Real estate concept - two hands trying to divide house, isolated

In December, Dallas showed up in the #4 spot on Realtor.com’s list of hottest real estate markets. It moved up one spot from November, when it was ranked at #5. In the latest report, Dallas was outranked by only three other U.S. cities (all of them in California) — San Francisco, San Jose and Vallejo. (See report from Home Buying Institute here.) Houses tend to sell more quickly in these hot markets, compared to other cities across the country. And, stories of first day listing bidding wars are frequently heard around the coffee pot at realtor offices in DFW. So, what does that mean if you are going through a divorce? How do you factor that in to deciding to keep the house, let the other spouse keep the house, or sell it and split the proceeds?

Today I received in the mail a very timely newsletter from John Snell, CDLP about mortgage lending in divorces. He made some very timely points about topics to consider for a spouse who wants to keep the house after the divorce.

1.Why do you want to keep the house after you get divorced?

This question may be difficult to answer for many. For some, one house may be the same as another house — just a place of shelter and functionality. But for others, the home carries many emotional ties. It may have good memories, such as the place where the child took his or her first steps. Or, it may carry negative memories, such as the painful reminder of the broken marriage. Either way, there are many emotional, financial and practical considerations to consider in deciding whether to keep the house.

2.Is your home a good investment (especially in the Dallas real estate market)?

Going through a divorce requires a hard look at your financial interests. Compare the home’s value in the market to the amount owed to determine the net equity. Also, look at the future market trends for your house and your area. Is this a good long-term investment for you? Or, will this prove detrimental to your financial interests over time? A realtor can give you an idea of comparable sales to determine a ballpark value of your home — and they usually do this for free.  (Call Realtor Debbie Murray at Dallas Luxury Real Estate if you want to talk about how much your house might be worth.) One unique factor right now is the heat of the Texas real estate market. In a normal market, the considerations of keeping the house may be different. But in this market, the selling factors may present an opportunity to make a different decision if the value of the house is high.

3.What is the condition of the house?

It is a good idea to look at your house the way a buyer would when you are considering whether to keep the house in the divorce. What are the repair issues that need to be addressed? Is the roof in good condition? Is the a/c unit in need of servicing? You should consider having a home inspection done prior to discussing settlement to look at repair issues that would affect the overall value of the home. Use the cost of repairs to negotiate the value of the house downward during the divorce negotiations.

4.Can you afford the home on your own after divorce?

If you were dependent upon your spouse’s income during the marriage to afford the living expenses related to the house, you need to fully examine whether you can afford to keep the house without the spouse in the picture. For many people, divorce negatively affects their financial status. Income usually goes down and expenses go up. If you are unsure about what you can afford or need help putting together a budget, consult with a financial professional for help.

5.Can you qualify to refinance the home to remove the other spouse from the note after divorce?

Although it cannot be forced in a Texas divorce, you will want to consider the option of refinancing the home mortgage if you are going to keep it after divorce. This will put separation from your ex-spouse on all issues. Otherwise, as long as he or she is on the note, that ex-spouse will have the right to inquire about timely payment of the note in the future. You can call a mortgage lender who specializes in divorce situations (like John Snell) to find out more.

For the most part, there is no right or wrong answer to this issue. Each situation is unique and has different positive and negative thoughts to balance. Through the combined advice of your Dallas Texas divorce attorney, your DFW realtor, and your divorce-specialized mortgage lender, and your financial professionals, you can reach an educated and informed decision.

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Photo of Michelle O'Neil Michelle O'Neil

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes…

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes genuine compassion for her client’s difficulties, yet she can be relentless when in pursuit of a client’s goals. One judge said of Ms. O’Neil, “She cannot be out-gunned, out-briefed, or out-lawyered!”

Family Law Specialist

Ms. O’Neil became a board-certified family law specialist by the Texas Board of Legal Specialization in 1997 and has maintained her certification since that time. While representing clients in litigation before the trial court is an important part of her practice, Ms. O’Neil also handles appellate matters in the trial court, courts of appeals and Texas Supreme Court. Lawyers frequently consult with Ms. O’Neil on their litigation cases about specialized legal issues requiring particularized attention both at the trial court and appellate levels. This gives her a unique perspective and depth of perception that benefits both her litigation and appellate clients.

Top Lawyers in Texas and America

Ms. O’Neil has been named to the list of Texas SuperLawyers for many years, 2011-2018, a peer-voted honor given to only about 5% of the lawyers in the state of Texas. In 2014-2018, Ms. O’Neil received the special honor of being named by Texas SuperLawyers as one of the Top 50 Women Lawyers in Texas, Top 100 Lawyers in Texas, and Top 100 Lawyers in DFW. She was named one of the Best Lawyers in America for 2016 and received an “A-V” peer review rating by Martindale-Hubbell Legal Directories for the highest quality legal ability and ethical standards.

Author and Speaker

A noted author, Ms. O’Neil released her second book Basics of Texas Divorce Law in November 2010, with a second edition released in 2013, and a third edition expected in 2015.  Her first book, All About Texas Law and Kids, was published in September 2009 by Texas Lawyer Press. In 2012, Ms. O’Neil co-authored the booklets What You Need To Know About Common Law Marriage In Texas and Social Study Evaluations.  The State Bar of Texas and other providers of continuing education for attorneys frequently enlist Ms. O’Neil to provide instruction to attorneys on topics of her expertise in the family law arena.