I currently own a home with my common law partner. We have lived there for 2 years and are now splitting up. Both our names are on the house, and we have paid 50/50 for everything from down payment / renovations / and mortgage payments. He think's that he would like to buy me out, and I am just unsure about how much I am entitled to. How do you calculate this number? I have received a market analysis from a real estate agent to figure out how much our house in now worth, but where do I go from here?
I realize that hindsight isn't much help, but this is the sort of thing that is helpful to have agreed at the time of buying, not the time of splitting up. When I did this (with friends) the lawyer who handled the purchase was very emphatic that we should draw up an agreement as to how the house should be divided.
Moving on to an actual practical solution, the only real way to do this is to find a split that you are both happy with. From what you say a straight 50/50 division sounds appropriate, but it's going to depend on you and your partner. If you can't agree then lawyers will have to be involved, which you would be better off avoiding.
If he wants to buy you out, and its a 50/50 split, and you've been splitting the mortgage payments evenly, you should end up with cash to the tune of half of the difference between the house value and the mortgage (assuming the house value is greater than the mortgage). You are going to need a lawyer to do the ownership transfer, so get them to work out the details. As a final thought, if you no longer own any part of the house, make absolutely sure your name is taken off the mortgage, no matter who tells you it would be simpler to leave it on.
My formula would be
How much would you pay to buy the house now if there was no baggage attached? = a
The Greater of the Market value or (a) above = b
How much is still owed on the house? = c
How badly does he want to keep it on a scale of 1-10? = d
((b - c) / 2)(1 + d/20) = The amount I would ask for.
(a - c) / 2 = The lowest I would accept.
If the issue remains unresolved in respect to the house value you may go to the MPAC website where all of the home values in your neighborhood will be listed.