Divorce. This is something that married coupled do not ever expect to happen when they say their vows. Unfortunately, many divorces occur every day. Usually, after reality and acceptance set in, it’s time to decide who gets the house. This can be one of the major fights when it comes to the settlement. The party that wants the house will have to “buy out” their ex-significant other. This means that you have to pay them an equal amount to their interest in the home.
Because this can be very expensive, the best option is to refinance the home, which is done by getting the house written in your name, then coming up with what your share of equity in the house is. The first thing you have to do is find the monetary value of your home and minus the mortgage remaining on the house. After, you should pull your calculator out and see how much you’re going to owe on the rest of the house.
Many soon-to-be divorcees wonder how in the world they’re going to value the home since they aren’t selling it. If you aren’t selling it, how do you know the real value? The method to go about this is to technically do the same thing you would do if you were buying the home. What are the current comps? What changes, if any, has the neighborhood undergone since you bought it? Also, an appraiser has to be brought out to inspect the house. This usually is only done if you and your spouse cannot agree on a number. If neither will agree, they’ll have to let the judge decide in court what he or she feels is fair.
Usually, once an appraiser comes to the house and provides a professional opinion on a number with what he or she feels is accurate, it can be hard to argue with that. This is why usually it isn’t necessary to fight in court over the value. It usually can be agreed upon before going into the lawyers office. Keep in mind that how much you and your spouse share in the equity of the house varies depending on where your home is. States have different laws regarding this, and so the share of equity isn’t necessarily set in stone. So many factors go into how much of the home you own. Perhaps you paid for the new guest house on your own. This usually would mean that you have a little more equity in the house than your partner. Divorces are messy, but deciding how much you need to buy out the person is usually the easier part. The hard part usually is the fighting over who gets the house.