Stupid Questions - and things you were afraid to ask - Page 145

Celestial-Todd · January 25th, 2012, 04:15 PM

Theoretical home owning question time!

Say you go 50 / 50 in a mortgage with another person. After 5 years, you want to buy out the other person and put your partner's name on it instead. Do you have to

- refinance the loan and pay the other person half the original value
- refinance the loan and pay the other person half the CURRENT value
- refinance the loan and pay the other person back the amount they've contributed so far

StephenSLR · January 25th, 2012, 04:34 PM

Quote:

Originally Posted by Celestial-Todd

Theoretical home owning question time!

Say you go 50 / 50 in a mortgage with another person. After 5 years, you want to buy out the other person and put your partner's name on it instead. Do you have to

- refinance the loan and pay the other person half the original value
- refinance the loan and pay the other person half the CURRENT value
- refinance the loan and pay the other person back the amount they've contributed so far

^ Ouch!

This would have to be negotiated between yourself and the person you went in with and best to have something in writing so there's no repercussions later. I'd recommend a solicitor and/or accountant be involved.

If it was 50/50 all the way then it's still 50/50 now. Their invested money earns interest, the property also earns interest so they'd be crazy to accept option 1 or 3, both these would put them at a loss.

The current value depends on what someone will pay for it, I'm sure you've seen auctions where the sale price fell short or went over the estimated value.

The neatest option to sever all ties and have neither party feeling like they were gypped would be to sell the place, pay the bank what is owed and split the leftover 50/50.

Other than that, option 2. Have the place professionally appraised and one party pays the other out 50% of what is not owed to the bank.

JMO

s

Celestial-Todd · January 25th, 2012, 04:50 PM

No "ouch" required... purely hypothetical at this point

bsercombe · January 26th, 2012, 08:50 PM

I would say half the current value and that price should be fairly negotiated. Enter into a contract that gives each party the right of first refusal at the negotiated sale price (don't forget a discount due to the lack of agents sales fees). It would then be up to you as to whether you think the price is fair or you should sell the entire property and move on (or you may have to if you aren't in a position to buy the other 50%). Estate agents will normally quote a high price to get your business - you want to agree an impartial pricing mechanism in advance and in writing for instance:

Consider your house with respect to the 3 most recent average monthly sale prices etc. To do this, look at what a lot of places similar to yours sold at in your suburb and compare that to the suburb average, then decide the percentage premium or discount to the suburb average your house should have. You can buy those $50 reports into sales for your suburb to help. Of course no mechanism will be perfect.

If you don't have a pricing mechanism in writing (subject to amendments for any improvements you make while you are joint owners) and shit hits the fan it will be a very long and nasty process. If during that process someone decides to stop paying the mortgage, the bank wins.

Read VERY carefully the definitions of joint tenants and tenants in common. A mortgage is a lot of money so don't be slap-happy about designing a comprehensive contract.

www.quicklaw.com.au/legalinformation/convey_nsw/2d_joint.asp

Also, check that when you refinance you don't trigger some sort of CGT event. I expect not if you claim the place as your primary residence and live in it, but since there is another party to the mortgage I don't know how that might complicate things. Ask your accountant.

Celestial-Todd · January 26th, 2012, 10:43 PM

All talk for the future. To fill in the gaps

We live on a battle-axe block which is currently strata-titled with another house. Our neighbour mentioned in passing last week that she wants to sell up in the next year and move into a retirement home (she's got shocking arthritis). We had joked before about buying the place and renting it to Jess' mother

Well we actually spoke to a broker about it and he said I don't have the financial means to buy the house outright myself... he suggested going 50 / 50 with the mother in law to get the loan. Our plan would be to keep the loan like that until Jess goes back to work in a couple of years (once she finishes her teaching degree). At that time, we'd take over the full burden of the loan and treat the other house like a standard investment property (with all the tax benefits)

We spoke with the m-i-l yesterday about the "buying out" process and she's said that she wouldn't want any money out of it. Just a garaunteed roof over her head till she dies (which is what we intended anyway) and is happy to pay rent to us. At least that way, she would have full run of the place and we'd have the benefits of a proper investment

I've asked around other places and they've said the best way to avoid any CGT issues is to form a family trust and purchase the house through it. That way we only have to "transfer" the shares into Jess' name instead of the m-i-l. But I know three fifths of fuck all about trusts

We're going to see an accountant in the next few weeks to discuss our options

Si · January 27th, 2012, 04:21 AM

Sounds like a huge hassle, but the rewards would be fantastic. Best of luck.

