Is Selling Your Home the Only Option in Divorce?
No. There are several options for how to divide your home in divorce.
Assuming you live in Arizona, your home is probably community property that must be divided equitably. This is generally true even if only one spouse’s name is on the title. You should discuss your particular situation with your divorce attorney.
Here are four ways to divide the value of a home:
Option 1: Sell the Home and Divide the Proceeds
This is among the most common options because it is relatively easy, especially in a strong market. The upside is that it offers a clean break and access to ready cash, which can be used for divorce-related expenses or to offset other property distributions. Or, the cash could be used to buy or rent a new home.
Option 2: One Party Buys Out the Other
One spouse may wish to continue living in the marital home. This can be a good way to provide stability for children and can have other advantages. It is also a way to prevent a loss in a down market.
In a buyout, you need to determine the fair market value of your home, generally by hiring appraisers. You may agree on a single appraiser or you could each hire one and negotiate between the two results. Equity may require slightly more or less than half of the home’s fair market value, depending on the circumstances.
Option 3: Offset With House With Another Asset
If you and your spouse have another major asset of similar value, you could decide to trade them off. For example, one spouse gets the family home and the other receives the vacation home. Or, one gets the family home and the other gets the stock portfolio.
This can be a quick, easy way to get through the division of property. Depending on how similar the assets are in value, you may not need to negotiate an exact 50/50 share.
Option 4: Remain Co-owners
Here, you will essentially be entering a business partnership with your divorcing spouse. One person might continue to live in the home, or you could rent it out for profit until some future date. This is a good option when market conditions are unfavorable or when neither party has the cash available to buy the other out.
You will need to decide how the mortgage will be paid, when the house will be sold and how to divide the proceeds when that sale occurs. You should also consider how you will resolve disputes if the other party doesn’t meet their obligations.
Your divorce attorney may have other options to recommend, depending on your exact circumstances.