One of the most common sources of conflict in a divorce, after child custody and alimony, is what to do about the marital residence. Homes, unlike many other assets, often have sentimental attached, as they may be tied to memories of better times, to kids, to your former family. Homes also represent stability and safety, which can make them an emotionally charged subject. So, what do to about the marital residence in divorce? There are three basic strategies:
The first option, and one frequently considered by divorcing couples, is to simply sell the house. This can be the easiest solution for those couples that are either unattached to the home or simply do not have the financial resources to remain in the house on their own. Selling the house isn't without some problems, especially when it comes to settling on a price. One party may believe the house is worth far more than it really is. The best way to deal with this is to delegate decisions to a real estate professional. Have an appraisal done or hire a realtor and allow that person to determine a fair asking price. Obviously, it's preferrable to defer to the experience of the professionals and avoid fighting over every specific issue with your spouse.
If one party really wants to remain in the home, another option is to buy out the other spouse's interest in it. This only works if one party has the financial ability to maintain the house after the divorce on his or her own. It also requires the couple to have a sufficient pool of assets to enable the party who is not receiving the house to be compensated in other ways. For instance, one person may keep the house, while the other may receive a larger share of retirement funds. Rather than view it as paying your spouse for the house, it may be easier to see it as merely shuffling assets around.
One other option, though far less popular, is for the parties to hold onto the home for some period of time, pending a possible sale or other future developments. This does not make sense for many families, where the friction or stress may simply be too much to bear. However, it may be worth considering in some cases. Those who are still trying to get their financial affairs in order may benefit from reducing or sharing these expenses for a finite period of time. Also, those waiting on the housing market to turn around or for remodeling to get finished can benefit from simply waiting before moving forward with a sale.
Source: “Divorce Confidential: The Fight for the Family Residence,” by Caroline Choi, published atHuffingtonPost.com.