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3 questions to ask during divorce involving real estate

On Behalf of | Oct 14, 2024 | Family law |

Real estate is a valuable investment. Many married couples purchase homes where they live together, and others may buy property as a source of income. Either they buy distressed properties for low prices and repair them to sell them at a profit or they rent homes out as residences for others.

Whether the property in question is an investment or a home, it can become a complicating factor in an upcoming divorce. Those preparing for divorce proceedings often need to ask themselves specific questions in order to obtain the best possible outcome during the property division process.

What questions can help people establish appropriate goals for an upcoming divorce?

Should I stay in the home?

Both the current marital home and rental properties can potentially become the primary residence of either spouse. Factors including the likely loss of income and the ability to afford the home are important considerations. People also have to consider whether they can maintain the property without the assistance of a spouse. Many people struggle to fulfill interior and exterior maintenance obligations on their own. Determining whether to retain a property as a residence, buy a new home or rent is an important consideration.

What is the home actually worth?

The value of real property fluctuates significantly over time. It may increase based on local market conditions or favorable reports about the performance of local public schools. It may go down after notorious crimes or issues with local infrastructure. Spouses often need the assistance of real estate professionals to determine exactly what the home is worth on the current market. That value can affect everything from the ability to afford the mortgage to the division of other assets.

How much equity is marital property?

Occasionally, spouses own properties outright. Many times, however, they only have a partial interest accrued in the home or in investment properties. After determining the fair market value of the property, they then need to determine how much equity they have established by making payments on and improvements to the property. From there, they may need to make adjustments based on any premarital investments, as one spouse may have actually acquired the property prior to marriage.

The answers people arrive at when asking themselves those three questions can have a profound influence on the outcome of their divorce proceedings. Setting appropriate divorce goals can help people control divorce costs and feel more satisfied with the final outcome of the process. Real property is an important consideration to address as early as possible when strategizing during divorce.