In many marriages, the single most valuable asset in joint ownership is the home. So, it is very understandable how the home becomes of the most disputed pieces of property in a divorce settlement. Should it be sold? Will the parent gaining primary custody of the children automatically be awarded ownership? What will the other spouse receive in exchange for the home? These are all questions, and more, that we hope to answer for you today.
Before getting into an ugly dispute over the home, you and your ex need to decide if the home is really worth keeping. Do you want to keep the home simply for the sake of “sticking” it to your ex or is there a viable reason for the home to be retained.
Reasons to Keep the Home
- Rooted in the Community – one spouse may be very ingrained in the local community. If the family has been living in the area for some time, it is perfectly understandable that one o both individuals would like to stay in the area. Picking up everything, finding new friends, etc… are things that are not appealing to anyone at any age.
- Emotionally Attached – is this the best reason to want to hold onto a home? Absolutely not, but it is the reason many people do fight over the home. Another scenario could be that the home has been in the family of one of the spouse’s and that spouse would like to retain ownership for obvious reasons.
- The Children – The one piece of advice we often see is to try to minimize change to the children in order to give them some stability during the divorce. Forcing them to move, which could lead to leaving their friends and enrolling in a new school, is about as traumatic as it gets for a teenager. For this reason, the parents may need to come to an agreement to continue some stability in their children’s lives while the divorce is being settled.
Once the decision has been made to hold onto the family home, you need to look at your finances to see if keeping the home is actually financially viable. Remember, even if some type of alimony or child support is awarded, the income level in the home will likely see a dramatic reduction. Can you honestly continue to pay the mortgage and other household bills for the family home?
If you are still adamant about keeping the home, try to work out the details of the property division with your spouse beforehand. If you leave it up to a judge, both parties may walk away upset and disappointed in the final decision. But, once this decision is made, it is binding and both parties will have to honor it.
Both Parties Want the Home
This is a worst-case scenario and can get very ugly. Neither party wants to give in and both are willing to fight to keep the home. As briefly mentioned above, the home will end up as part of the settlement and the judge will have the final decision. Likely outcomes of the case are:
- Home is awarded outright to one party with the other party receiving compensation for his or her share of the home
- Judge may order the home to be sold (in this case, a restraining order may be issues to prevent either party from trying to sell the home on his or her own)
Selling the Home
For some couples, the best course of action to take is to sell the home. This enables the couple to liquidate the asset, pay off any remaining debt on the home, and then split the proceeds of the sale. In addition to eliminating one of the major issues in most divorces, it allows each party to walk away from the divorce with additional cash flow.
Once the decision to sell has been made, you will need to:
1. Hire a Real Estate Agent
2. Settle on Listing Price
3. Show the Home
4. Evaluate and Accept an Offer
5. Divide Funds
Hiring a Real Estate Agent
It is not uncommon to see houses “for sale by owner,” but going through the daily stresses of selling a home are hardly needed in the middle of a divorce. If possible, try to work with an agent you have worked with before as a couple, as both of you know you can already trust and depend on this person. If you do not currently have an agent, it may be best to let “neutral” parties agree on the agent so this does not become another problem on the table in the divorce negotiations.
Settle on Listing Price
Your agent should have a very good feel for the correct asking price, but it would also be prudent to hire a professional to come and evaluate the home to establish the actual value of the home. In all likelihood, any party interested in buying the home will hire an appraiser before settling on a final price, so you should do the same. If the asking price is too far above the value this individual gives to his or her client, it could be a roadblock in the selling process.
Also, keep in mind when looking at selling prices in the area, you need to compensate for features your home does or does not currently have. For instance, if your neighbor’s home just sold for $300,000 but features a pool and a large deck (neither of which you have), it is unlikely you would get the same price for your home.
Showing the Home
Have you ever heard the term “curb appeal?” What about “staging a home” for sale? If the home has some minor repairs that are significantly taking away for the appeal of the home, you will need to address them before putting the home up for sale.
In addition, having your home filled with too many personal items can add clutter and take away from the perceived value of the home. In cases where the home is not needed as a dwelling during the selling process, the home can be staged for selling. There are many professional services available as well as information on the Internet that can help you with this.
Evaluating and Accepting an Offer
There are numerous times throughout the divorce process where you will need to put differences aside and work together, and this is one of them. The two of you will need to schedule appointments to sit down and evaluate any offers that come in. If the house has multiple offers, this process can go rather quickly. However, if the home is getting limited showings and offers are coming in that are not at your asking price, but close, you may need to make some concessions in order to get the home sold before the divorce is finalized.
This is not and should not be a very difficult process. The one area of concern would be if there is any joint debt in the marriage. As a couple, you may decide to pay off any existing joint debt before distributing any profits from the sale of the home.
*In some cases, one spouse will continue to pay household costs until the sale of the home is final. If this is the case, that spouse will need to be reimbursed for his or her expenses prior to the distribution of funds for any reason.
If you need legal help with your divorce then please fill out the Evaluation Form.