Divorce can be a significant life change, and if real estate is in the picture, that change only becomes more complex. Every situation is unique and at Malfer & Associates, we understand the emotions and logistics involved. Our team of expert real estate agents are here to guide you through each step with grace and security. Here is our straightforward look at how to handle real estate during a divorce. These include some options to consider and steps to ensure you make the best decision for your situation during this difficult process.

1. Assess the Current Value of the Home

A crucial first step is getting a handle on the current market value of your home. Knowing this valuation is the foundation of any decisions you have moving forwad. We recommend hiring a professional appraiser that can give you an unbiased, accurate valuation. Additionally, working with a real estate agent can provide insights into your local market. A real estate agent can get a look at what similar homes are selling for an even more informed decision. An accurate appraisal lays the groundwork for making decisions about your upcoming division of assets.

2. Consider Your Options for the Property

In the midst of a divorce, things can seem up in the air, but it is important to know your options. Divorces result in three primary choices when it comes to real estate division: sell the home, one partner buys out the other, or co-own for a period of time.

• Selling the Property: This can be the most straightforward choice. If both parties are looking for a fresh start, selling the home and moving on can be quick and direct. The real estate agents on the Malfer & Associates team can list your home and you can divide the proceeds once it’s sold.
• One Partner Buys Out the Other: If one person wants to keep the home, they can consider buying out the other party’s share of the home. This option works best if one partner has the financial means to cover the cost or qualifies for a refinance in their name alone.
• Co-Owning Temporarily: In some cases, couples choose to retain co-ownership for a specified period of time. This is especially prevalent if the couple has young children. This provides stability for the children while also allowing the property to appreciate further, potentially increasing future equity for both parties.

3. Determine How the Mortgage Will Be Handled

If there’s a mortgage on the property, it is essential to discuss who will be responsible for future payments. Generally, the person who wishes to keep ownership of the property will refinance the mortgage in their name alone. If you are both choosing to sell, it is vital to ensure that the mortgage is paid off with the proceeds to clear any shared debt.

4. Update Ownership Documents

If one side decides to keep the property, they must update ownership documents like the deed and mortgage. Request assistance from your lender while refinancing to remove the other side from both the mortgage and deed. Malfer & Associates recommends working with an experienced real estate attorney to ensure these updates are completed accurately.

5. Prepare for Tax Implications

Divorce can be expensive and real estate transactions during a divorce make up for a lot of that as it can have significant tax implications. Sit down with a tax advisor to understand capital gains taxes, tax exemptions, and deductions that may apply throughout this process. For example, selling your home may provide capital gains exemptions if the property was your primary residence for at least two of the last five years. Knowing these details upfront can help you avoid unexpected costs and potentially save money in an already expensive situation.

6. Consult With Experienced Professionals

Malfer & Associates understand that divorce is often an emotional time, and navigating real estate decisions can be complicated without the right support. We recommend working with a team of experienced professionals, including a knowledgeable real estate agent, financial advisor, and legal counsel. A team like this can help you understand your options and make thought out and informed decisions.

7. Take the Time You Need to Make Informed Choices

Finally, remember that it’s okay to take time to make these decisions. This is a stressful time and your home is likely one of your most significant assets. Take your time and ensure you make the best decision for your situation. Rushing through the process to get it over with can quickly lead to future regrets.

Navigating real estate during a divorce can feel overwhelming, but you don’t have to do it alone. At Malfer & Associates, our team of real estate agents is here to provide compassionate support, answer your questions, and guide you through each step of the process. We are dedicated to making this transition as smooth as possible and help you make the best choices for your future.