Simple Divorce Advice

Buying and selling a home at any time is an emotional decision. When a couple buys the marital home besides determining the space requirements and the affordable price, a home has to feel a certain way. A home often holds the dreams of the future. These dreams might be shattered when a couple decides to divorce.  During a divorce, all parties usually go through the emotional upheaval, financial strains, and possibly custody strains. Add the possible realization that the dream house has to be sold.

To keep the house or not, that is the question.  In my experience as a Real Estate Divorce Specialist, the female usually wants to keep the marital home. Because the perception is that the kids need stability most women will fight to keep the house.  Statistically, women will not be able to afford that marital home and end up having to sell the home 2-3 years later. They struggle to stay in a house they wouldn’t or couldn’t buy as a single person, and often end up in foreclosure or short sale, both of which will ruin credit for a while.(short sale means the NET amount of money you will get from a sale is not enough to cover the mortgage balance. Thus the lender will be short money. This negatively affects your credit and is a nightmare of paperwork.)  Talk to a professional about this option. Every situation is different and there is no one right answer on this.

I suggest you know what you want before you fight for something that you don’t really know if you afford.  Do your homework before you blurt out that you must have the house, because your attorney will head in the direction you demand and it may be a costly mistake.

Kids are going through plenty of stress themselves and I know that uprooting them in a divorce is not always favorable. So if you are going to keep the marital house, here are some practical tips.

1. Have an inspection done prior to a settlement agreement to help determine a better value of the home. I had a client who agreed on a market value in a divorce settlement, only to find out 3 years later there was $40,000 worth of repairs (differed maintenance) that had to be done to sell the home. Since he was already out of the picture, she had to take the loss out of her proceeds. It would have been split between them if this was figured into the market value.
2. Determine who is paying for the final clean up.  All too often, couples live in a home, accumulating stuff. When the house finally is sold, the prize collection of antique airplane parts will probably need to be sold or trashed. If you are storing this stuff in the basement, then charge for it. Otherwise get rid of it as part of the settlement.  I am guessing, 5 years from now you will not want this stuff, now called junk, in your life.
3. Pack your own stuff and have that in the settlement.  I had a client who was living in the home until it sold. She had an emergency and was hospitalized two days prior to the closing. Someone had to clean out the house and her ex happily hired a dumpster. All her stuff got thrown away. Kid’s priceless artwork from 1^st grade, clothing, bedding etc, all in the dumpster.
4. If you decide to keep the house, please talk to a Realtor, lender and/or financial planner to make sure you can afford it… Would this be a home you would buy now? Is the plan to keep it until children graduate from high school?  Who knows what the real estate market will be then. This is a big gamble. Are you banking/hoping for appreciation in the next few years?  Real estate values have taken a big hit all over the country. Loans are getting harder and harder to secure.  Banking on an improved market in 5 years may be wishful thinking. No one knows. Talk to Realtors and get statistics, It may be much smarter to hold onto a home but it may not. Every market is different.

Keeping the marital home is not out of the question. Do it with the knowledge of what your expenses will be then add 10% for emergencies.

OK, but what if you are not keeping the marital home and you are going to sell it and split the proceeds or the other spouse is keeping the house and paying you out.  Make sure you can rent or buy on your own.  This is very important.  Landlords are checking credit now so make sure you are financially able to rent a home or apartment.  If you are going to buy, talk to a lender before you make decisions about who gets the house.

I think the most important take away is KNOWLEDGE IS POWER! Make decisions based on good research and lots of information.

Peggy Spiro, ABR, GRI, CRS

Certified Real Estate Divorce Specialist

SPIRO REALTY GROUP

PeggySpiro@SpiroRealtyGroup.com

            303-875-3575       Cell

303-942-7117-fax

Read the original: Your Dream Home May Be A Nightmare

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