Facing a Divorce? Here's What to Do With Your Home

Divorce - What to do with your home

While most of us prefer not to think of it, divorce is a reality that many couples end up having to face.

We recognize that the process of separating can be difficult even under the best of circumstances – and that it can be made even more fraught when a married couple owns a home together.

In this tricky, emotionally and financially loaded situation, there are a few routes that present themselves, and homeowners will need to agree on one of them together (even if they may be finding it difficult to agree on everything else).

Will they sell the home on the open market? Or will they choose to keep the home and have one spouse gift it to the other, have one spouse buy out the other, or leave it to a judge to make a determination?

If One Spouse Is Keeping the House

If the home is staying in the family and not being sold, there are a few important factors that need to be taken into consideration.

First and foremost, the mortgage must be re-financed in order to take the non-owner off the note. This will require sitting down with a mortgage lender and discussing all of your options in depth. You will need to ask some tough questions upfront; the process could be complicated if the couple is underwater on their mortgage, for instance, or if the spouse who wishes to remain lacks sufficient credit or income to qualify for a refinance on their own.

There are other details to remember to take care of, as well. You’ll need to amend the title on the home itself to show only one owner, for instance - although this should be manageable without such a formal process. In essence, the solo owner will need a "quitclaim deed," which transfers interest in real property from one party to another.

This process can get complicated if you go it alone, so you may want to reach out to a certified real estate broker or real estate attorney for assistance – or even just a referral for a qualified mortgage lender when it comes time to refinance.

If the House Is Being Sold

In many cases, homeowners decide to “cut their losses,” and sell the house; most of the time, taking this route allows both parties to make a clean break from the memories - and financial interests – that may be inextricably tied to the property.

If the home is being sold on the open market, or if one spouse decides to buy out the other, an objective value of the home must be determined.

Owners have a few options when it comes to assessing the value of their home; they could opt for an appraisal, but the more effective choice, in our experience, might be turning to a real estate professional.

You see, unlike many appraisers – who will be looking out for other parties and who may not understand the unique circumstances that affect your local marketplace – an experienced real estate professional watches your area daily, and may ultimately be better equipped to determine much the home will actually bear on the open market in practice.  After all, it is a real estate agent who has to garner the value they suggest to their clients (generally speaking), where an appraiser's job is done once the report is completed. 

Above all, finding a real estate agent who will serve the best interests of the sellers, collectively, is important. In a loaded situation like a divorce, you’ll want someone who will communicate openly and clearly, and who can also share market data and analysis to provide both spouses with an objective measure of activity.

And, of course, a real estate agent is a trained negotiator, an skill set that will ensure you can get the most money possible – in order to help ease the expensive split that is divorce.

Looking for guidance on selling your Chicago home? The Real Group team is here and always ready to help. Don’t hesitate to drop us a line with any questions or concerns.

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