Real estate financial mistakes to avoid in divorce

Posted by Lauren S. CohenDec 26, 20180 Comments

Emotions and realities about money can make some divorce-related decisions difficult. In particular, choosing what to do with the family home can be a challenge. Whatever a New York couple decides, it's important that they avoid two common errors.

First, many people fail to realize that they cannot afford the home however much they want to live in it. In some cases, the decision to sell the home is often not agreed upon by the couple but ordered by a judge. Some couples may compromise by waiting a year or two until the market improves or a child is out of school. In an amicable divorce, they might try a nesting arrangement in which the children live in the home and the parents switch in and out.

The second error to avoid is not removing one partner from the deed if the other does keep the house. This step is skipped sometimes even if the other spouse is no longer on the mortgage. However, there can be problems later if the owner wants to sell and the other person does not cooperate or if the home goes into foreclosure.

For some people going through a divorce, letting go of the home can be difficult because of an emotional attachment to it. However, setting aside those emotions may be wise from a financial perspective. For example, guilt could cause an ex to agree to unfavorable financial terms in the divorce agreement. A lawyer could help a client look after their best interests during the property division process.