Colorado homeowners who are preparing to divorce have a great deal of work ahead of them. There are numerous decisions that accompany a divorce process, and working through those options can be something of a challenge. Deciding how to divide the value held within the family home can be especially difficult, and often requires extensive asset division negotiation.
Many spouses hold an emotional attachment to their family home. While sentimentality is often a good trait, this is not the case when it is time to decide how to best handle the disposition of a significant investment. The decision on whether to sell the home or work out a solution that allows one party to retain the property should be made with a clear head and an eye toward the financial benefits of either option.
In some cases, spouses are able to come to an agreement in which one party remains in the home, while the other receives compensation for his or her share of the equity held within the property. This will require a professional appraisal, which can provide a snapshot of a home's value within the local real estate market. Once the value is determined, spouses can negotiate how to transfer half of that amount to the party who walks away from the home.
There could be a level of complication if both spouses are listed on the mortgage. Lenders have little interest in the details of one's divorce decree. Unless the spouse who stays in the home is willing and able to refinance on their own, the other party could be effectively "stuck" on the mortgage. This can make future home purchases difficult.
This is just one scenario that suggests the difficulties of asset division concerning a piece of property. There are many other issues that can arise as couples seek to dissolve their marriage. Savvy Colorado spouses will take the time to research all of the various options before moving forward on any large-scale financial decision that may arise during the course of a divorce.
Source: Reuters, Splitsville? How to divide property in a divorce, Geoff Williams, Oct. 7, 2013