At some point during a divorce, questions arise regarding separation of joint assets, like a house or other real estate. Fortunately, there are workable solutions with a little cooperation from each spouse.
The following are some of the most common real estate questions raised by clients facing a divorce:
Do I Really Need to Sell the House? It depends. If joint ownership between you and your ex-spouse does not make sense, and neither spouse wants to keep the house or can afford the mortgage alone, then selling is the logical choice. Proceeds from the real estate sale can be divided between divorcing spouses without the need to wait for the divorce to be finalized.
Should I Consider Buying Out My Spouse’s Interest in our Real Estate? If you are the custodial parent for children, and you want the children to continue living in the same home, consider buying your former spouse’s interest. This is also a good option if you do not want to sell the house for any reason. Awarding the home to one spouse can be factored into a split of the remainder of the community property estate.
Should I Advertise my Real Estate as a Divorce Sale? Advertising a real estate transaction as part of a divorce sale provides no advantage to the seller. To potential buyers, the advertising may appear as desperation and reduce your ability to negotiate. Advertise, just be cautious of using “divorce sale.”
The Mortgage - What Should I Do? Mortgages are tricky and removing an ex-spouse’s name is not simple. Additionally, if you remain on a mortgage from a prior marriage, applying for a loan on a new home may cause you unexpected difficulties.
If you decide to keep the house—refinance and secure a new mortgage loan! If both spouses remain on the mortgage, your ex-spouse’s default can ruin your credit. There are possible recourses if this happens, including the possibility of forcing your ex-spouse into a foreclosure like any other lender, allowing you to return and take over payments on the mortgage to protect your interests. Upon agreement, the spouse moving out can stay on the mortgage for a short time, while the spouse staying in the home applies for a new home loan.
Should I Purchase New Real Estate During a Divorce? We do not recommend purchasing new real estate during a pending divorce proceeding. If you do, your ex-spouse can potentially claim an interest in the new real estate property.
Have other real estate and divorce questions? If you have other questions related to real estate and divorce, please feel free to contact us.