Real Estate in Wake County continues to be a hot commodity. Currently, the Triangle is experiencing a lack of supply in single-family homes. Inventory is down, and it is a Seller’s market. The short supply of homes is due in part to the fact that new home construction is down significantly from previous times and whether or not it will pick back up anytime soon is nearly impossible to predict. With it being a Seller’s Market, couples in the midst of a divorce face important questions, “What are we going to do with the house?” “Are we going to sell it and divide the proceeds?” “Will the other spouse keep it?” “Can I afford to keep it?”
In deciding what to do with the house, consider the following:
- Do I want the house? If so, why? The answer to this question has to be explored from an emotional as well as a financial perspective. Emotionally: What kind of memories are here? Can I live here and be happy? Do I feel safe emotionally and physically? Do I enjoy the community and my neighbors? If you have children, you should consider how attached they are to the house and community. Often, children going through a divorce have much to deal with as it relates to the custodial schedule. So you should consider whether moving to a new location might be too much for your child to bear. From a financial perspective, realistically you have to ask: “Can I afford this house?” “Is it too much house for me to maintain?” When you consider the cost, don’t forget to include maintenance and perhaps even the cost of hiring someone to do the maintenance, if you are not in position to do the work yourself.
- Long-term, is this house a good investment? If like many couples, your only assets include a house and a retirement account, you have to decide which asset will provide you more security and a better rate of return. Determining future market values is a question better addressed with a realtor, but one certainly worth exploring.
- What is the current condition of your home? I suggest that clients obtain a presale inspection from a licensed home inspector. At the outset, you will have an idea as to what repairs are needed and the condition of the house. You can then decide what needs to be done to ready the house for sale.
- Who’s name is on the mortgage and can you afford the house? You should have a budget prepared that includes all of your housing expenses. Compare your house and its expenses with another house and your income (your income may very well include income from your job, child support, and spousal support if you are entitled to spousal support). To make this comparison, you need to know your total income. If both parties’ names are on the mortgage, generally, the person keeping the house must be prepared to refinance the mortgage. So, can you qualify for the mortgage? Contact a mortgage broker and make inquiries as to whether you can qualify and determine how much your mortgage would be. Divorcing not only requires separating the assets, but also includes separating your debts as well. If your spouse wants to keep the house, make sure that you get a credit report for yourself to determine what liability your name is on. You want to make sure that all joint debts are canceled or that your name has been removed from that joint debt.
Deciding whether to keep the house is an emotional and a financial decision. Obtaining assistance from qualified people can help you make the right choice.