Being bought out of a mortgage

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Hi all, myself and my partner have broken up and are looking at options for what to do with the house. Has anyone bought someone out, or been bought out of a mortgage? Is it possible to do without too much bad feeling/resorting to mediation? How did you come to what you both felt was a ‘fair’ price for being bought out?

Any advice welcome, thanks!

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First, my condolences. I almost went through this in 2017 after a breakup but we ended up selling instead. I imagine things might be different in different countries, as far as process and common practice. But having put a lot of thought into it, this is how I see it going:

  • Parties agree on a percentage of ownership each has, which could vary based on a number of things like what each applied to down payment, mortgage payments, sweat equity, etc. or just what you feel is fair.
  • You get an appraisal.
  • Determine what party A would need to pay party B to buy them out based on that appraisal and ownership percentage.
  • Determine what paperwork needs to be done, if both parties are on the ownership documents.
  • Get some sort of legal document written with your agreed upon terms and signed by both parties, if not covered by the standard ownership documents.

I think the first step is where you have to see eye to eye before going further, probably even before appraisal. I would consider having a lawyer assist in drafting a legal document with the terms you’ve agreed on, perhaps with a way out if the appraisal doesn’t come out where it needs to be for the buyer-outer to afford the transaction (if that’s an option).

For additional context on my situation and the selling path: I wanted to buy out my ex girlfriend but didn’t for a few reasons.

  • The real estate market was hot and she thought the house would sell for more than a pre-sale appraisal (likely true).
  • We were first-time homebuyers, which allowed us to buy the house with only 3.5% down. Since we’re in an expensive market, that made buying the home possible but meant we still owed a lot.
  • In the 4 years we owned the house, the value had greatly increased but my savings account hadn’t, so I was afraid I couldn’t afford to buy her out anyway. A second mortgage or refinance may have been an option to acquire the cash, but I’m not sure and I feared my equity would then be much lower and wasn’t sure the value would keep climbing. I didn’t want to be upside down.

In hindsight I would have been just fine, and faired better if I’d found a way to buy her out, but she would have walked away with less and she wasn’t agreeing to that option anyway. We still made a very nice profit from the sale so I can’t complain, but it was a nice house in a great neighborhood.

So definitely consider the market and what you owe, if anything, in your decision.

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I’ll buy this place and fire you all
sorry probably not the right tone gl

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Hi, thank you very much for your reply, that’s been really useful. I’m in a tricky situation because my ex is reluctant to sell, but also isn’t sure whether she can afford to buy me out at a price that I think is fair. So something has to give somewhere.

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So essentially she’s not in agreement with your percent ownership in the house? I’d start there if possible, and not think as much in terms of "how much cash does she need to buy you out. It will all hinge on the appraisal anyway, right? See if you can agree on percentage, get the appraisal, then she can decide if she’s able to buy you out or not.

What do you want out of this? You mentioned she wants to buy you out, but are you interested in buying her out or just cashing out (whether via sale or buy-out)?