Own apt with friend - think she wants to sell

C

carina

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Ok so 4 years ago myself and a good friend bought an apt together.
We payed €260k. 6 months later her sister bought one exactly the same with her boyfriend for €340 - we thought we were going to make a fortune when we sold.
There was never any agreements drawn up, we just always said that we'd probably sell after 4 or 5 years.
She rang me the other day to say that herself and her boyfriend - who owns an apt on his own - had applied for a mortgage and were refused simply because of these 2 apartments. I had no idea she was looking.
She did say a few months ago that she was going to move home and rent her room out for a year to save in order to buy. She asked me what my plans were, I said I had none re; the apt for now as I have no money, was out of work, am now in a min wage job...
She has not found anyone for the room yet.
When she called the other day she said that we need to sit down and have a chat about the apt and what we are going to do.

First of all how do I find out if we're in negative equity?
Second of all if I don't want to sell and there's nothing in writing is there anything she can do?

Any advice appreciated.
 
To find out if you are in negative equity you can do a number of things. The first two are handy enough options to get you in the right area.

(1) Check out this [broken link removed]
(2) Check the property websites like daft and myhome for similiar propeties in the area and make a judgement yourself.
(3) Get a valuation by 3-5 estate agents in the area and take an average.

I think she can force a sell eventually by going through the courts. Of course at that stage several years will have passed and your friendship ruined.

If you are in negative equity she will have to pay you to get out of her portion of the mortgage. You will then need to get a mortgage of your own. Which I assume isn't a runner from the tone of your post.

It seems even if you have no written agreement, you are in the time frame for making some sort of decision on the property from your verbal agreements. You have to try and be totally rational about this. If you let emotion rule your thought processes it will get very messy.
 
MentalNote said:
(1) Check out this [broken link removed]
Click to expand...

Not sure how this link is performing its calculations but just checked my own place and the current valuation is way off (based on next door neighbours sale price last month).

My property is worth 27% less than I paid for it in 2005 (based on neighbours sale), that link claims it is worth 13% less. I wish!!

Best approximation is what a similar property sold for recently imo - although that can be a difficult figure to ascertain, I only know because neighbour told me, an EA would be unlikely to release that information.

I might add, neighbours property asking price was considerably higher than selling price.
 
truthseeker said:
Not sure how this link is performing its calculations but just checked my own place and the current valuation is way off (based on next door neighbours sale price last month).

My property is worth 27% less than I paid for it in 2005 (based on neighbours sale), that link claims it is worth 13% less. I wish!!

Best approximation is what a similar property sold for recently imo - although that can be a difficult figure to ascertain, I only know because neighbour told me, an EA would be unlikely to release that information.

I might add, neighbours property asking price was considerably higher than selling price.
Click to expand...

Yeah I'd agree its very rough. I wouldn't be using it for anything other than a starting off point.
 
IME only if they get the job of selling the property - a lot of them are Auctioneers and Valuers, it's their profession.
 
IME they only charge if it is a valuation for a mortgage or some such. If its for a potential sell (which this is) then its free. You have a right to decide which agent you go with, which you can only do after they come to see the place and give you a ball park figure. You can also use this to pump them for info on the general state of play for your area/development.
 
Thanks folks.
Have tried Daft and the likes, nothing in our area recently.
Will have to wait until tomorrow night I guess.
I spoke to my mother today and she thinks that maybe they'll want to sell his place, (it's in Rathfarnham, nicer, plusher apt) and perhaps want him to move in here!! I had never even thought of that.
I wouldn't get a mortgage in a million years so me buying her out is absolutely not an option.
I don't know if we'll ever sell it to be honest.
 
So if they want to move into your place then they should buy you out.

If they (including he) becomes a tenant make sure that all your paperwork is in order just in case they'd try to pull the wool over your eyes.
 
Just had the chat....

Ok so basically she said that she doesn't want to sell.

HOWEVER.......... she thinks that it's time only one of us owned the apt. She was saying that we're both nearly 30, obviously we thought we'd sell it now and be minted but that's not going to happen. Neither of us want to be living with our friends in our 30s...

She seems much more keen on idea of me (with my parents was her suggestion) buying her out. This obv because she wants to buy a house with her boyfriend. She said several times that she'd pack up her room and walk out the door tomor.

She also said that if I wanted she would buy me out.

We reckon the apt is prob worth 200k. We are going to get valuations next week.

We bought it for 260k.

We owe 228 so the person buying would be in negative equity of 28k.

She said if I want her to buy me out she will give me 3k to leave.
 
From a purely financial point of view, if she is going to let you walk away from your share of the negative equity with €3k in your pocket, you smile gracefully and accept her offer. I suspect that she thinks about this more, and tries to get the finances together, she may well be unwilling or unable to proceed on that basis.
 
Really?
Hadn't really thought about it like that...
From the way she talked about it she has really thought it out.
It would mean that I am homeless though!
 
you are jointly in negative equity. So if she buys the apartment she will have to pay 200 plus 14 and you will have to pay 14 also! By the sounds of things you dont have 14 k in your back pocket.

To my mind if you bought 4 years ago a 6= k loss seems high.
 
Yes but what she is saying is that she will take over the mortgage and I pay nothing. Then in 5 years if she sells it any profit made will be hers.
I have zilch in my back pocket.
We bought for 260 and we are both pretty sure that they are only worth 200 now so 60 would be right.
We will get it valued next week so we know for sure.
 
Whatever you do .... get professional advice for yourself.

As you say she has thought it over well so make sure your interests are well protected.
 
Thanks. Yeh maybe you're right. Anyone know where I can get free Legal Advice? Don't have a bean.
 
i dont think you can be looking for free advice on this issue but perhaps as its your friend that is pushing the issue she should pay additional for you to get independent advice. Also would not trust the whole if i sell in 5 years thing. Get it all sorted now. Would you be happy to stay there and now you need to be compensated for your loss.
 
Yeh I think that's where the 3k comes in.
I don't really want to do anything. I mean I don't want to sell it as we'd be in negative equity. I don't want to buy her out as I don't really want to be stuck with the place but also don't want her to buy me out as then I have nowhere to live.
It's all a bit of a mess really.
 
You could try FLAC - free legal advice centre in Dorset Street? Or Citizen's information services run free legal clinics couple times a month, I think. Solicitors/barristers give their times and opinions for free on the query.....Good Luck

A
 
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