Divorce and real estate, one of the most frustrating and expensive combinations around. This is an area attorneys try to avoid and with good reason. For example, there’s a disagreement on who gets the house. It still has a mortgage on it that neither person can afford on their own meaning they will have to sell. But who gets what from it? Is it a 50/50 split or does ownership go to one person?
That’s for the courts to decide but the reality is that this issue comes up in a large percentage of divorces, especially because homes are usually the biggest and most expensive dispute that comes with divorce. Who gets it and if the decision becomes to sell and split the money, what happens if you cannot sell it right away? These are fair questions to ask and they are a big influence on decisions that have to be made.
Should You Sell?
Every divorce is different as are the circumstances involved. From a financial standpoint it may make more sense to sell right now, especially if you can make a major profit. However, there are several factors that you have to consider including whether or not it is the right time for you to sell. Arizona, like the rest of the country, is not immune to the economic slowdown that has hit the real estate market.
You cannot make a decision on whether or not to sell until you have taken into account the current state of the market. However, keep one thing in mind, the courts will not take that into consideration so if the argument becomes who gets the house and who gets the cash that’s in the bank accounts, you may not want the house as much as one would think.
What If You Can’t Sell Right Now?
The reality is that unless you list your home for 20% or more under fair market value, you have to expect the property to take three to six months to sell right now. High interest rates, to go along with the high cost of properties, has significantly slowed down the pace of home sales. The good news for you is that properties are still selling, but they are taking longer and not getting the same value as they were even a year ago.
This may impact your property as well as the decision whether or not to sell right now. If you cannot, you need to have a plan in place for what you can do if you need to hang onto the property even longer. The good news is that there are ways to draw money off the property right now including renting or AirBnb.
Establish A Living Situation
Before you do anything, make sure you know where you will be living. This is an important tip especially if you have children because the courts will want to know how their living situation will be handled. If you cannot afford to stay in the property and you need to move out, where you will live needs to be decided before you sell the property.
Living Together Is Never A Good Idea
A simple financial solution to the problem would be for you and your ex to keep living together to cover the mortgage. Unfortunately, this is happening to thousands of people right now. Couples divorce but are stuck living together because they cannot afford to go anywhere else and they cannot sell the property at this time. It never goes well and usually leads to more fights.
Don’t Forget To Include Your Accountant
When making financial decisions, especially ones that include real estate, make sure you talk with your accountant as well. They know your finances and they may be able to offer recommendations and guidance that could benefit you greatly. Maybe holding the house the rest of the year doesn’t seem like a great financial choice right now but your accountant points out how you will benefit more in taxes from doing so?
You want to get as many experts in the process as possible so that you know your options and best course of action. Your accountant, attorney and realtor are all people who are licensed and experienced in these areas and can give you specific answers and guidance on what you should do.
Realtors Can Also Offer Some Guidance
A realtor can give you a great idea on what options you have with the property including its value, what it could sell for, how fast it can sell and more. Your realtor may also recommend renting it out based on the current local markets in Arizona which needs to be considered as well. Remember to go over your current costs with them including what you owe on the house, as well as any equity, so that they can offer you their best recommendation.
Attorneys Have Seen It All
Sit down and talk to your attorney about what your options are after you’ve spoken with your accountant and realtor. Allow them to offer their guidance based on their experience as well as what they’ve seen from other people in similar situations.