Keep the House


#1

My STBX has suggested I keep the house and he take one on the brokerage accounts, which are currently valued (e.g. Equity in the house) about the same. Is is a wise financial move to choose the house?


#2

Be very careful about doing that in this real estate market. While you may think you have equity in the home on paper or by looking at comps, it’s just a very weird market right now. If you know you want to stay in the house for more than a few years, it’s probably safer…but if you know you’d be selling soon, it’s risky to assume you can get equity from your home.

I took the house in my divorce with the intention of selling. Realtors, based on comps, suggested a listing price of 575k (conservative). It’s now a year and a half later and we’ve dropped to 489k and still can’t dump the house.

His accounts are solid and real money and your home is not a solid guarantee of any kind of equity…be careful!


#3

I can’t say for sure whether this is a good deal for you or not as I do not know all the facts (condition of the home, your financial needs, ect).


#4

Understand. The home is in the Radbourne subdivision. Purchased for $390, current ‘on line’ appraisal at $350. Needs some cosmetic updates, but has new roof and is good condition. I would probably stay in the house for at least another year, of course it could take longer than that to sell it.


#5

doesn’t seem like there’s much, if any, equity in the house.

You didn’t say how much is owed on your mortgage. If you bought at 390k and its online appraisal (and these are still way too high for the current market) is 350k, you’d have to have put a lot down on it to protect yourself.

Realistically, if you needed to sell, you need to be prepared for the reality that it is probably worth 300k or less right now…and the market is still going down. There are so many foreclosures and short sales out there – these are what you are competing against when you try to sell.

Personally, I would split the retirement account, put the house on the market – and whatever profit or loss the house yields, would be shared equally.


#6

Good information. The mortgage is $135K and if the house would sell for $300K, then minus realtor fees fees, there may be $160K in profit. IF the house sold, which in this market, is a gamble.

I assume your advice still stands?


#7

Yes, without a full financial analysis, I cannot advise you whether you should keep a particular asset or not.


#8

My STBX has decided to take the house. In order to remove myself completely from rights and responsibility for the house, I know he needs to refinance the mortgage, but, is it also necessary to do a Quit Claim deed or Interspousal Transfer?

What is the difference between and Quit Claim Deed and Interspousal Transfer?

What is a Memorandum of Separation Agreement? I will be using my portion of the equity in the current house to purchase another house, prior to the divorce. Is a Memorandum of Separation Agreement necessary?


#9

Yes, you will need to Quitclaim the home to your STBX before he can refinance. He will need to own 100% of the home before he can assume 100% of the mortgage debt thereon. I do not know what an Interspousal Transfer is, other than it is likely another way to say that one spouse will quitclaim his/her ownership in the home to the other spouse.
A memorandum of a separation agreement is a short form of your Separation Agreement which is recorded at the register of deeds, and notes on the public record that you are separated. You either need to have a memorandum of Separation on file with the ROD of your county, or a Free Trade Agreement if you are not divorced at the time you plan to close on the new property.