I can’t fix the divorce.

I can, however, help with real estate issues surrounding divorce.

First, try to step back and think strategically, and before you do anything, say anything, promise anything take a step back and consider your options. Most of the time, the emotions run high, and it’s easy to make a decision you’ll later regret. I’ve heard of people walking away from tens or hundreds of thousands of dollars in equity, selling assets for pennies on the dollar (to an insider) to spite the divorcing spouse, or damaging the well being of children unnecessarily. I can help you come up with a plan.

First, the basics:

  • If you have children affected by the divorce, it may provide some stability at first to keep the children in place and swap the parents in and out. While this means maintaining 3 residences instead of 2 (the current home, then typically two “bachelor pads” or temporary roomate situations for the adult only, or a simple rented apartment for a transitional time period), it will help children adjust while you plan the next move.
  • There are a few options, if one person wants to keep the home and can afford it:
    • Most Common: The one keeping the home obtains an appraisal (I can recommend an appraiser, of course), subtract the mortgage balance, then split the equity and writes the party a check if funds are available liquid; if funds are not liquid then the party keeping the home may need to refinance. Remember when considering equity position, by the way, to include liquidation cost into the equation; the party who retains the property will one day incur costs related to sale, so a simple appraisal is part of the equation but not all of it – typical sale costs are 6% and a few hundred to a few thousand dollars depending on details. There also may be tax implications for capital gains, which should be factored into the final split. Your tax professional is best qualified to advise on capital gains issues, though I can help with everything else.
    • Also Common: Simply sell the home, and each party moves on to the next chapter of life. If there are no children affected, this is most common. I can help you sell the current house, arrange to split the equity, and purchase a new (usually smaller) home (or condo) that reflects your new lifestyle(s).
    • Least Common but an option: One party gives the other a legally-binding loan against the property and makes payments. This is used when the party keeping the home cannot refinance, and doesn’t want to or is unable to sell.
  • All of the above assumes there is equity in the property. If there is not equity and it’s a wash, e.g. the mortgage balance is pretty equal to the property value, then one party can simply walk away, though he / she should ideally get removed from the mortgage and removed from title to sever any legal liability for actions than occur after leaving the property.
  • If there’s negative equity, check out our page on short sales. You’ll either need to bring in cash-to-close and agree on it, or will both have to take the credit “hit” (damage) and agree on a short sale as a strategy.

Whatever the case, divorce can be a trying time and now more than ever, you need me in your corner. Contact me now and tell me just a quick overview of your situation, and I”ll be happy to give you some ideas to consider on how to best proceed, and can help you take the next step. I look forward to speaking with you!