As much as one or the other may want to keep the home, frequently the situation demands otherwise. This can be due to legal, financial, emotional or liability reasons, but in the end, the home must be sold.
KANSAS CITY, Kan. (PRWEB)
October 23, 2019
For many couples, their home is the greatest asset they possess, one that also has a lot of sentimental value. “Rarely is selling the family home the first choice of divorcing couples,” said Steffen, agent and team owner of the CORE 1 Real Estate Team. “As much as one or the other may want to keep the home, frequently the situation demands otherwise. This can be due to legal, financial, emotional or liability reasons, but in the end, the home must be sold.”
No. 1: Legal reasons. The division of property, and specifically the division of the family home, may not be a cut and dry transaction. “Each of you contributed to the purchase of the home – even if one did so more than the other, each wants their fair share,” noted Steffen. “If you cannot come to an agreement out of court, the court will decide for you, which often includes the sale of the home.”
No. 2: Financial reasons. For married couples, their mortgage is usually based on both incomes. “Cut that salary in half, and even if your income is the higher of the two, house payments, insurance, property taxes and upkeep is often too much to handle for most spouses alone,” stated Steffen. “Do not overlook the potential capital gains tax ramifications as well. If you are married and selling a home, you can exclude up to $500,000 in profit; single, and the capital gains exclusions drops in half to $250,000.”
To be eligible for this exclusion, Steffen explains, you must have lived in your home for two of the last five years. The home must also be your personal residence, and not an investment property.
No. 3: Emotional reasons. With the departure of one’s spouse, the once happy home can quickly become unpleasant to live in. Memories of better times – or the bad times – can taint the comfort you once experienced living there. “Some people are just not interested in going through these feelings day in and day out,” added Steffen. “Sometimes in divorce, the intent to keep the home has more to do with retaliation than the desire to retain the home. This is one of the more prominent reasons why the spouse that has retained occupancy often decides that keeping the house was not all it was cracked up to be.”
No. 4: Liability reasons. If one person wants to keep the house, the other should be very clear on what that means. There are multiple ways to keep a house and let one spouse remain in it, but each carries difficulties and risks.
Take over the mortgage: If the spouse who wants the home has enough income they can refinance the home, thereby completely eliminating the other spouse’s liability. Refinancing transfers ownership, but does not address how the equity in the home gets allocated. This usually means consulting a divorce attorney, and may require that the home be sold.
Co-own the home: The remaining spouse can make full payments, or you can both agree to a percentage. This requires a great amount of trust. Should the remaining spouse fall behind or fail to make the payments, the departing spouse will suffer the same credit issues and mortgage problems of the defaulting spouse.
“The divorce Realtor you select is important, given that there could be two parties that might not be getting along,” concluded Steffen. “It is crucial that you choose a Realtor who is not only experienced in divorce real estate transactions, but also understands the nature of divorce and the emotional challenges that exist.”
About Rich Steffen, CORE 1 Real Estate Team, Keller Williams Key Partners, LLC
Rich Steffen has been providing real estate solutions for his clients since 2001. The CORE 1 Real Estate Team serves buyers and sellers by providing an efficient and stress-free process designed to protect their client’s money, time and peace of mind. For more information, please call (816) 560-8494, or visit http://www.core1team.com/.
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