One of the realities of today’s world is that over half of the population will experience a divorce. Of course, divorces are not just the severing of two people’s emotional lives—they also involve the division of assets. One of the most significant assets in any divorce is the family home. This property often represents the largest financial investment the couple has made, and both individuals will naturally want to ensure that their share of the investment is protected.
The Reality of Divorce: Antagonizing Circumstances
Even if you are fortunate enough to be going through an amicable separation, tensions are likely to arise—especially when the house comes into question. Be mindful of your emotions and avoid making impulsive decisions, such as prematurely selling the home or signing away your rights to the property. Regardless of how strained the relationship may be, any secretive or underhanded deals are likely to be uncovered in the end—and the person responsible often ends up losing more than they gained.
Sales Options in a Divorce Situation
Ideally, both parties will agree to sell the home and split the sale proceeds equally—or according to a formula determined by legal counsel. In this scenario, the process is relatively straightforward: a buyer is found, the home is sold, and the money is divided.
However, there are other alternatives. One spouse may decide to retain ownership of the home. This arrangement still constitutes a sale—essentially, one spouse is buying out the other’s interest in the property. The best way to handle this is to have the home appraised by a neutral third party. The appraised value is then divided in half, and the spouse who stays in the home pays the other for their share.
In all cases involving property division, each individual should consult separate legal counsel. However, it’s usually advisable to work with a single real estate agent for the home sale to avoid paying double commission. Legal representatives can negotiate which agent to use.
Financial Pressures and Creative Solutions
One of the greatest challenges in a divorce is the financial strain that comes from losing one or both household incomes. This is especially difficult if one spouse was a stay-at-home parent. In these cases, selling the home quickly may become a necessity to avoid falling into debt.
However, if the real estate market is slow or unfavorable, a lease option may be a smart alternative. Under a lease option, the home is rented out to tenants who have the opportunity to buy it later. This arrangement can help cover monthly expenses like mortgage payments and property taxes, while also opening the property to a different group of potential buyers—those who need housing now but aren’t yet able to purchase. For divorcing couples, this can be an ideal solution: it addresses the immediate financial burden while allowing the asset to be sold at a better time.
Beware of Fleecers!
Divorce often leaves people vulnerable—emotionally, mentally, and financially. Unfortunately, there are individuals and companies who take advantage of this vulnerability for their own gain. Be cautious of so-called “rescue” companies that offer to buy your home quickly to ease your financial stress. While their promises may sound appealing, these businesses often exploit distressed sellers and offer far below market value.
If at all possible, try to communicate civilly with your former spouse. Working together toward a common financial goal will almost always result in a better outcome than acting out of anger or desperation.
