Future sale of jointly own home in SA-->?


#1

Hi,
I can’t thank you enough for this Forum!!! I’m so grateful to be able to ask Q’s. The pieces are coming together; it’s so comforting and we’re started to see our way through the fog… there’s a light out there that we can see! And this forum helps to clear the fog.
Again–about my daughter’s separation. It seems STBX intends to keep the house and daughter says he was offered better job (that right b/f the separation) and so maybe he actually (who knows?) CAN afford to pay the mortgage alone. The DV judge decreed they can only text about bills and their daughter.
OK, so… here’s the Q (and I did look over the PDF download of the example Separation Agreements from Rosen; great! but there is no example of this situation).

He can’t afford to buy her out of the mortgage and one would highly doubt if he could get a loan and purchase the house himself. We don’t know if there is any real equity in the house now–and don’t know how you’d figure that out; maybe calling a realitor and asking the current market value–? Is that feasible or is there a better way? Like they each make phone calls, get an idea of the market value currently and then agree upon a figure and enter than into the separation agreement to be payable to her at a future time when the house is sold? That seems a bit risky but he has no $$ to buy her out and I doubt he can get it refinanced (with the state of the economy, etc.)

My thought here being this–if this could be determined… what her current share of the home equity (if any) was/is at the time she separated (3 wks. ago)… would it be in her best interest to put in a separation agreement that he assumes mortgage and she remains on the mortgage retaining the right to force the sale if he defaults and that if or when the house is resold, that he THEN pays her a share of profits? Or that in 5 years she has some right to claim equity by forcing him to take out a 2nd mortgage to pay her or something like that??? Or is that whole scenerio not a good idea?

The point being, he can’t buy her out even if he wanted to (they’ve been living paycheck to paycheck) and i dont’ think he could qualify for a loan to purchase the house … nobody would do that deal since they have some late payment history.

He did call the mortage holder and is catching up on the payments— or so he text to her phone. She can see online if he has made payments and the truth about that will soon be known.

How is that type of scenerio worded in a separation agreement so that she doesn;'t loose any rights to money if/when the house is sold?? I feel pretty certain that he does want to keep the house, knowing him–he really needs a garage to work in and for him, apartment living would make him crazy. In order to rent a home with a garage it would be as much as the current mortgage and this is why I believe strongly that he will actually try to keep it and with the new job may actually be able to do that.

Meanwhile, back at the ranch…

What is the best advice for my daughter or how do other people handle this type of scenerio as far as putting it in a separation agreement and keeping her from taking any kind of possible loss (if there actually ‘is’ anything to loose)??

Thanks for any input or guidance!
Concerned Mom22


#2

An appraisal is the best way to ascertain the fair market value. Mortgage assumptions are typically no longer offered by the banks and the only way to a party removed from the same is upon satisfaction of the Mortgage through sale, or a refinance by the other party.
Your ideas leave a lot to chance, and leave the parties financially entangled.


#3

Thanks so much for that reply! now that we know that the appraisal figure is the key to the home value rather than market value, that saves me having to call a slew of realtors and go down that path; so thank you.

Yes, looks like she may have to live with that entanglement… personally, I’d like to whack off his head, but unlike me, she doesn’t want to be a bitch, she says (her words).

How about this? She has the latest appraisal and can’t remember the exact amount at the moment (she’ll find it in her pile of paperwork), but let’s say it was like maybe only a few thousand dollars or say like 5K or 7K over what they paid for it… and I assume that’s how it’ figured, right? Purchase price of home -minus- current appraised value = equity. --?


She would fairly be entitled to what the total amount financed on the house was + or - the current appraisal = amount /divided by 2.
Is that about how it’s done? It’s what makes most sense to me, but i wanted to ask you. (does interest figure into it or can it be a clean simple math equation?) I guess it could be if both parties agree to it, but I wanted to ask is this how it’s normally done? /and by the way, we hope the current appraisal is on the + side and not on the minus side! :slight_smile:

and keeping in mind that there’s only this house and car… if she can equal out the monies so that she gives him her equity in the house (determined by the county appraisal at the time she separated) and furniture and he signs off on the ownership of the car to her… and this equals out to a rough even exchange that he agrees to or agrees with, can she write up something in the SA like,

“wife agrees to relinquish her claim for her share of the $___ equity of the home as it was at the time of separation and husband owes her no money for her share of equity and husband will keep (to be listed) home furnishings that equal to a total value of $xyz. In exchange, husband signs off on or releases all of his claims to the 2008 Toyota which becomes the sole property of wife.” --?

