Divorced Home Guide – Chapter 6

Divorced Home Guide – Chapter 6 2017-12-09T11:29:51+00:00

What to Know About Selling With a Divorced Couple

When you get the listing with a divorced couple and understand their situation, you know that chances are it won’t be the smoothest process.

Therefore, you need to understand several aspects connected with selling the divorced home, in order to move the things toward the finish line. Everyone would like to profit the maximum amount from the deal and keep it civil. Through the right approach, you can make this happen.

Splitting the Profits with the Spouses

The most challenging aspect of a divorce is splitting the combined assets. It is important that the couple understand and has a solid agreement on what they will do with the profits.

One of the parties may consider staying in the house. Because of the unpleasant memories associated with the home, most times neither party would like to stay in the house. Under some conditions, the court might also decide who has to occupy the house.

The first goal of listing a divorced home is to complete the deal as quickly as possible, hoping for a reasonable outcome. A sale getting delayed could be your worst case scenario.

If one of the parties wants to buy out the other, this is easy for you to facilitate, but you need to make them completely aware of all the pitfalls they could encounter.

Since the salaries will drop to one from two, then the party will have to bear the mortgage payment yourself. If the original mortgage is in both of their names, then the toughest job comes with refinancing the property, which would mean evaluating their credit history, job history and debt to income ratio.

There are some potential tax consequences which they will need to consider. The tax obligations and deductions could have changed from the time of divorce to the final disposing of the property. In some states, the spouse can obtain a second mortgage without your consent, something you and the couple need to address cautiously.

Buyout During or Before Sale

If you need to facilitate a buyout, sit with the couple and  analyze their mortgage documents to see how much they need to pay off.

If one spouse has the history of claims, then they may have to pay a penalty. As the insurance is part of the mortgage PTI, any change in the insurance will mean a change in the payment.

To decide on this, you need to gather the credit and income information. Then give them a CMA analysis of the property. Deciding to buy the equity is good and bad for both the spouses. While the owner choosing to retain the property will have the burdens of a mortgage, they can benefit if the house value increases.

The other partner getting out of the title of the property escapes the burden of mortgages and gets his or her share.

What if divorce is not final?

A divorce decree or marital settlement will be about issues connected to a divorce that is not final.

The decree might say that irrespective of the status of their marriage, they both remain the co-owners of the property, besides stating how they will need to deal with the property and divide the proceeds of the home sale amongst themselves.

The first conditions should be who will continue to occupy the home until the sale. Usually, when there are children, the parent with custody will stay in the property. If one side is in good terms with your spouse, you can choose to stay there till the sale of the property.

The decree should also talk about the ongoing expenses incurred in the maintenance of the home, including the necessary repairs. If both of them share those costs, it will make the job easier.

Otherwise, an appropriate way of dealing with this issue needs to be brought forth. This can turn out to be a very important issue, if the property does not pass through the inspection.

If the divorce is final

There are some ways to deal with the home if the divorce is final. If the value of the home is lower than the current mortgage balance, they both can decide on waiting to sell, until the value goes up. This has its own advantages and disadvantages. Even after the divorce, they both will retain the title in the home.

Those divorcees facing a serious financial pitfall and have been forced into this situation, sometimes choose to retain the joint ownership works. If the financial implications are really that severe, then they both can choose to live in the same house and lead separate lives. Since this option carries several negatives, it should be exercised only if there are no other viable choices.

It also needs to be decided as to who will pay the mortgage, costs of maintenance and other taxes, if the dual ownership has to continue. When the property will be sold must be specified. If one should disagree to abide by the terms of the agreement, how it will be dealt with should also be mentioned.

In the end, there are also some issues that most divorcees do not anticipate. An ex-spouse living in the house might allow someone else to move in. The property sale might not happen within the stipulated time. The one occupying the house might act in a way that harms the sale.

Also, one spouse might remarry and would force the sale of the property before the time is ripe for a profitable sale. Such factors must also be accounted for while deciding to deal with a property after divorce.

Chapter 5