What Happens to My Home in a Divorce
This is not a fun topic to discuss, but one that unfortunately comes into play sometimes. When a divorce occurs, what happens to the home? Well, there are a few ways this can play out. Hopefully the two parties involved can be amicable as that will yield the best results for all involved. Otherwise, it can get ugly with additional legal fees and challenges.
1) The Home is Sold
- As Arizona is a “community property state”, normally both parties own the home. Therefore, a sale of the home can take place. This would require both to be in agreement to do so and to choose whom to handle the sale (hopefully us). If there is a disagreement, then the courts can become involved and judge actually appoint the party that will handle the sale. We are approved as a ‘Special Commissioner of the Courts’ to accommodate these situations. At closing, proceeds would be split however is agreed upon during the escrow period.
2) One Side Buys Out the Other
- If able to qualify, then one party can buy out the other’s position. Since normally there is an existing loan, essentially it would be similar to a “refi” where that party wanting to retain the asset would need to get qualified for a new loan. Most often we would see a scenario where half of the projected proceeds if the home were to be sold is then given to the other party as a “buyout” for them to relinquish their portion of interest in the property.
3) Nothing… for now
- Sometimes people whom are still on good speaking terms will decide to hold the home. This often can be the case when investment properties are owned by the splitting couple. Nothing says you must sell when a divorce occurs. However, your divorce decree would be sure to outline whom keeps what, whom is responsible for what and so on.
Our best advice is to be reasonable and don’t act out of spite or else it usually becomes costly. Real Estate holdings are often your most valuable asset so you don’t want to act a certain way now that you’ll later regret for years to come. We are glad to speak with both parties together or separately to advise of the true options in order to help you figure out which solution works best.