Now obviously she is STILL not going to be off the mortgage, but if she (not wanting to be a B___) would also add to that separation agreement something like,
"Husband-x agrees to keep up the mortgage payments and all maintenance on the property and if he defaults on the mortgage loan for over 30 days in arears, wife reserves her right to force the sale of the home." … what about that?

There seems like there should be a further stipulation in there for a review of the market value of the house again in 5 years or 10 years or something and at that time revisit the situation again somehow. I’m sure this has happened with other couples and there must be some way to handle this situation somehow that is fair to both and protects her from taking a loss that she didn’t see coming. (of course, I’m thinking what happens if this guy holds onto the house until the day he dies?) Well, I suppose it wouldn’t matter as long as he’s kept up the mortgage and it hasn’t affected her credit.

I know there’s a solution here… somehow something that is fair and just… they do have a child together and will still be entangled that way forever more anyway… no getting around that one! They are ‘parentally’ entangled and may as well be financially entangled with the house too. When there’s a child involved, there’s no way to make a clean break anyway. But back to the point, there must be a stipulation or a ‘best case scenerio’ in how to set up some level of protection for her which is fair to both of them… since as you say mortgage assumptions are no longer available. By the way, thanks so much for that valuable info too! May you be surrounded by Angles day and night always in their loving light!

If she puts something in the SA about 5 years down the road reserving her options to renegotiate the terms of the SA regarding the house, would THAT work or is that how other people do it? (maybe in 5 years he banks will change their minds abut the assumptions–anything’s possible–or he will be in a financial position that is better for a refinance.)

What do the Rosen attorney’s think about these possibilities? How do other people in this same situation handle it?

Any input at all is appreciated very respectfully…
Kindly,
Concerned Mom 22
PS–she’d be writing to you herself and is perfectly capable of doing so but works during the day and then has her daughter and nephew to prepare dinner for; then baths and homework and then to bed and up to do it again. She’s discussing it with me and I’m trying to help her find answers since I work from home and have a little bit more time than she. And really thank you again.


#4

She is entitled to one half of the equity as of the date of separation, meaning the fair market value less the mortgage balance owing at date of separation divided by 2. The purchase price is not part of the calculation.
The parties are free to agree to whatever division they wish, and may memorialize that in a Separation Agreement. Assisting in drafting language, and reviewing proposed documents are beyond the scope of this forum.


#5

Okay, thank you. Purchase price not part of the calculation–that’s good to know.

Yet, you wrote “fair market value” but before you said “appraised value”— do you mean these are the same thing? she was recently sent an appraisal from the county… i assume this would be used? if “fair market value” and “appraised value” are one and the same?

It sounds like “fair market value” would be a figure you would get from calling a realtor to determine.

I’m confused Erin if those two terms are innerchangable?-- is “appraised value” and “fair market value” the same thing?

and by the way, the $199 for one month of consultations via phone and email, etc. by a Rosen attorney to go over the languaging or wording regarding the house equity, etc. and the entire separation agreement would be what we’d do. So in the $199 for a month, a Rosen lawyer would do that, right?

thanks kindly


#6

An appraisal is used to determine fair marked value, it is not the same thing as the county tax assessment.
The DIY service does not include document review.


#7

Ok, you lost me there. I apologize. But I don’t know what … oh, DYI service… that’s the unlimited calls and emails to a Rosen Attorney?
Well, then can she ask over the phone… read the SA segments aloud to the attorney and ask about it by phone or email. I mean, just the segment about the house and any other part?

On the appraisal then… how does she get that? Pays for an appraisal or secures the services of an appraisal company? Who does the appraisal? Can you give me a lead or how that’s determined?


#8

The DIY service does not include telephone communication, but does include email correspondence. Document review is not included, though specific questions will be answered.
An appraiser can be contacted to appraise the house, you can find an appraiser in the yellow pages.


