Unfortunately, it is common for divorcees to have to downscale their real estate holdings due to the sudden loss of a second income. This slippery slope could lead to foreclosure and bankruptcy, among other negatives. This is why it is necessary to be prepared before you file for divorce. Here are five tips to help you preserve your real estate portfolio.
- Many property owners are faced with negative equity on their properties, meaning that the loans are larger than the value of the property. Because of this, whoever is awarded the property during the division of marital assets may end up inheriting property saddled with debt that they may have problems paying back. While there’s little that can be done in this sense, working with an appraiser to determine the house’s value can help you make educated decisions when trying to divide your marital property.
- Consider holding off on your divorce until after your home has been sold. This can help you avoid the problem of taking on a home with negative equity. After all, it’s a lot easier to split cash than it is to split a house. If neither of you plans to stay in the marital home, or it would be financially irresponsible to do so, this is one way of preventing the problem from ever arising.
- Look beyond just the value of the home. Think about potential hidden costs, like capital gains taxes. These might make taking the home in a divorce settlement a less attractive option.
- If you decide to sell, remember: this is a business transaction. Leave your emotion at the door. Sentimentality is fine, but what is important is getting a fair deal.
- Don’t try to sell the home yourself. Look for a realtor with several years of experience selling homes in your area, especially one who knows what to look for when handling divorce-related sales.
Our Denver divorce attorneys can help you plan for your financial future following divorce.
Unfortunately, it is common for divorcees to have to downscale their real estate holdings due to the sudden loss of a second income. This slippery slope could lead to foreclosure and bankruptcy, among other negatives. This is why it is necessary to be prepared before you file for divorce. Here are five tips to help you preserve your real estate portfolio.
1. Many property owners are faced with negative equity on their properties, meaning that the loans are larger than the value of the property. Because of this, whoever is awarded the property during the division of marital assets may end up inheriting property saddled with debt that they may have problems paying back. While there’s little that can be done in this sense, working with an appraiser to determine the house’s value can help you make educated decisions when trying to divide your marital property.
2. Consider holding off on your divorce until after your home has been sold. This can help you avoid the problem of taking on a home with negative equity. After all, it’s a lot easier to split cash than it is to split a house. If neither of you plans to stay in the marital home, or it would be financially irresponsible to do so, this is one way of preventing the problem from ever arising.
3. Look beyond just the value of the home. Think about potential hidden costs, like capital gains taxes. These might make taking the home in a divorce settlement a less attractive option.
4. If you decide to sell, remember: this is a business transaction. Leave your emotion at the door. Sentimentality is fine, but what is important is getting a fair deal.
5. Don’t try to sell the home yourself. Look for a realtor with several years of experience selling homes in your area, especially one who knows what to look for when handling divorce-related sales.
Our Denver divorce attorneys can help you plan for your financial future following divorce.
