The decision to sell your family home can be an emotionally draining, time consuming and hectic process to put yourself and your family through. The decision to get a divorce can be an emotionally draining, time consuming and hectic process to put yourself and your family through. The decision to sell your family home and get a divorce at the same time can be…well, you get the idea. Doubling down on difficult, sometimes long, sometimes expensive and always emotionally draining processes can be the right thing to do but it is never easy.
The majority of our clients going through a divorce own a home with their spouse. Assuming that the home was purchased during the course of your marriage to that spouse it will be a part of the community estate during your divorce. Thus, it is eligible to be divided between you and your spouse in some form or fashion. Often times, spouses come to the conclusion that it is best for all parties involved to sell the family home as a result of going through with a divorce.
Your family home represents not only the largest investment and asset that you and your spouse own but also is the site of Christmas celebrations, birthday parties, kids’ sleepovers and many good memories. These memories make it difficult for many people to part ways with the family home despite that being the most logical decision to move towards. If you and your spouse cannot agree to sell the home in a situation where it is “too much house” for one you (either in terms of size or mortgage payment) a judge may have to make that decision for you and order that the house go on the market.
Often times, the best reason to sell the family home is just wanting a fresh start. Along with those happy sort of memories that I mentioned a moment ago are memories that are less pleasant. Even if you can afford the mortgage and even if the home is something that you value, it may still be a good idea for you to move on from it if you cannot separate the house from your past marriage.
Whatever circumstances you find yourself in, I think it is worthwhile for you to be able walk through an analysis of the issues surrounding selling your home during a divorce in Texas. The problem with this topic is that you can get a lot of different opinions on the subject but very few of them consider all of the relevant elements of both divorce and selling a house. Fortunately, the attorneys with the Law Office of Bryan Fagan are equipped to present a comprehensive discussion on this subject with you today.
Are you stuck in neutral, or worse- reverse, during your divorce?
Since you started contemplating divorce or were served with divorce papers from your spouse, have you struggled with how to move forward? If so, you would not be alone in feeling this way. I think a lot of people in your position feel the pressures of divorce and then start to get overwhelmed with how to proceed. Add in stresses associated with your kids, bills, work and what to do with a house and you have a pretty tough situation to walk into.
Paralysis by the analysis is a way of saying that you feel like you can’t move one way or the other because you spend all your time and effort on trying to think about what your options are. If you can’t make up your mind on which direction to go with your case and your life then you won’t be able to make a definitive move one way or the other. This is true during a divorce case or during any other time in your life.
What you will find in a divorce is that sometimes your spouse or the judge will force your hand and propel you in a certain direction. The need to start fresh, pay off debt, or find a new place that you can afford may all be relevant considerations for you to make during a divorce. If selling the house is the main issue you are concerned with then I suggest that you keep in mind the following tips and tricks when it comes to selling a. house during your Texas divorce.
Don’t underestimate the difficulties associated with divorce or selling your family house
As we have already mentioned, very few people make it through a divorce and the selling of a home without looking back and wondering what they could have done differently in order to have made things a little easier for themselves It is common to experience a stress overload during the divorce and even more common to experience stress associated with selling a house during the divorce.
The trouble is that you own that house along with your spouse. So, you are having to coordinate the selling of your most valuable asset with a person that you are not on the best of terms with. If this sounds like a combustible situation then you would not be incorrect. If the circumstances of your life line up where it is best for everyone to sell the house during a divorce then you will need to be able to work together with your soon to be ex-spouse on how to do this.
Sometimes just making a decision with your spouse can be enough to cause you to feel less stressed out. If you have children then you are going to be concerned with their well being above everything else. Knowing whether or not you are going to be selling your house can make it easier to talk to your kids about their future and where they will be living after the divorce. Remember that your kids are going to be going through a transition just like you will after the divorce finishes up.