#9

Yeah, okay. I checked into that… appraisers for that purpose are approx $325 I was told. We got a few market value estimates on the house and according to those, their upside down in the mortgage. Ok, so the DYI service is only emails? I could have sword that I read somewhere it includes phone calls too–my bad then.
Is the attorney advising on the DYI really going to bat for the client’s interest or just answering questions based on the law like here on the forum? How involved does the legal advisor actually “get” for $199–?
Wow, this whole thing goes up and down from day to day. I thought that $199 deal was going to be the answer for us, but now I’m not so sure. Is there a link you can provide that includes detailed information about this DYI service… what do the intials DYI mean?
Sorry to be so ignorant of these things… it took me a week to figure out what STBX meant… just trying to catch up and keep up.
Can you fill in those two blanks for me/us>?
thanks so much


#10

No, the DIY (do it yourself) service does not include phone communication, and it is not a traditional form of representation. The client’s do things themselves and get help with specific questions along the way. They have access to a form library with sample documents they can use as examples. It is not akin to traditional representation which, based on your posts regarding your daughter, I think she really needs.


#11

Ok, so this may be a stupid question… i plead ignorance, knowing when it comes to this stuff I really am–ignorant. First, there was a sort of synchronicity this morning when I caught the tail end of the Rosen radio show. LAst night I was thinking OMG I have two other daughters, non-married and my advice to them is to NEVER, EVER do that (get married) because once you’re in–it’s like trying to scratch through concrete with your fingernails to get out! I was thinking to myself who the heck makes these laws and makes it all so difficult??? and Mr Rosen seemed to answer it on the radio show… the attorney’s make most of the divorce laws, he said. (feels like a conspiracy from the fringe-people perspective where I’m looking at it.) I got divorced myself (non-contested, 20 yrs ago) and it cost $600 and the lawyer handled all the paperwork; and then sat in a quaint little room with a judge and few others and my husband. Judge asked why do you want divorce? We grew apart I said, then… Okay, done and done–took 10 minutes tops. Pardon the mini-vent, let me get to the question…

It seems there’s a “going rate” for a person get a lawyer to help them in this divorce process-- on the Rosen website, no matter which service button you click on, it comes up $7K. The pro-bono (sp?) lawyer who helped my daughter in the domestic violence hearing told her she’d handle the divorce and all that comes with it for $3,500 now and the rest later–same elsewhere. So, everyone seems to have the same set rate locked in; after checking 3 sources (including Rosen), and getting the same amount of $7K, that ended my poll/research.

BUT and here’s the Q, there MUST BE some sort of cut rate or slash rate just for advice. The DYI thing won’t work for her… while i have time to email and post here asking Q’s for her and do whatever research that I can… she works 40 hours a week and can’t be emailing and phone calling at work. And her nightly routine with her daughter… dinner, bath, homework, etc. and bed by 8 or 9. She can take a designated time off from work to handle things–my self assigned job is to help streamline that and save her the time doing research so she can make best use of her time. Anyway… getting to the question…

Aren’t there some attorneys (and what’s the diff between a laywer an attorney anyway?) who will see her once or twice, and give her some guidance and advice on how to handle the house and car?
OR (and please understand i do not know how this works!) do all attorney/lawyers stick together on this and say like, "Its 7K or go away!?) If i get on the phone and start dialing, am I likely to find a lawyer/attorney who will give her counsel in person that is going to help her know what to do on the house and car? (they don’t have business and big bucks or real estate in 10 countries–its only and house and a car in both names–should be pretty simple).

bottom line… is it likely that for $200 or $300 she will find an attorney/lawyer anywhere on the face of the earth to tell her what to do in these matters that is in her best interest? She can file the forms herself but just needs someone who knows the laws who can help drill through the concrete! --sorry to sound frustrated but I really thought the DYI was going to be our answer, but i can see that it isn’t.

thanks


#12

There is no difference between a lawyer and an attorney- just two different words. I can’t speak to what other lawyers charge, but we only work on a flat rate system. There may be some lawyers that will allow your daughter to pay by the hour for a few meetings.