Divorces are really hard on everyone. It’s also hard on your real estate. We want you to know up front that we’re not real estate attorneys or divorce attorneys. But we are schooled in what may happen to your home if a parting of ways occurs.
You may be asking yourself a series of questions. Do you have to sell your house? How to keep your house in a divorce? Who gets to stay in the house during a divorce? How to co-own a house after divorce. What happens to your home when you get a divorce is dependent on a lot of factors.
So, should you really sell your house? The first thing to think about is, does it make sense to hold the property together with your ex? The second thing to think about is can you afford the mortgage and the maintenance of the house? Thirdly is how long would you live in the house if you were to keep it? Next is, what you would be willing to give up to keep the house? So you have to explore your needs versus your wants. Think about the realities of the financial picture whenever you’re considering.
Don’t forget about taxes
Another thing to consider is if you are you prepared for any tax consequences of keeping the house. Consider the fact that once you get a divorce you’re going to have new tax liabilities. You’ll no longer be filing jointly so make sure to chat that over with your tax advisor. Your real estate attorney and your divorce attorney should be involved in that as well.
After exploring the answers to those questions, the decision really becomes can you afford the house on your own? If the answer to that question is no for both of you, then you’re going to have to sell. Now the proceeds can be split and divided evenly. Just consider the fact that you’re going to have real estate commissions to pay for. As well, repair costs and the mortgage payoff amount.
If you can afford it, should you buy out your spouse? This can play a crucial part for those with children. You want your children to be able to continue living at what has become their family home. The kids are going to be the most important factor in this case. If you’re in a position to buy out or take over the mortgage, great! If you can avoid selling, especially if the market is not favorable, better to not. For more information about this, it would be very wise to contact a family attorney to review your options and how this would work for you.
Market as a couple
The next question is if you choose to sell your house, should you advertise? Most people think, yeah, of course I should advertise to get it sold faster. Yes, but the circumstances of selling should be kept somewhat private. If a buyer knows that you’re getting a divorce, they may want you to drop your price. You don’t want them thinking you’re in a desperate position and need to get out from underneath the home. So what you want to do is make it look, at least for appearances, like you both still live there. It offers no subtle clues to a would-be buyer looking to purchase your home that there’s trouble in paradise. Plus, buyers usually want to imagine themselves in a home. They want their own happy ending.
The Deferred Sell
The next question is can you do a deferred sell now? This is how you keep your house in a divorce. A deferred sell is when the couple negotiates together to allow one of them to stay in the house. This is typically the parent with custody of the kids. Parents want what’s best for the kids even if they can’t get along.
Now, the spouse that’s moving out may still be liable for the monthly mortgage. This can become problematic if the person moving out decides they want to buy a home themselves. If they’re still on one mortgage, they may not be able to buy another. Even if their primary residence is their new home. But you could also work out a deal together. Maybe you stay in the home and they pay part of the mortgage in lieu of child support. This could be for a specified timeframe or able to be renegotiated in six months. It’s up to you two. Be aware there are pros and cons to each decision, review your options carefully with a family attorney.
So, what actually happens with the mortgage?
It’s actually pretty easy to get off of a deed with a county. All one spouse would have to do is say hey, I’m transferring all my ownership rights to spouse A. This would make spouse A have all the ownership rights and take spouse B off the title of that property. But that still leaves the question of what happens to the mortgage.
This is where it can get a little bit tricky. It depends on when you bought the house and what the mortgage rate is. You may have to consider refinancing the mortgage just to get one spouse off the mortgage. If you do refinance and both spouses can now separate off the mortgage, that’s your goal. Now, what happens if the spouse that wants to keep the house can’t qualify for the mortgage? That’s a very valid question. And it’s about negotiation. Whoever is moving out can give you a little leeway here. They can still be on the mortgage for awhile in order for you to get qualified.
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Should you buy a new house? What happens if the spouse that goes and buys a property is doing so before the divorce proceedings have finalized? When you’re thinking about buying a new house, make sure that you have a written agreement in place about it. The point is if you’re not technically divorced, your spouse could claim interest in your new place. Beware before you make that offer…Either rent a place until everything is final or write something up with an attorney. As long as it’s in writing that the new place is post separation, there can be no question about it. No attorney can argue otherwise.
Let’s talk about FLARPLE! It’s simply an acronym for family law attorney, real estate property lien. A FLARPLE is put in place by a spouse that may not have the money on hand to cover the cost of the attorney. They’re allowing that attorney to put a lien against the property, even if the other spouse did not agree. It can present some issues to both parties moving forward. For more information about how FLARPLE would work and how it impacts you in the future, you’ll want to consult a family law attorney.
You might be wondering if you should you include your kids in the decision-making process. What happens to your home when getting a divorce will affect the kids quite a bit. How to keep your house in a divorce is something you should discuss all together.
That is, if the kids are old enough to understand. If your kids are in kindergarten or above, let them partake. If they’re going to have to be moving from their family home shouldn’t they know? Going to a new school, a new city or a new state… It’s a big deal. Kids are pretty resilient so long as they know what’s coming. They may not like it initially because a lot of kids don’t like change. Because they don’t know what change is like. But sharing and talking it through with them is important. You want to maintain civility with your spouse during these conversations.
Depending on the reason for divorce, civility can be tough, but you need to try. Make sure that you’re at least respectful and considerate of each other. Remember the fact that we are all people and all effected by different things. Be kind to each other, especially for the sake of the kids. And if you don’t have kids, be kind to each other just for the sake of getting through the process. It’s never easy, no matter how good of friends you were. Just remember, once it’s done. It’s done.
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