Why People Sell Series: Divorce & Selling Your Home
Selling a Raleigh home in the best circumstances is stressful but selling in divorce is the second most stressful life event you will ever go through. When children are involved it is even more complicated. Many people make mistakes with their marital homes during divorce because they’re in a highly emotional state. Divorce is an ending of a marriage and life as you have known it but it is also the beginning of a new chapter in your life. It’s important to give yourself the best start possible by making wise choices. Everyone going through divorce needs to know all of their options and the pitfalls that may be associated with each one, so they can choose well.
Choices around the marital home can come with huge consequences if not well thought out. Here are three common examples of how couples first respond to the future of the shared home when entering divorce and the consequences associated with each one:
- One party feels guilty and wants a quick division so they negotiate a buyout with the other spouse. On the surface this seems like a good idea however, many times they realize in their emotional state they paid too much or really could not afford the house on a single income. Failing to estimate true value of the asset, all the cost associated with a future sale and the stress that will be added to their household budget by acting too quickly leads to regret and more stress.
- Others know they do not want the house or the debt that goes with it and they fight over it like a hot potato. Months of fighting over who’s responsible for the house can really drain any profit they may have once they divide.
Learn more about how divorce impacts a move by checking out our Raleigh Real Estate Blog Series on Divorce.
One thing is for sure: Even though divorce is hard, an experienced Raleigh Realtor with a calm head can be a huge asset!
+Step by Step Divorce Action Plan
- Check to see whose name is on the mortgage. Is the mortgage held jointly or individually? If individually, a quick claim deed may be a quick solution. However, North Carolina is a marital state so even if you owned the house individually before marriage, you own it jointly now. Each spouse will have to agree to ownership and division unless you married with a prenuptial that excluded your pre-marriage home.
- If you have a mortgage on the marital home you need to contact your bank to request a mortgage pay off. A payoff is different than the mortgage balance you see monthly on your payment statement. The payoff includes the interest in arrears, which is a banking term that simply means you owe more money then monthly statement shows. Knowing how much you truly owe to be released from the monthly debt obligation is key in determining your options. If you owe less than you will be able to sell your home for, then you have what we call equity. With equity in the property that will allow you to either sell and divide the profit or buy each other out.
And these two steps are just the beginning! For the complete step-by-step divorce action plan, head over to our Wake County area real estate blog.
+Your Tough Divorce Questions Answered
How do most couples decide on a buyout price? ... What's the difference between a Realtor's Value and an Appraisers Value? What happens if you haven't owned your home very long or it has no equity because of high mortgage balances or declining home values?
Perhaps these are questions you never imagined you'd have to ask one day. But if you're a recent divorcee, it behooves you to check out our "Tough Divorce Questions Answered" blog. It will prepare you for navigating the local housing market as a divorcee.
+7 Common Mistakes People Make with their Homes in Divorce
1. Struggling to keep a home they can’t afford so the children do not have to face more change. Many people as so overwhelmed in divorce that they try to minimize change by refusing to move. It’s a known fact that children bounce back faster from change than adults do and if you can’t afford the home the financial stress will cause them more pain.
2. Fighting to keep the home for sentimental reasons. Keeping a home if it’s affordable makes perfect sense but most people do not plan their budgets very well and end up living in financial stress. Because of the financial burden when they do sell later they have deferred maintenance and other losses they did not consider when negotiating to keep the house. If they are thinking about keeping the house with one income I would recommend they meet with a financial planner, certified in divorce, which I will gladly offer a referral. Remember, with time your emotions will change.
3. Agreeing to each be responsible for 50% of the payment. Over the years I have met with a lot of woman with children who were granted the house in divorce with an agreement they would each pay 50% of the payment. With a foreclosure notice in hand they were shocked as they explained to me that they gave a check to their ex every month and thought he was making the payments.
Discover the next four most common mistakes that people make with their homes during a divorce by checking out our blog, "Raleigh Real Estate Series Part 4: Seven Common Mistakes Divorcees Make."
Couples Entering Divorce Need Help
As a real estate team many of us have been through divorce and understand your pain and stress. 30% of our clients are walking in your shoes right now. Please allow us to share our experience in dividing marital property to help you make the best choice for your future.
Linda Craft & Team, Realtors – 919-235-0007 – LindaCraft.com