For most of us, our house is our single largest financial investment.
Thus, deciding who gets the house in a divorce is often difficult and emotional.
Your ‘marital residence’ however, represents much more than its significance as an asset.
There are the years of heartfelt memories like raising kids, celebrating holidays, and planning for the future. On the other hand, your home may be equally filled with heartbreak, disappointment, and broken dreams.
Deciding whether to buy out your spouse so that you can keep the house, sell it and split the proceeds, or determine a temporary arrangement until the children reach a certain age, will be one of the most difficult and emotional decisions that you’ll have to make during your divorce.
The reality is that fear and uncertainty loom over us throughout divorce.
As a result, we are likely to make these decisions with a fear-based perspective that has us believing all the ‘worst case scenarios’ which consequently, can cause us to become paralyzed when trying to take steps to move forward.
How do you decide who gets the house in your divorce?
Consider these 4 items when deciding who gets the marital residence.
1.) Can you afford to keep the house?
As emotional as this decision is, you must start with the financial facts.
It is crucial that you partner with a financial expert who can help you understand what you have, owe, and need before making a decision about who gets the house.
You must be able to afford not only the monthly mortgage and bills, but have enough liquid assets to address the need for new appliances, repairs, or renovations.
Despite how emotionally-connected you are to the house, making sure you’re financially capable of maintaining the house must be your first step.
Otherwise, you’re setting yourself for a major struggle that could leave you in financial ruin if you keep the house.
When I was divorcing I quickly realized I could not afford our home. Neither could he, but he wanted to keep it anyway. I considered converting the basement into an income apartment and other possibilities.
2.) Does your ex-partner want to sell the house?
One of the biggest complications is when one spouse doesn’t want to sell. They will price it too high, be uncooperative around open houses or showings, and won’t participate in clearing out the clutter and staging the home for the best possible sale price.
In this situation, you’ll need agreement on a sale price, how long the house will be on the market before you reduce the price, and the consequences if one party does not abide by the agreement.
When deciding to sell your house, you’ll want to pick a Real Estate Broker with a high level of emotional intelligence and specialty in working with divorcing couples.
Your agent should be able to gain the trust of both you and your spouse while helping you navigate the tender emotional issues and strong resistance that may arise.
Hiring the right professional can make the difference between a quick and smooth sale or a painfully long and unprofitable experience. (Receive sensible advice from a Real Estate expert by joining our Online Divorce Support Community and tuning into our program, ABCs of Real Estate During Divorce)
3.) Can you stay in the home until the children reach a certain age?
The question of affording the house gets more complicated if you have young children and wish for the monied spouse to agree to you and the children remaining in the house until they reach a certain age. Again, the first question remains: is this a financially-viable solution? If not, then you are back to Plan B.
If your spouse can afford this option, then there are many details to work out. Who pays the mortgage, bills, and repairs during this time? How does that affect the ultimate equity split when you do sell the house?
It is vital that boundaries are agreed upon as well. Are funds put in escrow for said bills and unexpected costs? Is there a limit to his/her investment? If the monied spouse leaves the home yet continues to pay for it, what does that mean in terms of a right to access the property?
If you are leaning toward this option, make sure to speak to a financial expert, real estate professional and your attorney to ensure that you cover all the legalities.
Once an agreement is reached, there’s no going back, so be sure to consider every possible issue that might arise and address it.
4.) Does your spouse want to buy you out?
If you are open to this option, it is common practice to choose a neutral Real Estate appraiser for an agreed upon value. Or if you each get an appraisal, they should be in the same ballpark and you can split the difference.
The hardest part of this decision may be your emotional resistance to your spouse having the ‘real’ home that your kids grew up in. Working through those emotions is essential for you to move forward in peace.
When I was divorcing I quickly realized I could not afford our home. Neither could he, but he wanted to keep it anyway. I considered converting the basement into an income apartment and other possibilities.
In the end, I realized a fresh start was my overall best choice.
While the kids continue to have a strong connection to the house, they enjoyed painting and designing their new bedrooms as they settled into their new home.
As adults, we are often more connected to the material than our children. Kids want to be loved in a safe environment. I left a large beautiful home (complete with inground pool, finished basement and other bells and whistles) for a small carriage house less than a third of the size. I quickly became and remains a home we all love.
Letting go of the marital residence is never easy. There is a grieving and mourning period that go along with that loss.
I have worked with hundreds of divorcing individuals who left or sold the marital residence and after the initial sting, we thrilled with their decision to start fresh in a new home.
In the beginning their ‘stories’ about how the devastation of such a loss to them and/or their children created suffering. Yet as they began to live in their new home and new life chapter, they appreciated the hard choice they made and the possibility it opened for them and their future.
Honor your emotions while being guided by the financial realities of your circumstances. You will be setting yourself up for a better tomorrow!
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