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Going through a divorce is tough, no matter how you view it. Even the most amicable separations come with challenges. If you’re going through this life-changing event, one of the main things you will need to address is how to handle your property after a divorce. If you’re unsure how to deal with your home, check out the four options below.


Option 1: Sell the Home

The first, most common option is to sell your property after a divorce and evenly divide the proceeds, which is often considered the “cleanest” choice. Selling the home allows you to cut the largest remaining tie with your former spouse, helping you to forge a new path for yourself.

If you choose this option, consider using a real estate agent who specializes in working with divorced clients. There are many benefits to working with a Certified Divorce Real Estate Expert (CDRE™), such as:

  • They know how to price your home correctly.
  • They can help you avoid costly mistakes.
  • They are trained on how to conduct business with tact and neutrality.
  • They have expertise regarding family law cases.
  • They can guide you in accessing an entire network of other helpful professionals.


Option 2: Buyout Your Spouse’s Equity

This option involves one spouse buying out the other spouse’s equity, thereby owning the house outright.

Quick note: If you bought the home together, typically, equity is split equally. However, your spouse’s equity amount may depend on what state you reside in and who owned the property before marriage. If unsure about these issues, you should consider speaking with a divorce attorney.

Before starting the buyout process, take the time to get an appraisal to know the home’s fair market value. Doing so will ensure that you will be asking a reasonable price for the property.

If you want to buy out your spouse’s equity, your loan officer will use this fair market value to assess whether you can afford the house. They will also look at other homeownership costs like property taxes, utilities, and unexpected maintenance.

You can consider refinancing the home if you don’t have enough funds for the transaction. When you refinance, you can receive cash for a portion of the home’s equity and use that toward the buyout.


Option 3: Rent Out the Home

Thirdly, you can rent out the house when handling property after a divorce. However, you need to make sure you are on decent terms with your former spouse before attempting to own a rental property with them.

With this option, you can earn passive income, but there is a catch – you must be a co-landlord with your ex. If you still have a friendly rapport and feel like this might be a reasonable option for you, there are a few things to consider:

  • How will the two of you choose tenants?
  • How will you split monthly costs?
  • Who will collect the rent, and how will you disperse the funds?
  • Who will oversee renovations, maintenance, and repairs?
  • Who will deal with renter issues and complaints?

As a reminder, this option is only viable if you are on amicable terms with your ex. If things don’t work out, you can always return to option 1, listed above.


Option 4: Cohabite With Your Former Spouse

In recent years, more couples are choosing to live together after divorce. This is often due to children, finances, and local housing markets. However, you must be on the best terms with your former partner for cohabitation to work well.

If you choose this route, you and your ex need to set boundaries and share your expectations. Talk about how you will divide living space, household expenses, chores, and perhaps even dating new people. This living arrangement requires a lot of planning, tact, and patience, so be sure you’re up for the challenge.


Proceeding with Confidence

Before deciding how to handle property after a divorce, ensure you’ve crossed your t’s and dotted all your i’s. Check the following to feel more comfortable with your choice:

  • Determine the current market value of your home. Ask your trusted mortgage professional whom they recommend helping with this process – they can refer you to specialists who can give you a realistic sales price and determine your best course of action.
  • Figure out how much equity the house has. Current Home Value – Remaining Mortgage Amount = Your Home’s Equity. Here is an example: If you owe $150,000 on your mortgage and your home is valued at $200,000, you have $50,000 equity.


Final Thoughts

The key to handling property after a divorce is having the right professionals in your corner. Whether you are buying out your former spouse or want to purchase a new home, plan to work with a knowledgeable mortgage expert.

I can help you establish how much “house” you can afford, explain the different types of mortgages, offer free resources, and more. For a low-stress, no-pressure experience, please contact me – I’m happy to provide the support you need!