In most divorces, the family home is the most important and valuable asset a couple owns. In addition to monetary value, however, the home often comes with sentimental value as well. Perhaps you acquired your home after getting married, or maybe you’re trying to figure out what to do with the home where you raised your children. When both money and emotions are at stake, it’s easy to make mistakes. But here’s how you can avoid them.
DO consider selling the house.
Sometimes changing your everyday scenery can help with the healing process. Also, since divorces tend to be costly, selling your house can free up cash to help you reboot your career and manage your finances and meet your budget on a single income.
DON’T opt for a buyout without strong strategic justification.
Each party bears part of the risk in a buyout, which is when one party literally attempts to “buy out” the other’s interest in the home in exchange for becoming the new, sole owner. In these arrangements, the buying spouse may incur a loss if the property depreciates in value, while the selling spouse might lose out on future appreciation. Combined with alimony, child support, and court-related fees, a buyout may create significant economic challenges.
DO make the sale ASAP, if you’re going to sell.
If the market’s not great, you may be tempted to defer the sale of the house until a specific date. However, this arrangement requires both parties to remain on the deed, which will make both parties legally responsible for making all mortgage payments. The spouse not residing in the home may also experience difficulty getting another mortgage if he or she doesn’t earn enough to make payments on both loans. A quick sale is usually more practical and economic.
DON’T live in the home with your former spouse.
It’s simple, inexpensive, and 99.9% likely to drive you both crazy. Just trust us: it’s not worth it.
DO consider a short sale.
If the market is especially rough, a short sale—agreement with the lender to sell the house at a loss—is a viable option. The Making Home Affordable Program MHA, offers monetary incentives for completing short sales, as well as up to $10,000 in relocation assistance.
DON’T foreclose unless absolutely necessary.
Foreclosure tanks your credit rating and will haunt your score for seven years. No matter how dire your financial situation might be, strive to avoid foreclosure at all costs.
DO individual appraisals.
If you’re not satisfied with the appraisal for your home, consider doing an individual appraisal and encourage your spouse to also undergo an individual appraisal. This could help limit conflict in the divorce and ensure a fair valuation for future proceedings.
For advice on how to handle your Maryland divorce, contact our experienced legal team at DiPietro Family Law Group at (888) 530-4374.