Celestial-Todd · January 27th, 2012, 04:49 AM

Yeah we've weighed up the pros and cons and it comes out pretty even really. It all comes down to these factors;

- how much do they want for the house
- how much can we afford
- what's the cost of "transferring" the house later on (or)
- what's the cost of keeping a "trust" instead

Ideally if the neighbour had waited another 2 years, we could have purchased it ourselves and not worry about the whole 50/50 split with the m-i-l. I've got big projects coming up in the next 18 months that will greatly boost savings and Jess would nearly be finished uni finally

bsercombe · January 29th, 2012, 10:09 PM

I've had a family trust for other reasons than yours- it wasn't so hard. Cost about $1,600 back then (2004) to establish and ongoing wasn't that expensive. I still know 3/5ths of fuck all about trusts. That's what accountants are for.

Winmar · February 4th, 2012, 11:40 PM

Quote:

Originally Posted by StephenSLR

I'm on the lookout for an office chair for home use surfing the net, etc.

Any recommendations and/or what to avoid?

s

Have you bought a chair yet? Officeworks can have good deals, I think, but an ergonomist who came to my work kept bagging out their chairs, so perhaps you might want to avoid them. I'm not sure if those places which sell ex government/office furniture have good prices. At least the stock should be reasonably good.

StephenSLR · February 5th, 2012, 12:01 AM

Quote:

Originally Posted by Winmar

Have you bought a chair yet?

Nah, not yet.

I've checked out Officeworks online and I wouldn't buy any of their cheapie chairs, dunno if their more expensive ones would be any good.

Anything would be better than the one I have now which is a 4 legged vinyl padded chair.

s

StephenSLR · February 9th, 2012, 05:41 PM

Adelaide, it has some lovely old buildings and funky new ones .... then there's the weird socialist buildings.

What's with that, did the S.A. govt. employ 'cold war' architects in the 60's?

s

Celestial-Todd · February 10th, 2012, 05:42 AM

Maybe has something to do with alot of Adelaide's history being tied to German immigrants?

StephenSLR · February 10th, 2012, 01:25 PM

Quote:

Originally Posted by Celestial-Todd

Maybe has something to do with alot of Adelaide's history being tied to German immigrants?

Interesting.

I noticed a lot of African immigrants there now.

I guess the next lot of buildings will look like huts, mud brick and corrugated iron.

s

Shadow298 · February 10th, 2012, 07:32 PM

Quote:

Originally Posted by StephenSLR

Interesting.

I noticed a lot of African immigrants there now.

I guess the next lot of buildings will look like huts, mud brick and corrugated iron.

s

Celestial-Todd · March 18th, 2012, 02:29 AM

Looking at installing a wardrobe in our garage to double as an office nook later this year (with the second bub on the way, I'll loose my current office)

Anyone done this before? I know the basic design for what we want and am in the process of drawing it up in Google SketchUp... mainly so I can post it around and see what sort of prices I can roughly expect to get quoted

TheDenimRager · March 18th, 2012, 08:23 AM

Quote:

Originally Posted by StephenSLR

Interesting.

I noticed a lot of African immigrants there now.

I guess the next lot of buildings will look like huts, mud brick and corrugated iron.

s

Africans built the Pyramids, 4500 years ago..

StephenSLR · March 18th, 2012, 04:03 PM

Quote:

Originally Posted by TheDenimRager

Africans built the Pyramids, 4500 years ago..

Egyptian Africans did yes, the ones in Adelaide didn't look Egyptian, they're from further south.

s

bsercombe · March 18th, 2012, 10:37 PM

Quote:

I guess the next lot of buildings will look like huts, mud brick and corrugated iron.

Nope- you're thinking of Perth. Do you like our new sheep shed?

http://www.a-r-m.com.au/projects_PerthArena.html

Seriously, if that was the winning design, can you imagine what the losers must have looked like? They are "decorating" the north side of it with what looks like randomly connected bits of PVC sewer pipe (north side is not in any of the pictures on that link but clearly visible to southbound freeway traffic).

Its hideous.

StephenSLR · March 18th, 2012, 10:50 PM

Quote:

Originally Posted by bsercombe

Nope- you're thinking of Perth. Do you like our new sheep shed?

I think they got the idea from this place in NZ

s

StephenSLR · March 27th, 2012, 04:16 PM

The big flag at Darling Harbour was flying at half mast yesterday afternoon.

Who died?

s

Celestial-Todd · March 27th, 2012, 05:20 PM

Jim Stynes maybe?

