Your biggest asset
When you and your spouse divorce, it seems that you spend a lot of time trying to figure out who gets what and how to end this period in your life.
One big aspect of divorce and property is selling your assets.
The largest asset is probably your home, and it’s not something that’s usually sold within a few days. Before you attempt to sell your house, you should understand what you need to do to make the process go as smoothly as possible.
Selling the place where you’ve spent the last years of your life is often an emotional task. It becomes even more so in the midst of yet another emotional situation – a divorce. The home is also one of the largest symbols of your life together, which has now ended.
As you embark on a new path, divorce and property is one of those challenges you must conquer to start over separately.
Protect your property rights
Selling is not the only option for your home if you’re getting a divorce.
You may have the option of keeping your home if you can speak with the other party and come to a reasonable solution. If you have children, one person may want to continue living in the home with the children so that it doesn’t uproot their lives any more than necessary.
This can be a smart decision as long as you are able to work things out with your spouse and put it in writing to protect yourself and your future.
Your options for the family home in a divorce
Sell the home to another buyer:
The proceeds could be used to purchase a home for each party.
One person sells their part of the home to the other:
The other person would continue to live in the home.
Keep the home as it is with joint ownership:
In this case, one person would most likely live in the home with the children until they move out. The home might then be sold at a later date. Part of the value of the home may be transferred to the other person as a portion of the settlement. When the home is sold in the future, the person will receive a percentage of the price as their interest.
Another option is the Martin order, which acts similar to the Mesher order, both can be read about further here. The main difference is that with the Martin order one person is given permission to stay in the home for the duration of their life or until they remarry.
The Mesher order is often used when young children are involved, while the Martin order is seen when a couple is childless or has grown children and one party doesn’t need the money from the sale for their own living expenses.
An immediate sale for the home is often considered to be best when there’s enough equity to provide new housing for both parties or when one person has already found new housing and the proceeds from the sale will take care of the other person.
If the mortgage cannot be maintained by one party, selling may be deemed to be the best alternative.
In some cases of divorce and property, divorce may be delayed if one person doesn’t have the funds to buy out the other. They may agree to remain separated until such a time as the one person can purchase the other party’s interest in the home.
This situation works best if both parties are dedicated to contributing to the mortgage and other expenses to maintain the home.
A separation can last months or even years until the required price has been paid to release the other person from the responsibilities of the home.
To delay, or not delay?
When you should delay the sale of your home:
When you have young children and need a place to live
When you can’t afford another home
When the other person has a place or enough money to afford a new home and is still willing to contribute to the mortgage on the family home
When you shouldn’t delay the sale:
When you can’t afford the mortgage
When you don’t have children at home
When you want a clean break with a new place to live
You want to protect your rights to your home until the divorce is finalised. What you do may depend on how the house is owned
The court's decision
When it comes to divorce and property, the court has the right to decide the disbursement of the house if you cannot come to an agreement with your spouse or if it feels the decision is not in the best interest of the children. If there are children from the marriage, the court will always take their needs into account.
Other factors that will influence the court’s decision include the following:
Income of each person along with any other property owned or other resources
Financial needs and expenses of each party
Standard of living for the family prior to the divorce
Age of each person
How long the couple were married
Physical and mental disabilities of either person
Contributions of each person to the marriage and family
The court doesn’t require you to do an even split in a divorce in England and Wales, which means the decision may be made based on each person’s needs and contributions.
Divorce Advice: Who Gets The House?
You have several options here:
Your spouse owns the property alone
If the home is owned by your spouse, you can apply for a matrimonial home rights notice in England and Wales – as long as the home is registered. This ensures you will be notified if your spouse takes out a second mortgage or tries to sell the house without your knowledge.
The home is owned jointly with both names on the deed
If both of you own the home, you may be joint tenants or tenants in common.
Tenants in Common allows one person to own more than 50 percent of the property. This designation also allows you to choose who will receive your portion if you should die.
With Joint Tenants, the other part automatically goes to the survivor if the one person dies.
You may want to switch your ownership from joint tenants to tenants in common if you’ve decided to divorce.
This ensures your partner doesn’t get the home automatically if you should die before the divorce is final.
The home is owned by someone else
You’ll want to continue to make the payments on the home while you are in the process of divorcing. If your spouse won’t help and you can’t afford the payments, you should contact your lender. You may be able to receive help with the payments.
Let your lender know ahead of time that you’re getting divorced, which they can note in the file in case one person fails to pay their portion of the mortgage.
Decisions: What to do with the matrimonial home?
For many, divorce and property is a difficult decision where emotions are involved. You should consider several factors and not let your feelings rule.
Some things to look at include the following:
Your savings and income
Any assets or investments you have
Equity in your home and a reasonable price to expect for the sale
Whether your spouse would be willing to buy your half or sell their half
You should be prepared to prove that you can provide adequate housing for the children without remaining in the family home if you’ll be the primary caregiver. Adequate housing doesn’t have to mean the same standard of living as what you’ve been enjoying, but this aspect will also be taken into account by the courts.
What's the property worth?
You might want to take the time to value your property to know what it’s worth in the divorce.
You can get a report from a local surveyor, estate agent or a private home buyer. Once you have this report, you can compare it to what you owe on your mortgage to determine how much would be left to split between the couple.
If the home is mostly paid off, the proceeds from the sale could be enough to give each party a new start.
However, if the expected sale price is not much over the mortgage balance, it may not be enough to help someone get a new start if they don’t have income to cover rent or a new mortgage. It may be a good idea to consult with a financial adviser who can help you see the facts about the process of divorce and property and selling a home with no emotional attachment.
When you do decide to sell
Selling a home may not happen overnight.
It can be even more difficult if the parties don’t agree. As a divorced couple, you may not agree on the list price, the estate agent or cash buyer to work with or whether to accept an offer. Each time there’s a decision which cannot be made together, it delays the process.
Ideally, you’ll agree on working with a private home buyer or estate agent and leave many of the decisions with them. Follow their advice on offers and other issues in the transaction to help it move along more smoothly.
Will you work to fix up the place and make any improvements or repairs your estate agent recommends to get top price? If not, will you be interested in working with a cash buyer so you can sell faster, even if it’s for a slightly lower price?
These are topics you should discuss with your spouse to help ensure there are no delays once you list the home.
If you can’t talk to your spouse without arguments, you may want to consider mediation where a third party helps you come to a reasonable solution. Otherwise, you may have a home that sits on the market for months without selling. You may also end allowing the court to decide, which may not be in your favour.
Children come first
To help you focus on what to do with your home, consider what would be best for your children. They may prefer the familiarity of their home when everything else is changing. On the other hand, a clean break may also be what’s best for them.
With the stress that comes with selling a home after a divorce it can be easy to forget the feelings of children in this situation. This poignant video highlights this.
Voice of the Child of Divorce:
Your home is likely your largest asset, and it comes into play during a divorce settlement.
If you and your spouse cannot agree on the disbursement of the home, the courts may do the job for you. You should consider your needs, the needs of your spouse and most importantly, the needs of your children.
Don’t let your past hold you back when it comes to the family home. In the process of divorce and property, make a decision that will help both of you move forward and start on a new journey as you decide to sell the home and find new places to call home.