can i be forced to sell at a loss?

Question

Here's the situation:
wife and i bought a house. A family member invested half the money with us. We live in the house, pay the mortgage.

Anyway, now the family member is trying to force us to sell the house because she needs the money back. We bought only 3 years ago and would lose money if sold right now at market value because of the realtor/selling fees.

Question: if we agree to sell, can we continually refuse offers that would sell at a loss, or can we be legally forced to sell despite an offer at a loss?

Replies:

The contract we have does NOT guarantee her entire investment back. It basically says we will hold the property 15 years, then sell. It gives us right of first purchase, but also says 'if the parties choose to sell', which i take as meaning we would both have to want to sell. We want to salvage the relationship, but she might be going off the deep end.

Also, we have no problems selling the house, unless we must incur a loss to do so. Hence, are you saying that if we continually get offers that require us to take a loss we can continually reject them? She doesn't mind losing the money because she wants the cash and it is a substantial amount. I don't mind getting out as long as i don't take a loss. Breaking even is fine

Answer 1

If one owner wants out of the deal, they can petition a court to force the others to buy them out a the current market value or sell and split the proceeds. In a court ordered sale, if you refuse an offer the court believes is fair, the court can accept the offer anyway.

J P: Joint ownership is a de facto partnership. Partners ALWAYS have the right to get out of the partnership.

Answer 2

That would really depend upon the contract you have with the family member.

If it's a simple contract that doesn't guarantee her all her money back, then you can let her know that selling at a loss would also be a loss for her. Most people aren't willing to do that unless they need the money for some sort of emergency, or they see it as cutting future losses.

If the contract guarantees her money back but doesn't have a specified date, you can probably fight it, but you have to consider the cost of your relationship with this person in the future. Is the money worth it to you?

Consider trying to sell without an agent, which will save you a few percent on the sale, and try to accept real offers that will at least let you break even. List the house at a price just above what will allow you to break even so that you can accept slightly lower offers and have some room to negotiate.

You can refuse as many offers as you want, but remember, if she's "50% owner" she has some legal right to also vote on which offers to accept and which to reject. If you've been in the house for 3 years, how much have you paid into it versus the initial investment? If you each invested $10000 at the start and you've been paying a mortgage for 3 years without any further investment from her, you have more at stake in the house than she does. Recognize that as a percentage of ownership and sit down and talk with her about everything. Maybe you and your spouse each get 1.5 votes to her 1 vote or something like that.

Finding an equitible way to make everyone happy won't be easy, but it is possible.

Answer 3

Well maybe you can sell but make a deal "in writing" that if and when the sale closes no matter what the sales price is that you'll receive a Minimum of lets use $ 100k. However if the home sells and you both splitting equally and if say the house sells and after expenses it sell for say $ 205 you both in theory should get $ 102,500.00

By the way, Realtor fees aren't the problem its what you or your agent thinks you should get out of the sale. Maybe you and your agent should try a little harder to get a bigger price.