NEW BEGINNINGS

New Beginnings

Selling the Matrimonial Home in a Divorce By Daniella Gold, Harvey Kalles Real Estate

Some of the biggest questions that arise during a separation or divorce have to do with the matrimonial home: What’s my home worth? Will I need to sell? What if I want to buy my spouse out? What if they want to buy me out and I refuse? If you’re grappling with similar questions, read on.

Of course, this article is not to be construed as independent legal advice. Every situation is different, but we hope that this will help improve your familiarity with some important concepts.

WHY IS IT IMPORTANT TO KNOW THE VALUE OF A MATRIMONIAL HOME?

It is very important to determine the value of a matrimonial home in the context of a marriage breakdown. The home is often one of the most valuable assets, if not the most valuable asset that people own. Both spouses deserve to be compensated fairly for the value of this asset in the context of the overall settlement.

If the home is jointly owned and will be sold as part of the separation process, the value will be straightforward: it’s simply going to be the price the buyer pays. Often, the parties will simply agree to divide the sale proceeds equally, after adjusting for the remainder of the agreed upon property settlement.

WHAT IS AN APPRAISAL?

An assessment of the value of the home – also known as the “market value.” Market value, in short, is the highest estimated monetary value a property will bring if listed for sale on the open market. The value can be expressed as one number or as a range.

WHO CAN DO AN APPRAISAL FOR YOU?

Previously, only a certified appraiser’s report was acceptable to lawyers, mediators and judges. These days, however, licensed real estate agents can also provide appraisals. Many separating spouses are choosing to retain a real estate agent, or agents, jointly, to provide the appraisal, since real estate agents are the professionals most familiar with area properties and current market forces.

WHAT IF I WANT TO BUY MY SPOUSE OUT?

Many people sell their homes when they get divorced. When the decision is made not to sell, however, it’s crucial to take all possible steps to get the value right. These situations include but are not limited to:

• One spouse wanting to purchase the other spouse’s share of the home (i.e. exchange money for a title transfer) as part of the final settlement;

• One spouse keeps the city home while the other spouse keeps a recreational property, while compensating for the difference in value by trading off other assets;

• One spouse agrees to defer a buyout payment, essentially keeping their equity tied up in the house while the other spouse remains in the house with the children until the youngest finishes high school;

SELLING THE MATRIMONIAL HOME

• One spouse agrees to trade off lump sum spousal support for the other spouse’s half of the equity in the house, after adjusting for other entitlements.

In the event that the home is to be sold, the couple must decide whether they are willing to work with one agent to represent them both in the sale. If the couple cannot agree on one agent, they can each select their own and have the agents co-list the property. It is imperative that all parties involved in the sale of the matrimonial home understand that the agent(s) represent both sellers and must act in the best interest of both.

CHOOSING THE RIGHT AGENT

Selecting the right agent is always very important, no matter the scenario, but in a divorce situation, it is even more so. Having an experienced, neutral, full-time real estate professional on your side will make the listing and sale process a smooth one.

Decisions will need to be made by all parties involved in the listing, including:

• Which brokerage will be the primary listing brokerage?

• What price will the home be listed at?

• Who will prepare the home for sale?

• What listing strategy will obtain the best results for the sellers?

• When will showings take place? Who will be notified and how will they be notified? Who will confirm the appointments?

• What is the ideal closing date?

• What is the best method of communication for all parties?

Ultimately, the hope is that you will be able to move on with your life and begin a new chapter. The best way to do this is to minimize conflict along the way. Working together to sell your biggest asset will benefit both parties.

Daniella Gold is a principal with the RDK Divorce Group. For more information, visit www.rdkdivorcegroup.ca

photo credit: istock/baona