Determining Equity in a Home

How Can I Figure Equity in Our Home to Buy My Husband Out of the House? Are Sales Expenses and Commission Taken Into Account?

The first step is to get the currently appraised value of the house by a qualified residential real estate appraiser less the mortgage and any other liens on it. That's the equity in the house.

Now if you sold the house, both of you would share the commissions and sales expenses. You'd get 1/2 of the balance, after commissions. If you want to buy it from him, it probably is a negotiation issue. While you'd try buy it at 1/2 the equity less all of the sales commissions, likely fix up costs, and taxes that have to be paid until the sale, the other side would say if you want to buy it, there is no sales commission and no fix up expense involved, so why should you get a discount?

A reasonable compromise is 1/2 the equity less 1/2 of what the normal sales commissions would be and 1/2 of what the essential fix up would be.

You'd also want to get a low appraisal and he would want a high appraisal, and as all appraisals are really just estimates (only an actual sale would give the exact price), that may be the hardest part. Some folks agree on a single appraiser, others each select one and split the difference or have the 2 select a 3rd.

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