Many couples wonder what to do about the house when they decide to get a divorce. Who will keep it? Do you want to keep it? Generally, if you want to keep the house you are going to have to ‘buy out’ your spouse. What this means is that you’ve got to pay an equal amount to their interest in the house. Now, most people don’t have money to throw around and buy someone out. This is not a cheap process. One way to do this is to refinance the house; to do this, you will have to put it in your name only. The first thing you should do then, is figure out what your share of the equity in the home is. To figure this out, you’ve got to figure out the value of the house, then subtract the mortgage balance you have left on the home, and then calculate how much you owe on the remaining equity of the house.
So how do you value the home? Well, the way to do this is to find out what the home would cost today. Sometimes, the couple will agree on an amount. Then, they can look at traditional websites like Zillow or Trulia which can give some comps which will help them determine what its worth.
Probably the best route to go here is to hire a realtor to help you figure out what your home might sell for today, as they have access to more recent comps than do websites. Although they are somewhat reliable, they are not always exact, and often are outdated. You then must include the value of the house in the divorce settlement; you must be sure that the number you come up with is “fair,” as it can get pretty messy in the lawyer’s office, fighting over the numbers.
So, what happens if you disagree on how much the house is worth? Well, if both cannot agree on the value, a professional real estate appraiser should be contacted and brought out to inspect the house. Hopefully, the two of you can at least agree on which real estate appraiser to use, but if you can’t, you can both hire your own when you go to court and let the judge be the judge. To figure out the mortgage balance, just contact your lender and they will let you know. When it comes to your ‘share of the equity,’ this will vary depending on state laws. Each state is different, so it will depend on that, and the judge. Some of these factors may have to do with whether the house was purchased before the marriage with separate money, whether the house is covered in a prenup, any improvements in the home that one spouse paid for on their own, and many other factors.