Real Estate and Divorce

By
Real Estate Agent with RE/MAX Aboutowne Realty Corp

According to recent statistics, almost 40% of marriages end in divorce.

 For the majority of people, the family (matrimonial) home is the most valuable material asset of the marriage. What to do with the home upon separation or divorce can become a major point of contention for many couples as there are many potential options.

 The first and sometimes easiest option is to sell the home and split the proceeds. This is the choice many couples make, especially if they have a decent amount of equity built up in the home and/or the costs of carrying the home are too much for either of the spouses to handle on their own. Selling can be difficult when children are involved as they will no doubt have an emotional attachment to the home and have friends in the neighbourhood.

The second choice is for one spouse to keep the house by buying the other spouse out. In most cases the buyer spouse would have to refinance the home to pay for it and the seller spouse would receive “fair market value” for their portion of the home. This option is desirable by some couples if they or their children have a strong attachment to the house and neighbourhood. It is also a good option if the spouses have little equity built up in the house or in a slow real estate market where it may be difficult to sell the home and come away with any equity.

A third option is for one spouse to remain in the house without buying the other spouse out. The spouses would most likely agree on a time-frame for this situation to remain in effect which may coincide with the amount of time the children have remaining in school. This choice would require the spouses to have the financial means to carry the home as well as to pay for alternative housing for the spouse who leaves.

There are no doubt other possible options including modifications of the above. I have heard stories of spouses who kept their matrimonial home and shared it with one spouse living in the home one week and the other spouse the next, and of spouses who shared a large home at the same time with one spouse living in one part and the other in another area of the home.

Whatever the divorcing spouses decide to do, they should try to think things through and seek the advice of a knowledgeable family lawyer, their banker and their Realtor, before they make any decisions

Posted by

David Archibald

Real Estate Sales Representative

RE/MAX Aboutowne Realty Corp.

david@westendproperties.ca

416-938-9951 (direct/mobile)

905-842-7000 (office)

905-842-7010 (fax)

 

www.westendproperties.ca

 

Residential Sales - Leasing - Investment Properties

 

Your best interest is my top priority!

Comments (1)

Virginia Cheezum
F. C. Tucker Company - Indianapolis, IN

Unfortunately in these tough economic times, we are seeing divorce scenarios a lot more often - great article.

Aug 11, 2011 02:13 AM