Should We Sell the House?

In the event of divorce, issues often arise with regard to the marital residence. In many cases, one spouse wants to keep the marital residence and must buy out the other, which can be accomplished by refinancing the existing mortgage and placing the new mortgage in the sole name of the spouse who is keeping the home.   In other cases, the parties must sell the property either because neither spouse wants to stay in the home or because the cost of maintaining two homes is impracticable.

In both of these instances, issues will likely arise.  For example, what happens if the house won’t sell?   Absent an agreement between the parties, the court may ultimately force and oversee the sale of the property, regardless of the parties’ wishes, or a court could order that the house be put up for auction. In either scenario, the homeowners may take a big hit on the sale price.  In instances when a party tries to refinance the home in order to buy the other party out, it may be difficult to get the bank to allow the mortgage refinance, particularly when one party is not working or there is not sufficient equity in the house to justify the refinance.

Alternately, the parties may agree that although only one of them will continue to reside in the home, it is in their families’ best interest that they continue to jointly own the home until a date certain, such as a child’s graduation.  In those cases, the agreement should set forth a process the parties will follow when the time is ripe so as to avoid future disagreements over issues such as how they will select a broker, listing price and future reductions.