HOW TO DIVIDE THE FAMILY HOME DURING DIVORCE IN CALIF. - VIDEO #14 (2021)

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Tutorial video in a series of DIY divorce videos that explains what you need to consider when dealing with the family home during a divorce.

The most common way divorcing couples deal with the family home is to sell it and divide the net sale proceeds.

You and your spouse will need to agree on numerous issues including the following: 1) Which realtor will you use to sell the home? 2) At what price will the home be listed for sale? 3) When will the home be listed for sale? 4) What improvements will be made to the home before it is listed for sale? 5) Who will live in the house until it is sold? and 6) Who will pay the expenses associated with the house until it is sold?

If you and your spouse are able to do so, it will certainly save money if both you and your spouse can continue to live in the home until the home is sold. If you can do this, you can continue to pool your earnings and continue to pay your bills, as you did during the marriage.

If one spouse wants to keep the family home, that spouse will need to buyout the other spouse’s ownership interest in the home. The first step is to agree on a buyout amount. You will start by trying to agree on the fair market value of the home.

You can determine the fair market value in any number of ways. One way is to hire an appraiser, but that will cost you around $600. Another way is to contact two or three realtors in your area and ask them to provide a free “market analysis”. Most realtors will gladly provide a free market analysis because they hope they will get the listing if the property ends up being sold.

Generally, there is no discount for a hypothetical real estate commission. In other words, the spouse wanting to buyout the other party’s interest may want to discount the value of the home by 5% because a real estate commission would be paid if the house were actually sold. However, the house is not being sold. No commission is being paid. So, the buyout price is not normally discounted due to a non-existent commission.

One or both spouses may have a right of reimbursement when it comes to the family home. If you used your separate property funds to purchase or improve the family home, then you are entitled to be reimbursed for your separate property contribution.

If there is going to be a buyout, the spouse keeping the family home should refinance all loans that are connected to the home. If you have a mortgage, the mortgage should be refinanced, with a new loan issued in the name of the party that is going to keep the home.

If you sell your one half ownership interest in the family home to your spouse and the mortgage is not refinanced, then your name will still be on the old mortgage. It does not matter if you sign a deed removing your name from the title to the home, your name will still be on the loan.

If your spouse can’t qualify to refinance the old mortgage, that may make it impossible for your spouse to buy out your interest unless you are willing to run the risk that your credit may be impaired and/or that it will be more difficult for you to obtain a mortgage in the future because your name is still on the old mortgage.

If one spouse is going to buyout the other spouse’s ownership interest in the family home, then an Interspousal Transfer Deed will need to be signed and recorded with the county recorder’s office.