If you own and have lived in a Maryland house with your spouse and you’re going through a divorce with this spouse, the questions that come to your mind is what now and who gets the house?
Under Maryland Family Law Section 8-201, this house is referred to as family home (if divorcing couple have minor children) or marital home (if a divorcing couple have no minor children). Amongst other requirements, you and your spouse must have used this house as the primary dwelling when you lived together.
Basically, as part of the divorce process, you must decide and agree with your spouse on how you’re going to share your assets, which include a house you have resided in together. This is one of the utmost emotionally- charged decisions that you have to take with your spouse and this is often complicated. For example, the parties have to decide on the following:
- Are we going to sell the house, and if so, when?
- Who is going to live in the house until it’s sold?
- Who is going to cover the mortgage, utility bills, and other costs associated with the house until it is sold?
While it is logical that many people undergoing divorce find it challenging to make rational decisions, it is worthy to note that making poor decisions will have long-term consequences on things, such as credit reports because of mortgage debts on a house jointly owned by a divorcing couple.
Having said this, it will be very prudent for both parties to be cautious in reaching a consensus about how the house will be handled. This consensus should actually be in writing. Also, both parties might want to seek help from legal and financial professionals, such as divorce attorneys and Certified Divorce Financial Analysts (CDFA). Both of these professionals can work hand in hand to ensure that both parties have complete knowledge of the financial consequences of the divorce and agreements entered-into, during the course.
In addition to this, it is important for the parties going through divorce to understand the options that are available to them regarding the sale of the house. There are various options for handling the house. While the three most common options are selling, co-owning, and refinancing; the simplest option is selling, which can be handled by the court or parties undergoing divorce.
When selling is handled by the court, it is called a court-ordered sale. Just like in a foreclosure sale, the court assigns a local attorney to serve as a trustee who is charged with directing the sale of the house. The house is either sold with a real estate agent or sold at auction.
It is important to consider the implications of opting for court-order sale. One major implication is that it is expensive as the divorcing parties will be responsible for real estate commissions as well as trustee’s commission. In addition, in most cases, houses sold through court-order sale generate lower prices compared to houses that are sold on owners’ terms.
As aforementioned, selling can also be handled by the parties going through divorce. In this circumstance, there are two choices. One of the choices is selling with a realtor who puts the house on the market. The other choice is selling to a house buying company like Kevalla Investments, LLC.
If divorcing parties decide to sell with a realtor, a specific challenge of this choice is that divorcing parties will be required to clean and repair the house extensively. In most cases, the parties do not have the budget for resources that it takes to clean and repair the house.
Generally speaking, selling the house with a realtor involves hiring contractors to repair the house and making sure they show up, waiting for buyers to tour the house multiple times, and having professional home inspector come in and nitpick every little thing (that is the last thing on parties’ mind), which buyers take advantage of, to reduce the sale price. Furthermore, when the parties have an offer approved to sell the house, there is always the likelihood that the buyers’ financing will fall through and then the parties will have to start the entire process from start.
The other choice is to go with a house buying company like Kevalla Investments, LLC. This choice is the right choice to make, if the subject house needs work and the parties want a convenient, hassle-free sale, which enables the parties to sell the house for cash, fast, as-is, without having to spend anything on repairs or pay any fees/real estate commissions.
Sometimes, the parties undergoing divorce might be owing the bank more than their house can sell for. If this is your situation, you might not want to assume you can sell the house the bank may consider a short sale. You can learn more than short sale here https://magazine.realtor/daily-news/2011/01/05/what-qualifies-as-a-short-sale-hardship
This blog is only the purpose of enlightening the readers and is not meant to be used for tax, real estate, financial, insurance, legal, or investment advice. Kevalla Investments, LLC encourages you to contact a professional regarding your own circumstance. Please confer with your advisor when making financial or legal decisions.