In the current state of the housing market, there’s a strong chance that you’ve built up a lot of equity in your family home. You might have sentimental attachment to the residence, too, especially if you’ve raised a family there. But what happens to your home when you divorce?
That’s a good question. You essentially have four options. Let’s briefly look at each of them:
- A buy-sell transaction with your spouse: If you or your spouse would like to keep the home, then one of you can “sell” your share of the residence to the other. This requires parties to agree on the current value of the home and the appropriate division of the home equity.
- Barter with your spouse: If you want to keep the family home, then you might be able to use other assets to bargain or trade in order to keep the residence. Just like in the example above, spouses have to agree on the value of the home equity being traded and must determine what other assets exist that are comparable to bargain with.
- Sell to a third-party: If neither spouse wants or can afford to keep the home, another common option is listing the residence for sale. This generally involves an agreement between spouses to work together with an experienced realtor to facilitate the sale and, in many cases, the proceeds from the sale are divided between the parties after costs and expenses are paid.
- Continue co-ownership: This is an uncommon avenue, but continued co-ownership allows you to build more equity in your residence while sharing expenses. Usually for spouses to choose this option, there is a very specific purpose to keep this joint asset, such as wanting to keep their children in the home until they graduate from high school or wanting to use the home as a shared investment for future sale at a larger profit. In situations where parties continue to share assets post-divorce, a divorce agreement must be very detailed so as to avoid future conflict.
Competently handle your property division process
Confronting the property division process in your divorce can be stressful, especially when you have significant assets like a family home. With so much change on the horizon, you owe it to yourself to work with a skilled attorney who can help put your mind at ease and assist you in crafting your new future.