Real estate in divorce

A divorce can only be legally finalized after a full year of separation. The couple must therefore have lived apart for one year before they can file for divorce. However, the property can be sold during this phase if the couple is convinced that reconciliation or a desire to live together again is futile. This helps to prevent disputes during the divorce proceedings. However, the relationship is often already so broken that other options are more likely.

After a year of separation, one of the spouses can demand the sale of the joint property. If the other spouse cannot be persuaded, they can even be sued in court for consent. This step can be avoided if you instead consult a real estate expert who is trained as a mediator. They can help you weigh up the interests of both parties.

Selling the property has the advantage that both spouses would receive the proceeds from the sale equally. This would allow them to pay off bank debts. The money could also be used to make a fresh start by investing in a new, smaller apartment. The disadvantage, however, is that a sale cannot be reversed and, in the event of a reconciliation between the spouses, the property is already "lost" and has new owners.

Renting out your own home has the advantage that the property remains in the family and can later be passed on to your children. In addition, the rental income can be used to service the bank loan. If you do eventually reconcile, the property is still there and you can move back in.

If the intention to sell is there but no agreement can be reached on the price, a partition auction can be held.

A partition auction is part of a foreclosure auction and can be requested independently by one of the partners at the local court. In principle, every co-owner is entitled to file a request, regardless of the size of their share. However, the risk with a partition auction is that the proceeds may be far below the market value of the property. This is a major financial disadvantage for both parties, as there are many bargain hunters just waiting for such properties to be sold. In addition, the costs of the expert opinion must be borne by the parties. These range between $1,000 and $2,500.

When it comes to hiring a real estate specialist, the question arises: Who will take care of it? And how do I know that the agent, for example, hired by my spouse, is not biased? Well, in the event of a divorce, mutual trust is often no longer there. So what is the best way to proceed? It is possible to hire two different real estate agents to work for you. However, this would mean that the commission would have to be halved. This is not a good incentive for the real estate experts, which will also be reflected in their work and prolong the sale. We therefore recommend that you agree on a real estate agent that you both feel comfortable with. Also make sure that the expert has mediation skills. They can weigh up the interests of both parties so that everyone is satisfied with the sale. If you still have concerns about choosing a real estate agent, you can seek legal advice from a lawyer.

The two agree on whether Mrs. Meier has to pay rent to Mr. Meier, whether she can continue to live in the house without making any further payments, or whether the rent payments can be offset against the mortgage costs for the house or the maintenance costs. To ensure that neither partner is disadvantaged, it is advisable to seek legal assistance in this matter.

If Mrs. Meier wants to continue living in the house with her children, she can alternatively pay off her estranged husband in the divorce settlement. To do this, the value of the property is offset against the remaining debt, i.e., the mortgages and loans that still have to be paid off. In the Meiers' case, the house is worth $300,000, they bought it 10 years ago, and still have $200,000 to pay off. This $200,000 would be paid by Mrs. Meier alone in the future. Since €100,000 of the house has already been paid off, she must also pay Mr. Meier €50,000. This option is only practical if the partner remaining in the house can afford to repay the loan on their own.

If Mrs. Meier continues to live in the house, there is another option for clarifying the ownership situation: The property can be transferred to the couple's children, either as a preliminary inheritance or as a gift, with Mrs. Meier continuing to live in the property for the time being. As the children's guardian, she can dispose of the house until they reach the age of 18. However, this alternative is more suitable for families with only one child. This is because disputes could arise later between siblings.

Splitting an apartment is an attractive option if both partners still get along well and can imagine living close to each other. However, this cannot be done without permission from the local authorities. It must also be entered in the land register.

If both partners want to move out of the house, there is also the option of renting out the house and sharing the income. This option is interesting, for example, if one of the children wants to live in the house later on.

In addition to the option of one partner remaining in the property and paying out the other partner, selling is one of the most popular options in divorce. Both parties receive half of the proceeds. It is important that the couple seek expert advice and have the property valued before selling. After all, the proceeds from the sale should form the basis for a new start for both parties.

When couples cannot agree, the only option left is often a partition sale. This must be applied for by one of the partners at the local court. However, compared to a sale, this usually results in a lower proceeds. Fortunately, the Meiers are able to reach an agreement without going to court and decide to sell the house together.