Getting a Divorce
2014/02/06

"You May Lose Thousands on Your Home"

As you no doubt already know, divorce is an extremely tough situation that opens up both emotional and financial issues to be solved. In all the turmoil, one of the most important decisions you need to make is what to do about the house.

Deciding what to do about the house really has 4 basic options, and is somewhat dependent on your prenuptial agreement. If you didn't sign a prenuptial agreement, then you are married in community of property. Essentially this means that everything that you and your ex-spouse have is shared and needs to either be divided equally or a different option negotiated.

Your options are as follows:

Sell the home

Selling your home in this situation should have only 1 main goal - to sell for the maximum price possible. While it is definitely possible to privately sell your house, even in these circumstances, research shows that it is definitely helpful to have an independent, unemotional, third party to assist you. From your side, you want the emotional struggle over quickly. A real estate agent has no emotional ties to the property - they want to sell your home fast, and for the most money possible!

Buy out your ex

Should you choose to keep the house for yourself, you will have to take a good look at your new financial situation to ensure that you can afford the monthly financial obligations. Remember that you will now have only one salary, and you may be forced to pay maintenance out of that income before being able to settle other monthly debts.

Have your ex buy you out

Should your ex want to keep the home, you would have the opportunity to start again with cash in your pocket. This is sometimes a great position, but be warned: the liability for a joint mortgage is still shared by you until the home is re-financed 100% under your ex's name - i.e. you still share the risk on your old home as long as you are a co-signatory on the bond. This liability may make it difficult for you to qualify for another loan, even though you do not have legal ownership of the old estate.

Retain joint ownership

In some cases, the couple may choose to put off large financial decisions such as selling the home until a later date. A couple may choose to rent out the house or allow one partner to live there while the other lives elsewhere. This choice lessens your immediate concerns, but ensure that there is a clear understanding of who is responsible for what in the home - like home maintenance, garden workers, broken lights, burst geysers, etc. br>
If you decide to sell the home, it will be important (although sometimes extremely difficult) to work closely with you ex in order to maximize your return. This process should be handled by a neutral professional, and both of you should be present when a mandate is signed with an estate agent. Both of you should ensure that you understand the contract, and both need to be part of the negotiations - your estate agent will provide helpful third party, independent advice.

Purchasing a new home should be done cautiously. Keep in mind that you are still in an emotional state and request the advice of an independent consultant or real estate agent. Also, ensure that the divorce agreement is finalized before you buy a new home or you may simply be adding to the divorce negotiations.

Realty King IPG

RTS 02/14