In a divorce, you must divide up your assets and debts.  There are three main options regarding the marital or family home.  There’s also sometimes a lot of data gathering to be done.  The three options are:

  1. marital home data gatheringSell it and split the proceeds.
  2. One spouse “buys out” the other spouse’s interest in the home.
  3. Continue to own the home jointly.

Gathering the relevant data may help you decide what would be best in your situation.  It can also help you understand the implications of your decisions.

Data to gather for all three options

  1. Whose name(s) are on the house title
  2. Whose name(s) are on the mortgage
  3. What is the current market value of the house
  4. What is the outstanding balance on the mortgage
  5. Are there any liens on the house and if so, for how much
  6. How much would the selling costs be
  7. What is the “tax basis” of the house (purchase price plus cost of improvements made)

For a sale

  1. How much (if any) should be spent beforehand (and what should it be spent on) to get it ready for sale
  2. When is a good time to put it up for sale
  3. Type of professional assistance (realtor, purplebricks, etc.)
  4. How much of the capital gain can be excluded from tax
  5. How much (if any) capital gains tax must be paid

For a buy-out or continued joint ownership

  1. What are the terms of the current mortgage (interest rate, fixed/adjustable, etc.)
  2. What is the monthly PITI (principal, interest, taxes and insurance)
  3. What are the average monthly utilities
  4. Are there other monthly house costs, such as HOA dues or a gardener
  5. What major repairs / replacements will be necessary, roughly when and at what cost

For a buy out

  1. Can the spouse who wants to buy out the other qualify for a refinance
  2. Can the spouse who wants to buy out the other afford the monthly costs of the house
  3. Why does the spouse who wants to buy out the other want to keep the house

For continued joint ownership

The following points are not so much data to be gathered as matters to be discussed and agreed upon:

  1. Who will pay the monthly PITI
  2. Who will deduct the mortgage interest and real estate tax
  3. Who will pay the monthly utilities
  4. Who will pay any other monthly house costs, such as HOA dues and gardener
  5. How will minor vs. major repairs be defined
  6. Who will pay for minor repairs
  7. Who will pay for major repairs
  8. How will you decide on possible improvements and who will pay for them
  9. Will there be any reimbursements
  10. Who has access to the house and when
  11. How long do you plan to keep the house
  12. What circumstances will trigger selling the house
  13. What if either spouse defaults on their agreed obligations