Divorce and Real Estate
I would venture to say that most people don’t say “I do” with an exit strategy in mind. Most people, even those that don’t necessarily prescribe to the “happily ever after” idea, look toward the future with high hopes and expectations. A lot of couples get married, buy a house, maybe have children or pets and during those years, acquire a lot of stuff. If those relationships turn into more of a nightmare than a fairytale, they can end in divorce. So, what happens to all those things you purchased while married or acquired? Well, they have to be split somehow. Kids and pets are a subject of their own and that is not a subject I am qualified to discuss. The house, however, is my specialty.
There are several things that need to be considered when there is real estate involved in a divorce and they all revolve around one question: Are you selling the property or is one party keeping it?
To keep things as simple as possible, financially, some people decide to sell the house when they divorce. I am not here to give you legal advice, as I am not a lawyer. I do have some tips, however, that you should consider and speak with your attorney about. When selling a vacant property (land or otherwise) there is not much more to consider, for real estate purposes, than with a normal sale. However, sometimes one party has moved out of the house and the other is staying until it sells. If this is the case, be mindful of staging. If half the furniture is gone or half the closet is empty, buyers ask questions. If tax records indicate that two parties own the home and only one appears to be living in it, negotiation power could be lost if the buyer smells divorce. Also, the person staying in the home will be the one burdened with keeping it clean and having the property shown. This may be a sacrifice worth making or you may want to re-think your decision.
If one person is keeping the house in the divorce, you will want to get an inspection as well as an appraisal. Most people think about the appraisal as the way to determine value. While it can help determine market value, it doesn’t take into consideration all necessary repairs. An appraiser will look at the finishes, etc. but they won’t necessarily be able to evaluate functionality of all the systems and appliances. The party staying in the house will want to get an inspection to determine what repairs are needed and take into account age of all major systems in order to get the full picture of value. Another consideration is getting the ex-spouse’s name off the deed. There is more than one way to do this, depending on how it is owned but this is very important. If the staying party wants to sell at some point, they may not want to or even know how to get in touch with the other party in order for them to sign papers. Adversely, if the spouse that didn’t stay wants to purchase a property, they may not qualify for a loan if they are still tied to the old property.
Emotions can be raw during divorce and people can make irrational or unreasonable decisions. You should definitely consider all options and discuss them with your partner and/or attorney, etc. so you don’t end up with more heartache in the future.
P.S. These considerations apply to non-married parties that own property together, as well, so make sure you are mindful and don’t take relationships or real estate lightly!
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur babies, Tyler and Livvie, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.