Two thousand two was the year it finally happened. After two of the most stressful years of my life, my divorce was finally official and I could move on to the next chapter of my life. Even now, with many chapters closed since then, I can’t help but think, “I wish I knew then what I now know about divorce and real estate.”
My ex and I lived in our family home for five years. When the time came to decide what to do with the house after the divorce, our lawyers advised us to arrange for an assessment to value the house.
On that day, the house was valued at $ 700,000. We owed $ 400,000 (our mortgage), which means we had $ 300,000 in equity. Since the equity was split equally, we received $ 150,000 each.
I kept the house so not only did I have to qualify for a new loan (refinance) but the mortgage was much higher now: $ 550,000 ($ 400,000 to take on the outstanding balance plus $ 150,000 to buy my ex’s equity) .
At the time, I was neither a real estate agent nor a certified divorce property specialist. Little did I know that this plan would lead to several difficulties later. I’ve compiled a brief list of lessons learned that can help anyone sharing a similar battle.
I wish I had known about divorce and real estate:
- I wish I had worked with a mortgage lender who is a Divorce Expert (CDLP) from the start. This would have enabled me to fully understand if I could actually qualify for a mortgage as it would reduce the equity of the home (since I had to give my ex $ 150,000). In addition, no one took into account the upfront fees for a refinancing. as well as tax consequences and capital gains. Who pays for this? I did.
- Our arrangement was that I would take care of the house’s expenses and he would pay for his new rent and we would split the property taxes. Good idea? No Why did no one suggest that we have a home inspection during the negotiations? If unknown issues had been addressed I could have addressed them, but they weren’t.
- The routine maintenance around the house, yard in summer and snow removal in winter was exhausting and expensive. I also had a house and garage full of items neither of us wanted. I had the burden of selling, throwing, or donating many of the items.
Divorce and real estate can get complicated …
A year after the divorce, I put the house on the market and it sold pretty quickly. Here is the problem. Buyers asked for repairs or a $ 10,000 credit on completion. I also had to pay the closing costs, an attorney, and my real estate agent’s commission.
In hindsight, these fees should have been factored in to get a more accurate number of what I had to pay my ex-husband for the house. The point is, instead of me paying him $ 150,000 for the house, a more accurate number would have been $ 110,000.
I recommend structuring a property management agreement between the spouses so that everything is described in advance. This becomes an invaluable tool as the stress tends to increase as a divorce progresses.
My story is part of the reason I chose to become one Real estate agent and a Certified Divorce Property Expert. I have worked in Chicago and the suburbs for 17 years and have personal experience of getting divorced. I have a passion for helping people achieve what is fair and accurate about divorce and real estate.
Do not get me wrong. Your divorce attorney could be wonderful, and your real estate agent could be great too. But there is a difference in hiring someone like me and that has to do with my divorce property training. In many cases I work as a neutral third party to get the most money for my customers in the shortest possible time.
I was trained to know what questions to ask, what variables and hidden costs real estate includes, and what laws apply to divorce and real estate.
In conclusion, divorce is difficult enough without the financial burden on a couple. One of the hardest things in this regard is when one or both partners walk away thinking that their agreement is unfair. I know this feeling, which is why I am here to take this opportunity away.
I would love to help you or at least be a part of your trip. Call me, even if you just have a question or need information.