Currently a property in NewJersey was just sold. On the deed are 2 equal owners, myself and another party. The other party is the person who the mortgage is under and there is a remaining principle on the property. My entitlement of the sale is half due to two owners on the deed. My question is, if I am legally entitled to my share of the sale of the property before any monies go to the lending institution or must the principle be paid to the bank first and then the remainder after that, is what is split between myself and the other party?
Rough Example- house sells for 160,000
Owed to bank is - 60,000
Would we split the 160,000 (roughly 80,000 each)
Or split 100,000 (remainder after paying balance)
These are rough figures. Any help would be greatly appreciated! Thank you
2 Answers from Attorneys
The mortgage is on the property, right? You say the property was "just sold." Does that mean that it is under contract, or that settlement was completed? Was there a buyer's title insurance company that conducted the settlement? Were any Realtors or Lawyers involved? Or did the Buyer just hand money over to the Sellers?
Normally, the lender must be paid in full to satisfy its lien on the property; Buyers don't want a property that has a mortgage lien. The bank gets its money, other liens must be paid, the property taxes are apportioned between seller and buyer, and the net proceeds remaining are divided between the sellers. Unless the sellers have/had an agreement that said they own unequal percentages and what those are, they would each receive 1/2 of the net proceeds.
But, as you can see, there are a lot of questions before you could get any answers.
THIS RESPONSE IS NOT LEGAL ADVICE, SINCE I DO NOT HAVE ALL OF THE INFORMATION THAT WOULD BE REQUIRED, AND I DO NOT HAVE A REPRESENTATION AGREEMENT WITH YOU.
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I agree with Miriam, as to both the traditional way of handling a closing (all liens and closing costs and fees come off the top, before the net proceeds are turned over to the Sellers). If there was some separate agreement between the Sellers on how sales proceeds (gross and net)were to be allocated, this would control the division of net proceeds. More information is needed for a better response.
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