The division of real estate is just one more thing to be considered in a divorce. If that divorce is highly contested it can be a challenging aspect to navigate as both parties want the property and will fight for it tooth and nail. On the other hand, in an amicable divorce neither party may want the property and aren’t sure what they want to do with it. In this blog post, we will discuss the potential options for dealing with community real estate during a divorce.
As always, remember that Texas is a community property state. Meaning that in most cases, any property acquired during the marriage is considered community property and is subject to division between the spouses in a divorce. This includes real estate, whether it’s the family home, vacation properties, or investment properties. Even if the property was bought with just your checking account, if it was bought during the marriage, that home is presumed community property.
Options for Real Estate Division
When it comes to real estate in a divorce, several options are available to the divorcing spouses:
- Sell the Property: One of the most straightforward options is to sell the property and divide the proceeds between the spouses. This approach can be particularly beneficial if neither spouse wants to keep the property or if selling is the most financially advantageous option. Of course, in a contentious divorce, then the fight will become about how much each spouse receives. In this situation, the judge will likely need to make the final decision.
- Buyout: One spouse may choose to buy out the other spouse’s share of the property. This often involves refinancing the mortgage or making an arrangement where the buying spouse compensates the other for their share of the property’s equity. How much you’ll have to pay the other spouse to buy them out depends on several factors. A few of these factors are: how much the home is worth, how much is still left on the mortgage, and how much each spouse put towards the purchase of the home.
- Co-Ownership: In some cases, the divorcing spouses may agree to continue co-owning the property after the divorce. This solution can arise in the event of a nesting agreement or if the property is a vacation home that isn’t occupied year round.
- Deferred Sale: In certain situations, the court may order a deferred sale, allowing one spouse to stay in the property for a specified period (usually until the youngest child reaches a certain age) before selling it and dividing the proceeds.
There are many unique ways in which real estate can be dealt with in a divorce. Because many have their wealth tied up in equity due to real property, it is crucial that you have an attorney on your side to make sure you aren’t signing away more than you should in your divorce. It is never a good idea to let thousands if not millions of dollars go because you want to avoid a fight. Even if the divorce is amicable, at the very least an attorney should be retained to review the final decree, and make sure everything is as it should be.