Divorce is painful and challenging, but when it comes to your home, those things can magnify. Divorce and real estate can pose considerable emotional and financial challenges.
This step-by-step guide provides clear direction for ensuring that everything you do when it comes to real estate is carefully addressed during the divorce process.
Step 1: Gather Essential Documents
Real estate documents play a vital role in property valuation, legal procedures, and financial strategizing.
Property Deed: Proof of ownership.
Title Report: A Certified Divorce Real Estate Expert (CDRE®) can assist with ordering a preliminary title report from a local title company. A preliminary title report is a detailed document encompassing pertinent information regarding the property. This encompasses aspects such as ownership status, legal delineation, existing liens, covenants, conditions and restrictions (CCRs), easements, plat map, outstanding tax obligations, and other crucial particulars.
Mortgage Statements: Contact the mortgage company for the total amount owed. A mortgage statement may not have the total balance due.
Property Tax Records: Information on tax assessments and payments.
Home Insurance Policies: Coverage details.
Renovation Receipts: Proof of investments made in the property.
Step 2: Consult with Professionals
Divorce professionals can provide expert advice and support throughout the process.
Divorce Attorney: Specializes in family law and property division.
Mediator: Facilitates amicable property division if necessary.
Certified Divorce Real Estate Expert (CDRE®): An experienced Realtor® dedicated to navigating the intricacies of property sales within the context of family law proceedings. With specialized training tailored to handle the unique real estate challenges inherent in divorce cases, CDRE® professionals bring a wealth of experience and expertise to the table.
Financial Advisor: Helps plan for future financial stability.
Step 3: Determine Property Value
An accurate property valuation of your home is essential for equitable distribution.
Consider the following steps:
Comparative Market Analysis (CMA): A Comparative Market Analysis (CMA) is an essential tool in determining the fair market value of your property during a divorce. By enlisting the services of a Certified Divorce Real Estate Expert (CDRE®), you can obtain a thorough and unbiased valuation. This expert will assess your property by examining active listings, pending sales, and recently sold comparable in your area, ensuring an accurate and fair evaluation that reflects current market conditions.
Hire a Licensed Appraiser: Obtain a professional appraisal to determine the current market value.
Inspect for Repairs: Identify any needed repairs that might affect the value.
Step 4: Decide on Property Division
Contact your attorney and/or divorce mediator to arrange a meeting to discuss the options and decisions regarding the handling of the marital home. Here are some options to consider:
Sell the marital home: Reach out to a local Certified Divorce Real Estate Expert (CDRE®) to list the property. The objective is to ensure the proceeds are divided equitably.
Buy Out the Other Party: One spouse buys the other’s share, becoming the sole owner.
Co-Ownership: Continue owning the property jointly, often used when children are involved.
Step 5: Address the Mortgage
Obtaining a mortgage is a critical step, and plays a big role in divorce real estate. Oftentimes, homeowners who know they want to remain in the home after divorce will contact a mortgage lender before even contacting a divorce attorney or mediator, so that they can obtain a thorough understanding of whether or not they can financially afford to keep the home. A mortgage lender can also determine what price range to seek if you are buying a new home.
Here are some options when it comes to the mortgage:
Refinance the Mortgage: The spouse keeping the house refinances to remove the other’s name. This is a difficult option right now because of high interest rates.
Assume the Mortgage: Assume responsibility for the existing mortgage. Contact the mortgage company to see if the current mortgage is assumable.
Sell and Pay Off Mortgage: Use sale proceeds to pay off the mortgage balance.
Step 6: Plan for the Future
Budget for Moving Costs: Estimate expenses related to moving and setting up a new home.
Plan for New Housing: Whether buying or renting, ensure your new home meets your needs.
Financial Planning: Adjust your budget to accommodate changes in income and expenses post-divorce.
Timeline Overview
Here’s a general estimated timeline to keep track of these tasks:
First Month: Gather documents, consult professionals.
Second Month: Conduct property valuation, discuss division options.
Third Month: Finalize decisions on property and mortgage, start legal processes.
Fourth Month: Update records, plan and execute the move.
Timelines may vary, and it is essential to adhere to court order requirements and/or to keep your mediator updated.
Managing divorce and real estate in Minnesota requires careful and thoughtful planning, and surrounding yourself with divorce professionals you trust. Support from a mediator, family law attorney,Certified Divorce Real Estate Expert (CDRE®), Certified Divorce Lending Professional (CDLP®),and financial advisors is invaluable in making informed decisions during this challenging time.
If you or someone that you know has real estate questions or wishes to discuss how I can help, please contact Shannon Lindstrom, Realtor® with RE/MAX Results and a MN Certified Divorce Real Estate Expert (CDRE®) serving the Twin Cities/MN at 612-616-9714.
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