Legal Question in Real Estate Law in Massachusetts

What is ownership calculated on my home?
I own 20% of my home and wish to buy the remaining 80% from my brother. The deed shows 80/20 ownership. My brother said he will sell me the home, but my 20% is based on the gain, not on the value. (Example: Sale price - Mortgage amt = Gain). Therefore the asking price will be lower by my 20% of the gain.

I say I should take my 20% off the value and use that to lower his asking price.

Who is correct?

Asked on 9/23/08, 5:14 pm

2 Answers from Attorneys

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Re: What is ownership calculated on my home?

unless the deed says your 20% ownership is only as to future gain, then you own 20% of the property and he owns 80%. If there is a separate written agreement that says you only get future appreciation, then he may have a point as well. However, absent something in writing to the contrary if you own 20% of the house, then you own 20% of the net value of the home (House vlaue less Mortgage). If the property is worth $250,000, then you own $50,000 and he owns $200,000.

If there is a mortgage, you reduce your equities accordingly.

Likewise, it is usual to reduce the value by 4%-5% to reflect the brokerage that is normally paid in a sale. So on a $250,000 home, you would reduce the value to $240,000 and your interest would be 20% or $48,000 and your brother's would be $192,000 or 80%, this assumes no mortgage.

If you need further assistance please feel free to contact me.

Answered on 9/23/08, 5:22 pm

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