently they own 50% and I own 50% and everything is split down the middle. . I understand there are several ways you come to price (subtract the appraisal amount- from what is owed) or two just take the equity in the home and divide that by two. Either way, the amount is pretty close to the same which I am ok with.
Here is the part where i don't understand. Let's say I need to sell the house in a year since I realize I can't afford it or want to move somewhere else. Based on what I have found online the realtor cost is never taken into account. How is this possible. If you sell the house at around the appraisal price minus the 6% realtor cost, you are losing money instantly? Am I better off just selling the house all together. Sounds like it would make more sense although I don't want to do that.

I have heard of people/lawyers put this into contracts or negotiate this. Does anyone know anything about this. It's not a divorce its just two family members. Once is looking to move into a single family home and I just want to stay put right now until I figure where I am going to be in the next year or two.

If you don't know whether you can afford it or not now don't buy it !!! Now is the time to "realize" if you can afford it....not next year ?

[Marc Paolella]

Originally Posted by Quike123

Ok, I need help understanding something. I am looking to buyout an exsisting two family from a family member. Currently they own 50% and I own 50% and everything is split down the middle. . I understand there are several ways you come to price (subtract the appraisal amount- from what is owed) or two just take the equity in the home and divide that by two. Either way, the amount is pretty close to the same which I am ok with.
Here is the part where i don't understand. Let's say I need to sell the house in a year since I realize I can't afford it or want to move somewhere else. Based on what I have found online the realtor cost is never taken into account. How is this possible. If you sell the house at around the appraisal price minus the 6% realtor cost, you are losing money instantly? Am I better off just selling the house all together. Sounds like it would make more sense although I don't want to do that.

I have heard of people/lawyers put this into contracts or negotiate this. Does anyone know anything about this. It's not a divorce its just two family members. Once is looking to move into a single family home and I just want to stay put right now until I figure where I am going to be in the next year or two.

You can't expect your family member to pay any part of a future commission. That would not be fair. If you settle up and take ownership of this asset, it is now yours, and all future costs are rightfully on you. You also get all future income and any appreciation in value if you hold it long enough. So decide if keeping it makes sense now and act accordingly. Also speak to a tax professional as there may be a capital gain that has to be planned for.