Even when you realize you can no longer coexist in unity with your significant other, there are still some compromises to be made. One of the burning questions is what to do with your house during divorce.
Even while divorcing you’ll likely have to make certain compromises. One of the biggest ones is concerning what will happen with your house during divorce. Most people decide to sell their house, however there is more than one option.
Who Will Get The House During Divorce?
Unless you have a divorce settlement that states exactly what happens with your house during divorce, the division of assets will depend on when and how you have acquired the home, as well as the state you are living in. However, if you negotiate outside of court, you can have bigger freedom in making decisions. This is why it’s always a good idea to try to remain civil enough to communicate and reach an agreement with your former spouse. If this isn’t the case, here is what typically happens with every property type.
Marital property is any asset you or your spouse have earned or acquired in any way while your marriage lasted, and how it will be shared depends on your state.
Separate property is a property that belongs to just one spouse while the other just moved in it. Whether the property will be considered marital or separate depends on several factors, including the state you are in.
Apart from this, there are two types of states, and what will happen with your house during divorce depends on which state you are in.
Community Property State
When you are in a community property state – such as Wisconsin – almost all assets you have earned during marriage are shared 50-50. On the other hand, if you were the owner of the house before your marriage, your house is considered a separate property and it belongs to you – although it would be the best to check with your lawyer, as sometimes your spouse may have the rights to half of the house’s appreciation during the marriage.
Equitable Distribution State
Equitable distribution states mean that assets are distributed fairly, which doesn’t mean they are always distributed equally. Who will own the most of the house depends on financial contributions, income, and many other financial factors.
Alaska is the only exception to these two state types, and it is considered as an opt-in state. In other words, before or during your marriage you can declare your assets community property and decide which of these regulations you want to follow.
What Can You Do with Your House during Divorce?
Here are several options what you can do with your house during divorce.
If you have multiple assets, such as a primary home and a vacation property, a good idea would be to agree on dividing your assets. This means that every spouse takes assets that are worth about the same amount. For example, you can take your primary home while your former partner takes the vacation property.
This is a quick way to finalize a divorce without a lawyer or waiting on your house to sell. However, you’ll still have to determine the exact value of your assets so you could rightfully agree on what to do with you house during divorce.
Buy out the other party
Another option is to buy out the other party so you could keep the house. In other words, you can decide to pay your spouse half the market value of the property you both own, so you can gain ownership. This is a great choice if you have children and you don’t want them to go through the stress of moving. Also, a good idea is to do this if the market isn’t looking favorable, as the spouse who is buying out the other party will pay less.
However, your spouse has to agree on this, and you will likely have to pay them in cash. Not just that, but now you will be the one having to pay the mortgage with a single income.
Co-own a property
If you and your spouse are ending your marriage on good terms, you can agree on co-owning the home. Both of you will pay a part of the mortgage that you agree on, and you can negotiate other terms, such as when will the spouse who remains in the house receive their payments and, in case you end up selling your home, who will get what amount. This is a practical option when you have kids but you don’t have the money to buy out the other party.
Keep in mind that if the one partner experiences financial struggles and isn’t able to pay their part of the mortgage, both partners will get damage on their credit score. Also, the former partner who isn’t living in the home may be subject to capital gains taxes if the house is eventually sold.
Make a quick sale of the house
Probably the safest option is to sell your house during divorce. Selling a house is the most common option for the divorcing couple. This way, you can simply divide the money in half and continue with your lives. At the same time, this will enable you closure and you will be able to start your life anew.
Keep in mind that selling your house the traditional way can take a while. This can delay your divorce, as most houses take around three months to sell, sometimes even more. Luckily, you can always choose to sell your house to a reliable direct buyer in Milwaukee, as this will make the process much easier. Direct buyers can close the sale fast, sometimes even in just a week! This will allow you to quickly go on with your lives. Not just that, but they will pay you in cash, so you can divide the profit right away. And if you are divorcing during COVID-19 pandemic, don’t worry, as some direct buyers, such as Sparks Property Investors LLC, are still buying houses.