- Obama takes aim at ‘corporate deserters’
- Dick’s Sporting Goods lays off 478 PGA golf pros
- Senators: Cease-fire must allow Israel to defend against rockets, tunnels
- Sierra Leone doctor fighting Ebola catches disease
- Iraq welcomes Russian fighter jets, helicopter gunships into ISIL fight
- John McCain laments: Obama’s ‘self-pity … is really kind of sad’
- GOP offer to fix VA gives $10 billion in emergency funds
- Paul Ryan offers to repair U.S. economic safety net with a single grant stream
- Kim Jong-un builds bond with Putin: $250M Russia-backed addition to key port opens
- Pope Francis meets Meriam Ibrahim, a Sudanese woman sentenced to death
Cover story: When co-owners split, it’s expensive
Question of the Day
If real estate experts were singing the old song “Breaking Up Is Hard to Do,” they might change the lyrics to “Breaking Up Is Expensive to Do.”
This is the case for homeowners, and particularly for non-married co-owners - whether it’s gay couples, boyfriend-girlfriend pairs, siblings, friends or even parent-adult child twosomes who bought a house together and are parting ways.
“If one person doesn’t want to sell, then you can’t sell the house - that’s the law,” explained Stephanie Corley, a Realtor with Re/Max 100 in Dunkirk, Md. “One party can buy the other party out, but then you’ve got to refinance the house in your name, and you may not be able to qualify or afford the mortgage by yourself.”
Carolyn Parr, a former trial lawyer and judge who is a mediator with Beyond Dispute Associates in the District, pointed out that it’s often difficult for the remaining homeowner to refinance.
“Banks like having two names on the loan,” she said, adding that in buyout situations, it’s not uncommon for people to argue over the value of the house.
“The way to resolve that is to get an appraisal or bring in three different Realtors and average the sale prices that they give,” she said. “Some people will accept the tax-assessment value to save on the price of an appraisal.”
Stephen Rochkind, a certified appraiser with Area Appraisal Services Inc. in Bethesda, said appraisals typically cost around $600 and stressed that professional appraisals are more accurate than Realtor valuations.
“There’s no conflict of interest or bias,” he said. “Realtors want to get the listing and make a 6 percent commission or refer the sale to a friend and get a piece of the action,” he said.
To save money, Mr. Rochkind said it’s smart to hire only one appraiser.
“If the other homeowner doesn’t like it, get another and average the two,” he said, adding that it’s best for the homeowners to settle their differences on their own. “If you start fighting, it gets real expensive real quick. If both sides are paying lawyers to duke it out, you could be arguing at $1,000 an hour - the only ones walking away happy and with money are the lawyers.”
Ms. Parr agreed, pointing out that lawyers often ask for at least a $5,000 retainer.
“That’s at the low end - it can go as high as $40,000,” she said, adding that court cases can take up to a year to go to trial. “If you’re waiting around for a trial, you can’t get on with your life and turn the page.”
Mediating these types of real estate cases can take as little as three hours if the parties are on friendly terms and they have their paperwork together, Ms. Parr said, noting that she charges $300 for a two-hour session and splits this fee with a male co-mediator. “A real estate mediation case that involves children and custody issues may take a number of sessions and run from $1,000 to $2,000.”
If unmarried homeowners have children, the split can get more complicated, especially if it goes to court, Ms. Parr said.
“The court may allow one parent to keep the house until the child leaves school, and then the other parent is compensated in some way for waiting - maybe in lieu of child support payments or reduced alimony,” she said. “The court won’t always demand sale of the house.”
TWT Video Picks
Second- and third-stringers eye 2016 if front-runner stumbles
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- Hamas rejects Kerry's call for cease-fire; Fears grow others could join fight against Israel
- Evidence shows Russia firing artillery into Ukraine: Pentagon
- Obama's empty tough-talk: Gun prosecutions plummet on his watch
- Conservative groups decry Democrats' 'war on women' tactic
- Algerian plane diverted due to storms, second aircraft: 116 missing
- Cutler wins endorsement from gun control group
- Obama says public not familiar enough with issues
- Obama orders Pentagon advisers to Ukraine
- CARSON: Costco and the perils of mixing politics and business
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq