What Happens to the ‘Home’ in a Divorce?

There are many hard decisions to make and tough decisions to consider when a family is going through a divorce. Issues that immediately come to mind might be ‘where will my children live’ or ;when will I see my children’. Other questions sometimes are focused on financial issues, like ‘will I be able to pay my bills’ or ‘will I still be able to retire when I hoped’. A sometimes overlooked question (at least in the beginning of some divorce processes) is: ‘what will happen to my home’.

One of the fundamental factors for those going through a divorce to consider is that often the same level of income that supported the family home/household, is now going to have to support two separate households. There will now be two mortgage/rent payments, two utility payments, two internet payments, two different sets of property upkeep, etc. The furniture and furnishings of one home likely will not be enough for a second home. So unfortunately, it may not be possible for one of the divorcing parties to remain in the marital home if neither party can afford to do so on their own.

During the red-hot real estate market of 2021 and the spring of 2022, the possibilities of a property selling (much) higher than the listing price, receiving an all-cash offer, bidding wars between willing buyers, and selling without having to concede on significant repairs or improvements were appealing to those who were considering selling their homes due to divorce. Today, it appears that the market has cooled down somewhat. Folks going through a divorce may need to evaluate their options through a different lens.

An alternative to selling the home is for one party to retain the property while the other party moves out. There are a number of scenarios in which an approach like this would be appropriate. Often times if there are children involved, those children may feel bonded to their home, their rooms, their neighborhood friends, or nearby activities. In those cases, one party could remain in the home for a period of time to allow some consistency for children, in contrast to the rest of the change that often occurs in connection with a divorce.

The party that stays in the home with the children may do so for a set period of time – referred to as ‘use & possession’ – or by way of buying out the other’s party equity in connection with a refinance or assumption of the current mortgage. Our firm has previously posted about the ways to determine equity in the marital home https://www.wsfamilylaw.com/determing-the-equity-in-the-marital-home/

As with anything in family law, there are certainly pros and cons to each approach. A solution that works for one family may not be practical for another for any number of reasons. That is why it is critical to take some time and think through the options for each family, trying one’s best to think down the road about what a work-able future might look like for a family that is now living in two households.