Financial elements will impact decision making associated with deciding whether to sell your house
I think the most obvious and logical place to start when determining whether or not you need to sell your house during or after a Texas divorce is whether or not you can afford to pay the mortgage on only your salary. The same question needs to be asked of your spouse, as well. Usually you and your spouse will apply for financing of your house together based on each of your incomes. It would not be uncommon for neither of you to have a salary that would allow you to afford current mortgage.
Next, I would recommend that you all look your overall financial picture to see if the house fits into your new reality. For instance, even if you can pay the mortgage based solely on your salary you need to consider whether or not it will cause you to win in the long term. For instance, if your mortgage payment represents fifty percent of your take home pay each month then that leaves you very little wiggle room to save for retirement, your kid’s college, or pay down other debts. That is a recipe for treading water, at best.
At worst, not selling your house in order to maintain some degree of normalcy may set you back years and years in your emotional and financial growth after your divorce. Consider what would happen if you decide to remain in the house and the hot water heater and the air conditioner were to break down in the same week. Where would you get the money to make those repairs if half of your monthly income is going towards paying a mortgage? You would be in a tough position. Anything that can go wrong often times will go wrong when it comes to circumstances surrounding a divorce.
Let’s flip the situation for a moment. Conisder this situation if you are a father whose three young children will end up living most of the time with your ex-wife. You very much want those kids to be able to remain in the house where they grew up. Against your better judgment, you make a decision to allow your kids and your ex-wife to remain in the house. One concern that you had was that your ex-wife is only earning around $30,000 per year. Even with the assistance of child support you know that she does not have much wiggle room in her budget.
On top of that, she is the party (at least under the orders of the divorce decree) that is solely responsible for the mortgage. It is ordered that she is to make all payments on the mortgage in exchange for being able to stay in the house. You were paid your equity stake in the house out of other property in the community estate so you are all set to go, right? Wrong. Let’s see how the decision to allow your ex-spouse to remain in the house could be a bad decision.
Selling the house is stressful, but remaining in the house could be worse
Suppose that your ex-spouse loses her job and can no longer afford to pay the mortgage. It would be one thing if you were no longer liable on that mortgage, but a divorce has no impact on that. This is true even though your divorce decree specifically states that your spouse is 100% responsible for paying the mortgage. Unfortunately the divorce decree has no impact on your legal responsibility under the note. Whatever lender holds your note will be looking to you for payment on it regardless of whether or not your divorce decree states you are off the hook.
Imagine how upsetting it would be to ignore your gut instinct, allow your ex-spouse to remain in the house, you move out and then your ex-spouse doesn’t pay the mortgage and the foreclosure timeline begins. That is a situation that many parties like yourself find themselves in after a divorce. What can you do to avoid putting yourself in this position where you hold only liability and derive no benefit from the house any longer?
What I recommend that clients do in this situation is to execute a Special Warranty Deed which transfers your ownership portion of the house to your life. This way you legally make it so you can no longer enter the home without the permission of your ex-spouse. That may make your spouse feel more at peace.
As far your liability under the mortgage there are a couple options. The first is one that involves your ex-spouse applying to refinance the mortgage. The trouble is, even if your spouse agrees in the divorce decree to go a re-finance, there is no guarantee that she will be approved for one. If she either applies and is denied, or never bothers to apply, this puts you in a powerless position if she ever stops making those mortgage payments.
To combat this situation your spouse should sign, file and deliver to you a Deed of Trust to Secure Assumption. This deed of trust to secure assumption is your protection against foreclosure due to your spouse’s failure to pay the mortgage in full and on time. It allows you to foreclose upon your ex-spouse and take over the mortgage in the event that she is in default. Again, this may not solve all of your problems but it does allow you to protect yourself to a certain degree.
Questions about divorce and selling your home? Contact the Law Office of Bryan Fagan
If you have any questions about the material that we shared with you today please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week where you can ask questions and have your direct questions answered in a comfortable and pressure free environment. We hope that you enjoyed today’s blog post and that you will join us again tomorrow.