Kari McCoy commentary: How to keep your house in a divorce

Question: Dear Kari, My husband and I are going through a divorce and I have the opportunity to keep the house and buy him out. My family is telling me to sell the house. I am just not sure which way to go. Do you have any tips for me? Answer: Divorce brings up a vast number of complex issues that can be emotionally and financially devastating. I am working with the idea that the property is in both of your names, offering equal partnership with this being the only topic you are inquiring about. In this case, it is typical for one spouse to simply sign a quit claim deed and everyone be on their merry way. Using a quit claim deed, one spouse may sign off the title of the property, removing the right of ownership but not the loan responsibility. This can be a dangerous situation, even when both parties have the best of intentions. Unforeseen problems may arise, creating a dreadful situation for the spouse keeping the house. For instance, a problem may arise if the other spouse cannot make the payments or if any new defects develop with the property years down the road or a sudden change in property value occurs. Ways to troubleshoot this is to have the spouse with the house obtain a new loan or by using a "Sign Off." Both of these cases would require the remaining spouse to qualify on their own merits for the full loan amount. It would be strongly advised for the spouse that is considering keeping the house to treat this transaction as though they were purchasing the property from a complete stranger. This way, all the unforeseen costs would be discovered up front and split down the middle. Here is a list of additional necessary items allowing for the completion of the sale: · Obtain a preliminary title search and insurance, checking for hidden liens or debts. · Have a pest control/termite inspection and any necessary repairs completed. · Acquire a home inspection and complete necessary repairs. · Get a one-year home protection warranty. · Attain a current professional appraisal of the property. · Include two different Realtors' comparative market analysis in writing. · Factor in how much life is left on large items such as the roof, air conditioner/heater, hot water unit, electrical, etc. · Do not overlook the tax consequences for both parties. · Total of costs with regards to title/escrow fees and new lender fees. · Most important of all is to have a second title search completed right before you sign on the dotted line, as things have been known to pop up at the last minute. In the event these items are completed and offer an encouraging result, then perhaps it is in your favor to go ahead and keep the house. Remember before you agree and sign on the dotted line, you should consult a real estate attorney, accountant and a Realtor, arming yourself with full knowledge to help you make your best decisions. Kari McCoy owns the Kari McCoy Group, residential real estate at Lyon Real Estate. She can be reached at 916-933-5274 (Kari) or e-mail her at sold@karimccoygrou.com #00841588