Divorcing couples face different challenges, including dividing their assets and debts. The husband and wife have equal ownership of assets and equal responsibility for debts they acquire during the marriage. The marital home often qualifies as both the largest asset and the largest debt. Whether it must be sold as part of the divorce agreement depends on the couple’s preferences and their financial situation.
Selling the House
According to attorney Aaron Lawson, writing for ExpertLaw, if you and your spouse decide to sell, or the judge orders you to sell, you’ll choose a real estate agent and work with the agent to list the home for sale. The spouse who lives in the home while it’s listed is generally responsible for keeping it ready and available for showings. You’ll repay your mortgage loan from the proceeds from the sale. Any remaining money goes into a trust account pending the judge’s decision about how to divide the money.
You could work at trying to find a buyer to take your home. However, a faster and easier option is to find an investment firm that buys houses as-is for cash, fast. Instead of spending all of your time and energy trying to locate a buyer, there are many companies that can do this for you. Investors like David Blank will buy the house from you at a reduced price, and very quickly. To get a fair cash offer go to davidblank.com.
Alternatives to Selling
A husband or wife who wants to remain in the home can buy out the other spouse. The easiest way to do this is usually for the spouse who’ll keep the house to assume the existing mortgage — transfer it into her own name to remove the spouse’s name from the loan. If the mortgage isn’t assumable, the spouse can apply for a new first mortgage loan to pay off the existing loan and pay the spouse for his share. The spouse who accepts the buyout signs a quitclaim deed to relinquish ownership of the home. Other alternatives to selling include renting the home to a tenant while the couple decides on a permanent solution.
In cases where the mortgage balance is higher than the home’s value, refinancing is usually not possible. The couple’s negative equity position means there is no asset to divide; there’s only debt.. A short sale is one in which the lender allows the owners to sell the home for less than they owe on their mortgage. A short sale can be a long and difficult process, and it negatively impacts the owners’ credit. It is, however, a better alternative than walking away and allowing the bank to foreclose.