DIVORCE AND YOUR HOME


As a real estate agent, I understand the importance of a house. More than simply shelter, a house represents a significant investment of time and money, as well as the stage for thousands of memories. Your house is your home!

Unfortunately, a divorce can disassemble the home you worked so hard to create. In addition to splitting a couple and possibly a family, a divorce can split a home and shatter the stage upon which your memories played out. Given this, dealing with the house can be emotionally draining. Indeed, people become emotionally attached to their homes and this emotion seems even stronger when a divorce is the reason a person must sell or choose to keep their home.

You likely have many more questions than the typical home buyer or seller. You might be asking: Who, if anyone, will stay in the house? Who will move out? Should we sell the house? Are there any steps we must take, unique to our circumstances?

You need answers in the form of straightforward advice. The report below, “Divorce and Your House: What You Need to Know” will provide you with much needed information to help you make the right decisions, in what might be a very difficult time.

Divorce and Your House: What You Need To Know

What You Need to Know About Selling Your House Due to Divorce

Divorce can be a complicated situation, muddied by many emotional and financial concerns. One of the most troublesome issues is often related to the communal home, namely what to do with it.

In the midst of such a complicated situation you need straight-forward and specific answers and advice. Once you are informed as to how your impending divorce will impact your home, mortgage, and taxes, proactive decisions can be made. Information from an objective third party can help ensure the decisions you make are not fuelled by emotion.

Likely the first important decision to make concerning the home is whether or not you want to continue residing in it. Are you more comfortable remaining in a familiar place, or will the memories attached to the home create an unpleasant environment? Do you want the minimal hassle of staying put, or do you want a fresh start?

You must carefully consider your answer to these questions, keeping in mind your financial limitations. Ask yourself if you can bear the full responsibility of the home, or if it is wiser to sell and buy a smaller, more affordable home. Research your options: is refinancing possible? If you choose to buy another home, what can you find within your price range?

This report serves to encourage you to ask the right questions. By asking the right questions you will be able to make informed decisions that will ultimately be in your best interest.

YOU HAVE 4 BASIC OPTIONS

  1. Sell the communal home and divvy up the proceeds
  2. Buy out your spouse so as to own the whole home
  3. Sell your half to your spouse
  4. Keep joint ownership

Before deciding which option you prefer, take some time to fully understand the implications of each of the four options.

  1. Sell the Home and Divvy up the Proceeds

    If you choose this option, it is best to maximize the home’s selling price to provide each of you with as large a fund for a new home as possible. Many home owners make the mistake of failing to understand how much money each will walk away from the sale with. Be certain that you are fully aware of what your net proceeds will be. Meaning, the amount you will have in your pocket after necessary expenses and the division of the proceeds. Remember that the proceeds may not be divided in half. Instead, the division will depend on the result of your divorce settlement and the legislative property laws where you live.

  2. Buy out Your Spouse

    If you decide on this housing option, remember that the financial responsibility for this home will likely be yours alone. Even if you think you can manage the financial weight, if your two incomes combined were used to secure a loan, you may have trouble refinancing the property with only your income. Be sure to investigate the feasibility of this option before committing to it.

  3. Sell your half to your spouse

    As the person leaving the communal home, you have the opportunity to own a new home. However, understand that if the communal home is not refinanced, a lender with typically consider you (and your spouse) responsible for the loan together. As a result, you might have difficulty acquiring a new loan for your fresh start, even though you are no longer an owner of the formerly communal home.

  4. Keeping Joint Ownership

    Some couples in the midst of a divorce may retain joint ownership of a property, even though only one person still resides within the home. Even though this situation may be temporary, it is important to be aware of the issues that will be of concern in the future. Maintaining this kind of ownership has no immediate affect on the financial situation of both parties, but that is no reason not to research the tax considerations which may change between the time you are divorced and the home is sold.

WHEN YOU HAVE DETERMINED THAT YOU WANT TO SELL

If you and your former spouse wish to sell the home, it is advisable that you work with a realtor to ensure you make the most money possible on the sale of the home. Though it may be uncomfortable, it is important that you are both present when the listing contract is created. It is imperative that you both understand the content of the contract and provide your signature. Ideally, you should both have input during the negotiation process as well.

Buying Your New Home

Keep in mind the amount of the proceeds from the sale of your previous home, or the amount you received in the form of a buy out from your spouse. This figure will help determine what price range is suitable for your next property. Reconsider your housing needs and look for a home that suits your new list of needs. You may wish to contact an agent who can help you match your criteria with homes available for sale.

I would be happy to help you devise a plan of action during what might be a sensitive time for you. I offer you integrity, honesty, and hard work. Please feel free to contact me.


Michael Piscopo 416-629-1797