Navigating Your Options in January is Divorce Month
In Canada, approximately 55,000 divorces occur each year, with a notable surge in January as couples often wait until after the holidays to address their relationship challenges. While divorce is a deeply personal and emotional decision, it’s also one that comes with significant financial implications. One of the most pressing questions couples faces during this time is – What do we do with the house?
For many, the family home represents stability, memories, and significant financial value. Deciding its future can be one of the most challenging aspects of a separation. To help you navigate this important decision, here are three primary options and what you should consider for each:
1. Sell the Home
Selling the home is often the cleanest and most straightforward option. This allows both parties to split the proceeds and move on with their lives independently. However, there are some key factors to keep in mind:
Are both parties financially prepared to transition to new living arrangements?
What are the costs associated with selling, such as real estate commissions, legal fees, and potential capital gains taxes?
Can you agree on how to split the proceeds fairly?
Selling can provide a fresh start but requires both parties to fully understand their financial position and housing options after the sale.
2. Keep It (with a Twist)
In some cases, one spouse may choose to keep the home by buying out the other’s share of the equity. This option, known as a “spousal buyout,” involves refinancing the mortgage so the buying spouse can assume full ownership. Here’s what to consider:
The individual buying out the equity must qualify for the mortgage on their own or with the help of a co-signer (often a parent or close family member).
The buyout amount needs to be agreed upon, typically based on the home’s market value minus any outstanding mortgage balance.
Additional costs, such as refinancing fees and legal documentation, may apply.
A spousal buyout can work well if one party wishes to stay in the home, particularly if children are involved and stability is a priority.
3. Co-Own It (Temporarily)
When children are involved, some couples opt to maintain joint ownership of the home for a period of time. This arrangement can help provide continuity for the children but comes with its own set of challenges:
Clear agreements are necessary to determine how expenses such as mortgage payments, property taxes, and maintenance will be shared.
Establish a timeline for when the home will eventually be sold or transferred to one party.
Emotional dynamics can be tricky, so this option requires open communication and trust.
Temporary co-ownership can be a viable solution but should be approached with caution and a well-documented agreement.
Which Option Is Right for You?
The best choice depends on your unique circumstances, including your financial situation, emotional readiness, and future goals. Regardless of the option you choose, it’s essential to think long-term and make a decision that sets you up for financial stability.
Let’s Navigate This Together
Deciding what to do with the family home during a divorce can be overwhelming, but you don’t have to go through it alone. As an experienced real estate professional, I’ve helped many separating couples make informed decisions that work best for their situation. From understanding your options to facilitating the sale or buyout process, I’m here to guide you every step of the way.
Let’s start the new year on solid ground. Book a call with me today, and together we’ll create a plan that works for you.
Divorce isn’t just a legal decision—it’s a financial one. Let’s ensure your real estate choices set you up for success.
