Questions About the Marital Home?
When one spouse is awarded primary custody of the children, judges are often reluctant to interrupt the status quo and will award that spouse the house in the divorce. However, because the carrying costs are usually high for one spouse to handle alone, many couples end-up dividing their real estate. A common practice is for one spouse to buy the other out with cash or new financing, or for one spouse to give the other equally valued assets in exchange for full ownership. But when there's not enough money to go around, the house may have to be sold and the proceeds divided.
Before you negotiate a settlement to accept the house as a property award in lieu of other assets or in exchange for your spouse receiving alternative property, calculate how much the sale of the house actually puts in your pocket to make sure you are getting a fair deal. There are several costs, fees, and taxes that will reduce your net proceeds:
- Real estate broker's fees (usually 5-6% of the sale price by you, the seller)
- Closing costs
- Property taxes or transfer taxes
- State capital gains taxes
- Lack of equity (value of the home minus what's owed to the bank)
It's not unusual for spouses to continue owning the family home together, especially when children are involved. If one of you wants to buy the other out buy can't afford to do it all at once, you might agree that payments can be made over time while both of you share in the interest of the house. The advantages to continuing to share ownership are that if the custodial parent can't afford to buy the other one out, the children get to stay in the house anyway. This can make a buyout possible by spreading payments over time. You can always stipulate that, when a specified date arrives (such as the children graduating from school), the home shall be sold and the proceeds divided.
The disadvantages of joint ownership can be significant. Because the two of you are jointly responsible for the entire mortgage, a credit report for either of you will show the entire amount of your mortgage. Having such a large debt on your credit report – especially if you are not living in the house – can make it difficult to get credit for other purposes. Finally, you always bear the risk that your spouse will make late payments which can hurt you. You are well advised to include an indemnification provision in your agreement to protect you from your spouse's wrongdoings.
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Since our attorneys are assigned to a specific region and set of courthouses, we know how policies and procedures are handled in each courtroom, and you can count on the fact that we know how each judge tends to work.
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When you are involved in matters relating to who gets the marital home your chief concern is protecting yourself and your children. The aggressive and experienced family law attorneys at Law Group, P.C. do everything possible to achieve the best possible outcome the first time around, because appeals are rarely won. For a FREE, no-obligation consultation, call 800-851-7724 or e-mail us.