StephenSLR · March 27th, 2012, 05:36 PM

Quote:

Originally Posted by Celestial-Todd

Jim Stynes maybe?

I was thinking maybe him though isn't it flown half mast upon news of the death?

I hadn't heard of the guy before last week and I'm guessing it'd be the same with a lot of Sydney-siders. Would Sydney put on such a tribute for a non-Australian born guy playing a non-NSW football code?

I thought it was more for govt., royalty, high standing commonwealth figures, etc. moreso than celebrities.

s

StephenSLR · March 27th, 2012, 05:39 PM

Just remembered, Margaret Whitlam went not so long ago - her funeral perhaps?

s

StephenSLR · March 27th, 2012, 07:32 PM

Quote:

Originally Posted by Celestial-Todd

Jim Stynes maybe?

You could be right, they held a funeral for him in Melbourne yesterday, he's being buried in Dublin though.

Looking it up the Darling Harbour flag also flew half mast for victims of the London bombings.

s

sadisticsatyr · April 3rd, 2012, 01:50 AM

Here's my stupid question - Why are there no wireless earphones yet (not headphones)?

January 25th, 2012, 04:15 PM	#3601 (permalink)
Celestial-Todd The Incredible Bulk Join Date: Aug 2002 Location: Western Sydney Posts: 11,530	Theoretical home owning question time! Say you go 50 / 50 in a mortgage with another person. After 5 years, you want to buy out the other person and put your partner's name on it instead. Do you have to - refinance the loan and pay the other person half the original value - refinance the loan and pay the other person half the CURRENT value - refinance the loan and pay the other person back the amount they've contributed so far __________________ The Lord of the Lazy Manor

January 25th, 2012, 04:50 PM	#3603 (permalink)
Celestial-Todd The Incredible Bulk Join Date: Aug 2002 Location: Western Sydney Posts: 11,530	No "ouch" required... purely hypothetical at this point __________________ The Lord of the Lazy Manor

January 26th, 2012, 08:50 PM	#3604 (permalink)
bsercombe Swollen Member Join Date: Mar 2007 Location: Perth, WA Posts: 2,553	I would say half the current value and that price should be fairly negotiated. Enter into a contract that gives each party the right of first refusal at the negotiated sale price (don't forget a discount due to the lack of agents sales fees). It would then be up to you as to whether you think the price is fair or you should sell the entire property and move on (or you may have to if you aren't in a position to buy the other 50%). Estate agents will normally quote a high price to get your business - you want to agree an impartial pricing mechanism in advance and in writing for instance: Consider your house with respect to the 3 most recent average monthly sale prices etc. To do this, look at what a lot of places similar to yours sold at in your suburb and compare that to the suburb average, then decide the percentage premium or discount to the suburb average your house should have. You can buy those $50 reports into sales for your suburb to help. Of course no mechanism will be perfect. If you don't have a pricing mechanism in writing (subject to amendments for any improvements you make while you are joint owners) and shit hits the fan it will be a very long and nasty process. If during that process someone decides to stop paying the mortgage, the bank wins. Read VERY carefully the definitions of joint tenants and tenants in common. A mortgage is a lot of money so don't be slap-happy about designing a comprehensive contract. www.quicklaw.com.au/legalinformation/convey_nsw/2d_joint.asp Also, check that when you refinance you don't trigger some sort of CGT event. I expect not if you claim the place as your primary residence and live in it, but since there is another party to the mortgage I don't know how that might complicate things. Ask your accountant. __________________ I rag myself to my feet an take what's rightly mine... Last edited by bsercombe : January 26th, 2012 at 09:09 PM.

January 26th, 2012, 10:43 PM	#3605 (permalink)
Celestial-Todd The Incredible Bulk Join Date: Aug 2002 Location: Western Sydney Posts: 11,530	All talk for the future. To fill in the gaps We live on a battle-axe block which is currently strata-titled with another house. Our neighbour mentioned in passing last week that she wants to sell up in the next year and move into a retirement home (she's got shocking arthritis). We had joked before about buying the place and renting it to Jess' mother Well we actually spoke to a broker about it and he said I don't have the financial means to buy the house outright myself... he suggested going 50 / 50 with the mother in law to get the loan. Our plan would be to keep the loan like that until Jess goes back to work in a couple of years (once she finishes her teaching degree). At that time, we'd take over the full burden of the loan and treat the other house like a standard investment property (with all the tax benefits) We spoke with the m-i-l yesterday about the "buying out" process and she's said that she wouldn't want any money out of it. Just a garaunteed roof over her head till she dies (which is what we intended anyway) and is happy to pay rent to us. At least that way, she would have full run of the place and we'd have the benefits of a proper investment I've asked around other places and they've said the best way to avoid any CGT issues is to form a family trust and purchase the house through it. That way we only have to "transfer" the shares into Jess' name instead of the m-i-l. But I know three fifths of fuck all about trusts We're going to see an accountant in the next few weeks to discuss our options __________________ The Lord of the Lazy Manor

