Real Estate & Divorce
The marital home is often one of the biggest “issues” for people that are getting divorced. Who’s going to keep it, or are you going to sell it, is often an area of disagreement between the spouses. And sometimes, even if they agree on what they’d “like” to do, they may not be financially capable of making it happen.
Here are just some of the things to consider:
The title to a house and the mortgage are completely different. Just because a spouse is on the title, doesn’t mean they are on the mortgage…and vice versa. The title refers to ownership of the house and the mortgage is a debt that’s owed to the bank. Whoever is on that mortgage is held responsible for paying that back to the bank…even if you no longer live there.
Chances are, you’re not going to be able to purchase a new home until your name is removed from the mortgage on your current house (if your spouse is buying you out)…otherwise it will still be considered in your debt-to-income ratio.
If you are planning on using spousal maintenance (alimony) and/or child support as part of your “income” to qualify for a mortgage (either for a new house or to refinance your current house, so you can buy your spouse out)…you have to have been receiving them for six months prior to applying for a mortgage, and they usually have to be scheduled to continue for at least three years from the date the mortgage is approved. This could mean the difference between being able to go right from a marital home into a new home, or even being able to stay in your current home - depending on your financial circumstances.
If both spouses are on the title to the house, and you’re going to sell it…both people will have to sign ALL of the listing paperwork, any offers you want to accept, and all other documentation requiring signatures for the sale of the house. That includes things like documents to lower the price of a house…so if you expect your spouse to be difficult, discuss with your attorney the option of including verbiage in your agreement outlining all of the specifics and what must be agreed to ahead of time.
In order to remove someone from the title of a house…there is a form called a “Quit Claim Deed” that you’ll need an attorney to help you file.
Choose a Realtor that has experience working with clients going through a divorce. It’s a different situation that requires knowledge, patience, and the ability to work with two different clients on the same house, simultaneously.
If one person wants to buy the other spouse out, you will probably need to get either a CMA (Comparative Market Analysis) from a Realtor or pay for an appraisal from a licensed appraiser. If the parties can’t agree on a Realtor, sometimes you will need to get several CMAs and take the average.