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Updated over 5 years ago,

User Stats

160
Posts
34
Votes
Thuy Pham-Satrappe
  • Rental Property Investor
  • San Clemente, CA
34
Votes |
160
Posts

Who pays closing costs on equity split buyout?

Thuy Pham-Satrappe
  • Rental Property Investor
  • San Clemente, CA
Posted

2 brothers inherit a property with substantial equity. One wants to cash out and the other wants to fix it up to keep as a rental.

Brother A offers to buy Brother B out of his half of the equity (using fair market value determined by local realtors) and wants to factor in what the closing costs + realtor fees would be as if they were selling it to a third party.

Brother B feels closing/ realtor costs should not be factored into (subtracted from) his split because the house would not actually be sold. Only if and when the house sells in the future would he be open to paying those costs, along with a share of whatever additional future equity has been built.

Clearly this is a very subjective situation and a disconnect of what each side feels is fair and reasonable.

My question- is it fair/ reasonable for Brother A to factor in the realtor & closing fees if the house is not actually selling, but only being transferred?

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