Clients who are splitting up present different challenges to the real estate agent when it comes to dealing with the options available for disposition of their property and any equity involved. Recorded documents of how ownership has been taken and how the loan documents were drawn will help determine what happens to the home upon legal dissolution of a relationship.
If there are many large assets involved in the split, one party may choose to assume full responsibility of the property while any other owners quit claim their ownership rights. Quit claiming any right to title and still being on the loan doesn’t relieve a person’s responsibility to make payments. Arrangements must be made as to how payments will be made, or the sole owner will have to refinance and get a new loan.
Another option is that one owner may want to buy out the other. In this case, that person will have to pay the departing owner half of the market value. This may be difficult to achieve because enough cash must be available to do the buyout. A refinance would likely be part of this option.
The most common option is when the separating owners decide to make a clean break by selling the house and splitting the remaining equity. As sellers, they each benefit by walking away from the relationship with some equity in hand.
Please contact me to help you with the available options when you have clients who are dissolving their relationship.