Having worked with a lot of divorcees, I know that one of the first questions is what to do with your home during a divorce. And you can’t really decide on what to do with your property until you know how much it’s worth. The information below will help you determine how much your property is worth. You just can’t make a good financial decision without that information.
Though there are several ways to split up your property in divorce, I find that they fall generally into three different categories. You will likely do one, or a combination of these things depending on how many properties you own. Again, I’m not advocating any one of these solutions over the other. Nor am I telling you what you should do with your home. I’m just explaining them to help you figure out if it’s the right choice for you.
1. Selling the Home
Since your household is now becoming two, many people decide it is time to move on from their marital home and sell. The reasons are many. The two of you may not be able to afford the home anymore. Neither of you may want the other to live there. Or both of you may want to start a new life somewhere else.
2. Retaining Ownership of the Home
Many divorcees opt to remain in their marital homestead instead of selling it. Again, the reasons are many; be it to provide stability for your children, or to avoid the hassles of moving, and any number of others.
But the process isn’t as easy as simply signing over your property rights to the other party. In fact, in some ways it can be more complicated than selling a home. There are many factors you should consider before you go down this road.
3. Foreclosure and Short Sale
My advice to most divorcing homeowners is to avoid a short sale or a foreclosure at all costs. If you can bring enough cash to cover the negative equity in your home, or you can draw it out of another asset like a 401K, I always advise that you do that first. If a home has negative equity or you are behind on payments, it becomes your greatest liability moving forward and can have effects on your ability to move on from your divorce for years to come. However, sometimes the best decision about what to do with your home is the least, worst option.
This is only a broad flyover for what to do with your home during a divorce. Therefore, it’s important to consult with a knowledgeable divorce team (especially a realtor) immediately to make sure you better understand these processes and have someone to navigate you through each process so that you both make the best decision for your ending relationship.