January 27th, 2012, 04:49 AM	#3607 (permalink)
Celestial-Todd The Incredible Bulk Join Date: Aug 2002 Location: Western Sydney Posts: 11,530	Yeah we've weighed up the pros and cons and it comes out pretty even really. It all comes down to these factors; - how much do they want for the house - how much can we afford - what's the cost of "transferring" the house later on (or) - what's the cost of keeping a "trust" instead Ideally if the neighbour had waited another 2 years, we could have purchased it ourselves and not worry about the whole 50/50 split with the m-i-l. I've got big projects coming up in the next 18 months that will greatly boost savings and Jess would nearly be finished uni finally __________________ The Lord of the Lazy Manor

January 27th, 2012, 04:21 AM	#3606 (permalink)
Si The Trickster's Bitch Join Date: Jun 2009 Location: Cairns, effin'Q Posts: 691	Sounds like a huge hassle, but the rewards would be fantastic. Best of luck.

January 29th, 2012, 10:09 PM	#3608 (permalink)
bsercombe Swollen Member Join Date: Mar 2007 Location: Perth, WA Posts: 2,553	I've had a family trust for other reasons than yours- it wasn't so hard. Cost about $1,600 back then (2004) to establish and ongoing wasn't that expensive. I still know 3/5ths of fuck all about trusts. That's what accountants are for. __________________ I rag myself to my feet an take what's rightly mine...

February 9th, 2012, 05:41 PM	#3611 (permalink)
StephenSLR Senior Member Join Date: Oct 2002 Location: Sydney, Australia Posts: 5,784	Adelaide, it has some lovely old buildings and funky new ones .... then there's the weird socialist buildings. What's with that, did the S.A. govt. employ 'cold war' architects in the 60's? s __________________ http://www.lycanthia.com http://www.ultimatemetal.com/forum/lycanthia-439/

February 10th, 2012, 05:42 AM	#3612 (permalink)
Celestial-Todd The Incredible Bulk Join Date: Aug 2002 Location: Western Sydney Posts: 11,530	Maybe has something to do with alot of Adelaide's history being tied to German immigrants? __________________ The Lord of the Lazy Manor

March 18th, 2012, 02:29 AM	#3615 (permalink)
Celestial-Todd The Incredible Bulk Join Date: Aug 2002 Location: Western Sydney Posts: 11,530	Looking at installing a wardrobe in our garage to double as an office nook later this year (with the second bub on the way, I'll loose my current office) Anyone done this before? I know the basic design for what we want and am in the process of drawing it up in Google SketchUp... mainly so I can post it around and see what sort of prices I can roughly expect to get quoted __________________ The Lord of the Lazy Manor

March 27th, 2012, 04:16 PM	#3620 (permalink)
StephenSLR Senior Member Join Date: Oct 2002 Location: Sydney, Australia Posts: 5,784	The big flag at Darling Harbour was flying at half mast yesterday afternoon. Who died? s __________________ http://www.lycanthia.com http://www.ultimatemetal.com/forum/lycanthia-439/

March 27th, 2012, 05:20 PM	#3621 (permalink)
Celestial-Todd The Incredible Bulk Join Date: Aug 2002 Location: Western Sydney Posts: 11,530	Jim Stynes maybe? __________________ The Lord of the Lazy Manor

March 27th, 2012, 05:39 PM	#3623 (permalink)
StephenSLR Senior Member Join Date: Oct 2002 Location: Sydney, Australia Posts: 5,784	Just remembered, Margaret Whitlam went not so long ago - her funeral perhaps? s __________________ http://www.lycanthia.com http://www.ultimatemetal.com/forum/lycanthia-439/

April 3rd, 2012, 01:50 AM	#3625 (permalink)
sadisticsatyr Young Apprentice Join Date: Oct 2006 Location: Campbelltown Brah Posts: 1,617	Here's my stupid question - Why are there no wireless earphones yet (not headphones)? __________________ The sleeper has awakened!