To say that going through a divorce is difficult would be a massive understatement. In addition to being a major life change and an extremely emotional process, divorce also means dealing with a whole host of logistical obstacles.
One of the largest and most obvious of these challenges is your home.
While still an emotionally messy time, if there’s any silver lining to buying out your former spouse after your divorce, it’s that the process is often easier and less complicated than a joint sale. That said, there are still a ton of logistics and legalities you’ll have to deal with before anything is final.
First Things First
Divorce is complicated. With lots of complicated legal steps and financial considerations, finalizing your divorce is far from an overnight process. Before you’re able to make any headway on buying out your former spouse you’ll first need to have a legally binding separation agreement in place.
The separation agreement covers a lot of important details – things like custody, child support and if needed, spousal support. Until your separation agreement is signed, you won’t be able to begin the steps required to buy out your former partner.
When it comes to dealing with your home after a divorce, there’s a lot to consider. If you’re interested, check a few more of my divorce-related related resources below.
- Everything You Need to Know About Disclosures & Divorce
- Real Estate Vows to Make Before You Get Married
- How to Find an Agent to Sell During Your Divorce
Who Gets to Stay
Even if you and your partner are still on good terms, dividing up your shared property, especially your home can be tricky. In a lot of cases, couples who are going through divorce simply choose to sell the house, split the money, and move on to their next chapters. But what happens when one partner wants to stay put?
If you and your former spouse have kids, it’s most likely that the parent with primary custody will keep the home so that the kids can stay close to family, friends, and school. Of course, it’s totally possible for either person to stay in the home as long as both partners agree on who.
Buyout Basics
Let’s get down to the nitty-gritty. If you want to keep your home, you’ll need to buy out your former spouse from the mortgage. In a nutshell, this means taking on the existing mortgage in its entirety and paying back your former spouse’s share of equity in the house.
There’s more than one way you can complete this process, and your real estate agent or financial advisor can help you choose a path based on your personal preference and financial standing. For most people, it simply means increasing the mortgage amount after it’s been assumed to include the amount owed to your former spouse.
Buyouts can happen gradually. However, more often than not it will need to be taken care of in order to completely finalize your divorce settlement.
In addition to divorce, other major life transitions may impact you or your loved one’s home. Want to learn more? Check out these helpful resources from my blog.
What if the House Has Gone Up in Value?
In Etobicoke and Greater Toronto as a whole, homes that go up on the market are more often than not worth well more than their original price tag. Depending on when you and your former spouse first bought the home, it’s likely gained a fair bit of value over the years. During the buyout process, you’ll need to account for the equity that you and your former spouse have earned.
Unfortunately, there’s no magical crystal ball that can give you a clear, undebatable value of the home. In reality, you and your former spouse will need to come to an agreement on what the home is worth today. Even if the two of you are on amicable terms, it’s a good idea to bring in an expert.
The best way to get an accurate sense of what the home is worth is by asking a real estate agent. If you’re both comfortable working with the same agent you used to buy your house in the first place – even better. Your agent can determine a fair market value for the property based on a handful of factors, including market conditions and similar homes in your neighbourhood.
As a real estate agent in South Etobicoke, I specialize in supporting clients through tough times. If you need help buying out your partner during a divorce, I can help. Call or text me at 647-239-7587 or send me an email at melissa@southetobicoke.com to get started.
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