One of the most significant decisions that must be made following a divorce is determining which person gets to keep the family home (if it’s decided that one of you will keep it). While the choice may be easy for some separating couples, it’s not always a cut-and-dry case for everyone. In fact, it’s relatively common for homeowners to disagree on who should stay in the home following a divorce.
Of course, going through a divorce is never easy. There are a lot of important choices to make during this time, and with emotions running high things can get stressful in a hurry. As a real estate team that has helped countless clients sell their homes while navigating a divorce, we’re uniquely familiar with the emotional, practical, and legal intricacies involved in this part of the process.
In this blog, we’ll offer a few helpful tips for coming to an agreement on who keeps the home.
Not yet sure if you should keep or sell your home after a divorce? Click here to read our blog on your post-divorce real estate options.
Protecting Your Interests
While you don’t necessarily need to know right away which person will stay in the home, it’s critically important that you don’t procrastinate on discussing it with your former partner. And, as you approach these conversations, it’s a good idea to be in touch with your lawyer.
Agreeing on what happens with the family home is just one of countless legal elements involved in a divorce, so you’ll need to work with a lawyer anyway. That said, it’s extra important to have a professional expert by your side while you’re negotiating and making plans related to the home. Even if you and your former partner are on good terms, a lawyer will protect your interests should things take a turn.
Considering a joint home sale instead? Explore these related blogs for catch-all tips on selling your home.
- Staging Your Home to Sell: Should You Hire a Professional?
- How to Have Your Home on the Market in One Month
The Most Important Factor: Your Kids
What’s the most important consideration when deliberating on which person should keep the family home? Your kids (if you have them, that is). Divorce is hard on everyone involved, especially children. As agents who directly specialize in divorce sales, one of the things that we consistently tell our clients is that every decision made during a divorce or separation should ultimately come down to what’s best for the kids. This is especially true when agreeing on which parent will stay in the home.
Nine times out of ten, if one parent will have full or majority custody, it’s best for them to stay in the home. Divorce is a huge change for a child. Add a new home to the mix and things can feel chaotic and unstable for them. Plus, having a familiar space to come home to can provide a much-needed sense of comfort and familiarity during your family’s transition.
Beyond just the emotional, there are practical reasons for this too. For instance, keeping your kids in the same home means you don’t need to worry about (potentially) moving them to a new community or school and all the complexities that come with it.
Who Can Afford the Home
After family considerations, another major influencer in deciding which spouse keeps the home is finances. At the end of the day, if either you or your former partner agree to stay put in the family home, you’ll need to be able to afford it.
Homeownership is no small expense – especially for a single person who will now be living and budgeting based on one income. Along with assuming the mortgage (which includes a buyout of the other person’s equity), that person will be solely responsible for covering costs like insurance, property taxes, home improvements, and more.
That said, if you and your former spouse have children, there will likely be some form of agreement about child support or other financial assistance. This can make the costs of keeping the home more manageable for the parent who stays.
How to Calculate Your Home’s Worth After a Divorce
During a joint sale or when one spouse buys out the other’s share in the home, both parties will need to agree on what the home is worth under current market conditions. This isn’t always easy to do, especially if there’s a lack of trust between former partners. Luckily, there is a fair and unbiased way to determine a home’s market value and if needed, calculate how much one partner will spend buying out the other.
The first step is to have the home appraised by multiple sources. Ideally, you’ll have access to
five separate options about your home’s value. These opinions will be from:
● The agent you would use to sell your home
● Two professional third-party appraisers (often each partner hires one each)
● 2 additional unaffiliated local top seller real estate agents (often each partner hires one each)
Using the average of these five values, you should have an impartial estimate of what your home’s market value would be. If you can’t get five separate opinions on your home’s worth, try to at least get a minimum of three from different real estate agents in your area.
If one partner is buying the other out, you’ll take your home’s estimated value, subtract five
percent (average realtor fees*), then subtract your current mortgage and divide by two. The remaining number will be your buyout amount (pending any additional variables involved in your divorce or sale agreement).
*Note that the sales used to determine your home’s value included realtor fees, so they’ll need to come off the top for when the house is eventually sold on the open market.
Taking the Stress Out of Your Sale
At Mutch Property Group, we directly specialize in divorce sales. As experts on the emotional, practical, and legal parts of the process, we work around the clock to minimize the stresses of selling so you can focus your time and energy wherever else it’s needed.
Along with our white-glove, full-service approach, we’re impartial and professional partners who can provide thoughtful and empathetic guidance that never favours or prioritizes one spouse over the other. As a trustworthy and neutral third party, we work right down the middle. You have our guarantee that we’ll represent everyone equally.
Searching for a full-service real estate team to manage your home sale? Call us at 416-903-3695 or send us an email at team@mutchpropertygroup.com.
