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Does cost of sale have to be accounted for in the standard way?

  • solvethis84
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27 Jul 20 - 27 Jul 20 #513470 by solvethis84
Topic started by solvethis84
I'm self representing myself in a case that is approaching final hearing. Throughout the case ex's position has been to buy me out of my stake in the FMH. We just can't agree the figure.

I've read that usually around 3% of the property should be deducted from the equity for cost of sale. I've read that even if ex buys me out (therefore no estate agents involved) we should still deduct it, to help her in the future in case it sells on the open market.

The problem is our case is quite borderline on whether we can both be rehoused, so it seems unreasonable if this kind of deduction in my potential lump sum amount could be a barrier in achieving our needs. Surely our needs now (to both be rehoused) are more important than her be paid up front for potentially selling the house in years to come?

At 3% - approximately 9,000 is taken from our equity. Which in any case seems high for selling cost

At 1-2% - 3,000 -6,000 probably seems more typical for high street estate agents.

With Purple Bricks and other less traditional agents, fees could be around 1,000.[/li]


So my question is, for the Final Hearing could I argue against the cost of sales? If I did need to concede it, could I argue that the standard 3% is excessive when our needs could be met with a more modest estimate? Could I submit evidence such as quotes from estate agents as to how much it would cost to sell?
Last edit: 27 Jul 20 by solvethis84.

  • .Charles
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28 Jul 20 #513481 by .Charles
Reply from .Charles
Here's an interesting article www.1kbw.co.uk/views/costs-of-sale-the-mystical-3/

Charles

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28 Jul 20 #513482 by solvethis84
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Thank you Charles, the article is exceptionally helpful.

So in relation to Peter Newman's concluding line 'this means that in any case where using a 3% costs of sale figure is unrealistic or disadvantageous, we should always be prepared to provide evidence (eg: local agents’ commission rates) that the figure should be lower" I will provide such evidence in the bundle. I just need to make the Applicant aware it should be in the index?

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28 Jul 20 #513484 by WYSPECIAL
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Has it even been brought up?

If the plan is for it not to be sold and for her to remain there why not just agree a value and split the equity 50:50?

We don't know the details of your case but 50:50 is always a good starting point to negotiations.

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29 Jul 20 #513488 by solvethis84
Reply from solvethis84
Wyspecial - that is a good question.

At the FDR they did start with a 3% deduction for cost of sale. It was pretty much the only thing they did concede at the FDR, but they wouldn't budge on the equity split to get close to 50/50. I have had separate advice around this, which I'm happy with.

For the Final Hearing I'm anticipating they will go back to their original position and deduct 3%. Although I won't receive their schedule of assets for another week or so to confirm this.

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