What Happens to Your Home in Divorces

Divorce is a difficult situation which opens up many emotional and financial issues which need to be resolved. One of the most important issues is what to do about your home. There are many questions you might be asking at this time, we, at Kahane Law Office, are here to help. Let’s first break down some of the basics.

“I think I want to stay in my home…what do I need to keep in mind?”

First, take into consideration the size of the home, utilities, payments and family needs. Will the familiar surroundings bring you comfort and emotional security, or unpleasant memories? Do you want to minimize change by staying where you are, or sell your home and move to a new place that offers a fresh start? Does staying in the home truly make sense? You will likely now be entirely responsible for the house payment, taxes, insurance, upkeep, maintenance and other related bills. Your household income may be decreasing, and your overall expenses may be increasing if you are subject to a court order for spousal or child support. It is important that you are aware and thorough in determining what your actual expenses will be in keeping and maintaining the home on your own.

“My spouse is entitled to share in the equity we have in our home…how is this handled?”

The equity in the home needs to be determined by an appraiser – call us if you need a recommendation and referral. The appraised value less the eventual costs of selling (commissions and seller closing costs), less any joint financial obligations related to the property (mortgages, secured credit lines) equals the equity to be split between the parties (in most cases). Any money you or your spouse contributed to the home from your own pre-marital assets must also be accounted for in determining the final division of equity.

If you choose to stay in the home, when it comes to mortgage financing, you have two options to pay your ex-spouse. You can either refinance your current home to get cash out, or you can obtain a new second mortgage or home equity loan. This is where you will want the advice of a trusted licensed mortgage professional.

Even though you may now be qualifying for the loan without a spouse’s income – with your own good credit and income, you can usually qualify on your own. Often, child support and alimony is viewed as stable income and can, in most cases, be used to help support the mortgage application.

“What if I am the one leaving the home?”

It is important to know that even though the divorce agreement awarded the home to your spouse, you are still obligated for this debt in the eyes of the mortgage company.

Many people assume that by filing for a divorce and removing themselves from the title, they are no longer responsible for the mortgage. A divorce agreement may only eliminate your name from the title of the property, but not necessarily from the mortgage. This is something to be aware of and we always recommend getting your own legal advice to make sure you are properly protected.

“What if we both decide to sell the home?”

If you and your ex-spouse have made a mutual decision to sell your current home, it is important to work together with a good real estate professional to maximize your return. Differences aside, you should both be present when a listing contract is put together and both be consulted on all potential offers. Consult a qualified real estate agent.

“If I want to buy another home – am I going to be out of luck while I am still listed on the old mortgage?”

Consult with your lawyer as to whether or not it is advisable to purchase a new home before your divorce is final. Contact us and we can identify any issues to resolve that might slow the process. Remember that in most situations, child support and alimony can be used to support the mortgage application but must be properly documented. Even if you are still listed as a co-borrower on the mortgage for the prior home, if the divorce agreement states that you are not obligated for the mortgage, many mortgage programs will allow you to be qualified without this obligation. However, every situation is different and it is best to give us a call to discuss your circumstances prior to making any purchases.

“What if I do want to purchase another home before the divorce is final?”

Get advise you can trust. Discuss the potential pitfalls with your lawyer. Your spouse may present an obstacle to this process if the details of the divorce have not been finalized. Without the final divorce agreement (or at least a signed separation agreement), many lenders are reluctant to proceed. With prudent planning, we can work together to manage the challenges presented and hopefully make the process as painless as possible.

The best advise we have is that you consult a licensed professional for your real estate, mortgage and legal needs.

For more information contact Jeff Kahane at Kahane Law Office or 403-225-8810.

Questions You Should Always Ask!

If you’re buying or selling a home, chances are you’ll be employing the aid of a real estate agent to guide you through the process. The important thing to remember is that you are technically their boss. They should be working for you, whether you’re buying or selling a home. That’s why it’s so necessary to interview several real estate agents before settling on one. Here are some helpful questions to narrow down the candidate field.

1. How many years have you been working in real estate?
   Although some agents may be newly licensed, they may have been working on other areas of real estate that will be helpful to you. Any previous experience working with home buying and selling will make an agent a valuable asset. Many times realty is a second or third career. If your realtor was a mortgage lender before switching to the housing world, they might be even more helpful than someone who has been in the business since the word go.
2. How many homes do you sell yearly?
   Numbers count, but be aware that small numbers aren’t always bad. An agent may only sell a handful of properties each year, but if they’re worth millions, that’s all they needed to. That’s why it’s important to ask not only how many they sell, but the price range that the homes fall into. If you’re buying a house, this will help you gauge which houses the agent has access to and is more experienced with selling. If you want to sell your home, this will be a good indicator of whether or not the realtor is going to successfully Market your property.
3. What is your area of expertise?
   If you want to buy a condo, don’t hire a realtor who sells mansions. If you want to buy a family home, don’t hire anyone who specializes in two-person town houses. Finding niche agents will open more doors during your house hunt or sale. Buyers will be shown more properties matching their requirements, while seller’s homes have a better chance of being marketed more effectively.
4. How many other clients are you currently working with?
   Translation: How much time can you devote to my needs? Some realtors won’t turn down a client, even if their plate is already overflowing. Ask for the numbers. If the phone is ringing off the hook during your meeting and papers are flying, you may want to look elsewhere for an agent who can devote a good chunk of time to you. Explain to them your typical schedule and what times you’d you would be available to view houses or have meetings. If they can’t be flexible, move on.
5. Do you have a list or client references?
   Nothing says more about the professionalism and worth work ethic of a realtor than their ability to provide you with a list of client references. Just producing a list on the spot is a good sign that the agent is prepared and wants your business. If there is none available immediately, or the agent sputters out some excuses, take it as a sign to head elsewhere.

While buying or selling a house, it is important to choose the right real estate agent by asking him all necessary questions before appointing.  If you are in the Calgary area and are looking for an agent to work for and with you, give us a shout… Jared@tcgroup.ca

Today’s Current Listing Count

Hey Everyone,

I just wanted to make aware that over the holiday season, there has been a good change in the listing count. Right now there are 3,351 Single Family homes listed in the Calgary market place and 1,527 Condo properties (including townhomes, apartments etc.) listed. These numbers have dropped considerably over the last couple months. At the end of November 2007 there were 4,984 Single Family and 2,196 Condos on the market.

I wish I knew if this means that the market has settled and we are back to a balanced market, but I can’t. The reason I say that, is that over the last month (December 2007) there has been 1240 properties (single family and condos) that have gone off the market by them actually selling. But there has actually been more properties over the same time period, 1,711, that have been taken off the market via being terminated, withdrawn or the listing has expired. This says to me, that these sellers may be delaying the sale/listing of their property. Historically speaking, spring is usually a good time of the year to have your property listed, but it will be interesting to see what happens this coming spring and summer with the listing count, and if many of these home owners will try to list their homes all at the same time again, and yet again, create an overflow in the listing numbers. But then again on the flip side, we could actually be out of the high listing months, and back to a bit of normality…

Only time will tell!

But there is another side to this all as well… We have listed some homes over the last couple months and have had great success in selling them with various listing strategies, even with a very high number of competing properties. If you are in need of selling your home, please give us a call or contact us and put us to work for you!

Thank you for making us your Real Estate Team!