Key insights:
- There are multiple ways to approach property division after a split. Consider having one partner remain in the house temporarily or long-term, or you can sell the home entirely.
- Organizing a property sale can be an undertaking, especially after a big life event. Hire a REALTOR® to help ease all aspects of your home sale.
- You’ll want to know what percentage of the sale you’ll receive before closing. Solidify this and other property details before listing your home on the market.
When a significant relationship comes to an end, couples are often so emotionally taxed that the logistics of splitting up assets is the least of their concerns. While this is completely understandable, it is important that both parties advocate for themselves during this time-sensitive division of property and belongings.
Here, we’re sharing tips that can help couples find a reasonable decision on what to do with their house after a divorce or separation. Keep in mind, working with a Realtor can be extremely helpful when buying or selling property – especially in circumstances like this.
Shift into a business mindset
In our series Ask an Edina Realty Lawyer, experts explain what it means to get a divorce as a homeowner. Whether you and your spouse were planning to buy or sell at the time of divorce, a property is one asset that can be a transparent source of income for both parties involved in a split. Even if you suspect your former partner might conceal other financial information, it’s important that you remain amicable and proactive about the decision you make surrounding your home.
In the following sections, we’ll detail some popular ways to handle property separation, including:
- One partner staying in the home – for now.
- One partner buying the other out.
- Both partners choosing to sell the property.
If you’re experiencing friction or pushback with a fair division of property, it may be time to hire a mediator who can help set ground rules for how to move forward.
Option 1: One partner temporarily stays in the house
It may be best for one partner to remain in the house, especially if kids are involved in the divorce. With one parent staying put, kids can continue to be involved in their usual activities, classes and sports. If this is the case, be sure to work with an attorney who can help guide conversations regarding:
- How a separated couple can split the current cost of the mortgage.
- How to share the profits if the home sells after the divorce.
- What kind of conditions will be required to eventually sell the home (e.g. a new paint job or a replaced furnace).
- Who will plan to pay for these presale “fix-up” costs, or how the costs can be evened out at the time of sale.
Option 2: One partner buys the other out
Another option is for one partner to buy the other out. You’ll need to work with a mortgage loan officer if, when the home was first purchased, both partners were on the title and qualified for the loan together. Today, the partner who intends to stay in the home now will need to qualify for a loan on their own.
If the approval is given, it’s still important to have a lawyer’s expert advice in:
- Examining the home’s new title and policy.
- Ensuring the updated title only has the buyout partner’s information.
- The potential strategies and risks of this path.
Option 3: Both partners sell the house
First, you’ll need to discuss if you want to sell the property immediately or if you’d like to rent out your home for a predetermined period of time. If you owe more on your home than it is worth, you and your former partner may wait to sell. Then, when your home has equity, you will be able to break even or (more likely), turn a profit.
If you’re ready to sell now, be sure to follow these important steps:
- Hire a Realtor to facilitate the property transaction.
- Discuss the final sale details with all parties involved.
- Create a clear plan to divide the post-sale profits.
Kick off the sale process by hiring a Realtor with plenty of experience in your market area. And, make sure to hire an agent who has no previous ties to you or your previous partner. While it may seem tempting to hire a trusted family member or friend, it’s important that you choose an expert who is completely neutral, though aware of the circumstances.
Next, you should have an open discussion with your Realtor and all other parties involved to solidify the final sale details in writing, including:
- Who will pay for any repairs before listing the home for sale.
- Agreement on an initial list date.
- Agreement on an initial list price.
- A plan for when to lower the listing price.
Remember to come to an agreement on what percentage of the home’s sale each partner will receive upon closing. And, to ease the stress on the buyer, make a plan to receive one payment at closing, which will then be distributed to each party as agreed.
Hire a Realtor
There’s perhaps no better time to work with a professional Realtor than when you are dealing with the emotional stress of a move. Not only do Edina Realty agents work with buyers at all different life stages, as licensed Realtors, they also live up to a code of ethics that promises to serve your best interests.
When moving forward with property separation, reach out to Edina Realty or your agent. You can rest assured that our Realtors will handle your property (and you!) with honesty, kindness and respect during this time.
