Selling or Keeping the Family Home during Divorce?

Selling or Keeping the Family Home during Divorce?

California is a Community Property state meaning that during divorce, all community property, which is anything acquired during the marriage, is divided equally between the spouses.  This includes all income, earnings, assets and investments acquired during the marriage but does not include gifts or bequests.  In many marriages, the family home is community property and subject to division between the spouses.
Deciding whether or not to sell the family home during divorce can be a complex issue for divorcing couples.  Because of the significant financial consequences to both spouses, issues such as who has the right to retain ownership, who has the right to retain possession, and who has the right to make selling decisions if the home is to be sold often arise.  One or both of the spouses may still be living in the family home and there may be a myriad of personal and economic intricacies affecting decisions about what to do with the home.
There are numerous financial considerations to make including the current state of the real estate market.  Changes in market conditions, mortgage terms, equity positions and tax liabilities may all complicated the situation making it even more important to work with a real estate professional versed in family law.   There are also emotional considerations to make based on the sentimental value that is attached to the home both for the spouses and also potentially for their children.  Acknowledging these emotional hurdles is helpful to the process by keeping open communication and understanding between the divorcing parties who both will benefit by working out their differences.
Unlike most situations outside of divorce, the parties in a divorce who co-own the house have divergent interests and may have different goals regarding their real estate.  In all divorce cases in California, automatic temporary restraining orders are issued at the beginning of a case which prohibit either spouse from selling any real property without a written agreement or Court Order.  It is important that your Realtor be familiar with these family law processes to be able to assist you in navigating the legal hurdles necessary to sell community property.
All within the confines of your divorce case, your family law experienced realtor will be able to assess your property’s value, get your home listed on the MLS, market and stage your home for potential buyers and navigate negotiations with potential buyers.  When you enter into a purchase agreement, your family law realtor will continue to navigate you through escrow in compliance with all the requirements of your family law case.
In some cases, the family home can be retained by one of the spouses notwithstanding the need to divide the community assets equally.  This can be accomplished where there are other community assets to be awarded the other spouse to offset the community equity and to ensure that both spouses receive an equal share of the community property.  In such a situation, one spouse “buys out” the other spouse by paying the other spouse for their share of the community equity.  This can be accomplished by giving the spouse their share of other community assets or simply by a payment from the purchasing spouse with their own separate money.
In any divorce case, it is always best to have an experienced attorney to guide you through the process.  If your divorce also involves real estate, a realtor with expertise in family law will be able to help you through the sales processes that are required for divorcing spouses in Court.  Only by having professionals with the experience that matters will you be able to navigate these pivotal issues with confidence and clarity.
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