Oftentimes, one of the hardest parts of divorce is dividing property, especially if there is a house involved. There are three key factors to consider when deciding what to do with the marital home in a divorce.
- The decision to sell or keep the home: If you decide to sell the home you also need to consider who is going to live in the home while it’s being sold, who is going to make the house payment on the home while it’s being sold and whether or not you can agree on a realtor, a selling price, who’s going to get the equity in the home. In addition, divorcing couples must decide who is going to be responsible for marketing the home, making necessary repairs, and the timeline as to when the home will be listed. Couples also need to have a plan in place if the home does not sell for the amount that you had anticipated. What will be the criteria for deciding when you’re going to lower the price? What will the price be lowered to? Will the reduced selling price affect the debt and asset distribution of your other debts and assets? These are all points to consider when determining what to do with your home.
- The decision to keep the home: Here are the issues that need to be factored in. Whose name is on the mortgage? Whose name is on the deed? Is the person staying in the home capable of refinancing the home to get the other person’s name off the mortgage? If not, will the other person agree to leaving their name on the mortgage for a period of time? How much time will that be? Will that time. Be affected if the person who is keeping the home marries or cohabitates? What will happen if the person staying in the home misses the house payment? Will the moving party have their credit adversely affected if the house payment is missed? Will there need to be some kind of penalty if that happens? It’s important to note that the moving party will not be able to qualify for a new mortgage until the staying party has made the mortgage payment for at least one year. Additionally, lending institutions want to see that the decree order has been kept successfully for at least a year.
- The decision of home equity: Will the parties be able to agree on a comparative market analysis by a realtor or will they need to pay the extra money for a formal appraisal to determine value? Should equity be calculated subtracting selling costs or refinance costs if one party is actually going to keep the home?
Again, deciding what to do with the marital home can be one of the most complicated matters in a divorce situation. If this decision is left to attorneys and judges, it could cost thousands and thousands of dollars and could potentially eat up that precious equity in the home. Alternatively, at Common Ground mediation we look at all of the options and help you craft an agreement that is fair and flexible. We will help you both figure out where you can bend without breaking and in a fraction of the time at a fraction of the cost of litigating it in court.