Common Mistakes When Dividing Real Estate in a Divorce
There are many ways to divide real estate, including trading properties, selling and splitting the proceeds, or having one spouse buy out the other. Any of these can provide an equitable division of property, but only if it’s done correctly. A small oversight can have significant consequences later, so it pays to take your time and carefully consider your options.
A lawyer can help you avoid common errors when divvying up your real estate, including:
- Basing decisions on inaccurate values. It can take many different estimates to place an accurate value on a property, including a real estate appraisal, the tax-assessed value, the market value, and the potential sale price on the current real estate market. If you’re basing a decision on an inaccurate estimate, you could be thousands of dollars off the mark on your property’s actual value.
- Lowballing ongoing costs. If you plan on keeping a particular property, it’s essential to consider the future costs of each asset. It would be best if you had an accurate estimate of property taxes, insurance, upkeep, and other fees, especially since you’ll be the sole person responsible for paying them.
- Open-ended sharing. If you and your spouse want to continue sharing a particular property, creating a use schedule and a contract to address disputes is vital. For example, if you both want to keep your timeshare after divorce, you should have a detailed document stating who will occupy it on each holiday or vacation period and the maintenance that must be done before the next use.
- Investment property disputes. Spouses who want to keep an interest in income-generating properties will need governing documents outlining who pays for upkeep, makes repairs, is in charge of the operation, and how rental income will be shared.
- Miscalculating negative equity. Divorcing spouses share debt as well as assets, and mortgages and liens can unfairly portion debt to one spouse. You may have to refinance, apply for a loan modification, or accept a short sale if a property has negative equity. If the property is unlikely to sell, it might be better to continue co-owning the property until the housing market improves—but you’ll need a contract with your ex-spouse detailing the timeline for listing the property and who will occupy and maintain it.
- Acknowledging your losses. Emotions often rule important decisions regarding the family home, vacation properties, and other real estate that holds special memories. In addition to understanding the total costs of a property dear to you, you should also prepare yourself for what might happen if you give up a property. Your ex-spouse will have the legal authority to redesign it, sell it, or live in it with a new family, and it’s important to accept those realities and mourn their loss.
Let a Washington State Divorce Attorney Help You Through This Difficult Process
If you need help dividing up marital property, we can give you a clear picture of your options, so you don't regret your choices later. Call the Law Offices of Molly B. Kenny at 425-460-0550 today to arrange a private consultation, or read through our free guide, 9 Urban Myths about Divorce That Can Hurt You.