Welcome back to the Ox and Dine Law podcast. You know, one of the biggest questions in any divorce is what happens to the family home. And for a lot of people and a lot of families, your home is your biggest asset. It's where memories are made. There can be some emotional attachments there, but there's also a business decision that has to be made. So, in today's podcast, we're going to talk about your options and how the courts will approach the critical decision of how we divide the home and who gets the home in a divorce. And so, Christine, when we're talking about the house, that's just like any other asset that we have to divide. But most families have one house. They don't have several homes. They have one main house. And sometimes we fight over who's going to get the house and whether I want to keep the house or whether she should get the house, whether we should sell the house. So walk our listeners through Christine kind of some of those considerations that we usually see in determining how the let's start with how the house would actually be divided in the event of a divorce. >> Sure. I like to tell people you got three options. One buys, husband buys out, wife buys out, sell and split. Or one party buys out, other party buys out, sell and split. Um those are very broad options, but it's got to be one of those. So people ask me, well, can we just continue to own the house together? No, you cannot. the courts are going to look to separate that asset. Um, so one of the two of you is going to own it individually or we will sell and split it and there are so many considerations that go into that. Um, I encourage my clients all the time, please do not think of the house issue as a separate issue. It is combined with everything else. It's are you receiving child support or alimony that's going to help you be able to afford that house? Conversely, are you having to pay child support or alimony such that you no longer can afford this house? Um, those are some financial considerations just actually taking on the responsibility of the house. Uh, I can personally tell you it's a lot when you go from jointly owning a house to solely owning that same house. Um, everyone wants to say my spouse doesn't help. They don't do anything. I promise you they do. They do something. Even if it's just once a week taking up trash that you now have to do. So the bigger the more house you have, the more responsibilities that you're taking on. So um you know when you're deciding which one of these options would be best for you, which one you want to advocate for, remember to take it in consideration with everything else that's going on as well. >> And I would also say, you know, if there's a preference over who kind of gets first dibs at the house, if you have children, I would say that the parent that's going to be the primary caretaker if it's a situation where one person gets primary custody. So, you've got a situation where either mom or dad have primary custody and the other parent has less than half the parenting time and has a parenting time schedule. Well, if the parent that has custody wants to try and keep the house, in my experience, the court is going to at least give that parent the chance to keep the house. Doesn't mean that they have to. Doesn't mean they will, but they're the parent that has custody. They want to keep the children in that school district. They don't want to move the children out of the house. So, that parent, if they can afford it, if it makes financial sense, may try and keep the house. And so what you have to consider whether you're the primary custodial parent and you have custody or whether you're not is like Christine said number one does it make financial sense to keep the house? Now I will tell you five, six, seven years ago it made a lot of sense to keep homes because um interest rates were low and so let's say you had the house and you had this joint mortgage with your spouse. All right. Well, it was very easy just to refinance to take them off because it didn't really change your payment. Frankly, some people got a lower payment when they refinanced because interest rates were lower when they first bought the house. That has changed as everybody knows, although the interest rate is starting to slowly go down. Actually, the past couple weeks has actually started to slowly go down, but nothing where it used to be. So, what you have to consider there is if I'm going to keep this house, I've got to take on all the debt of the house. And if if my name's not on the debt or if my spouse's name is on the debt, I got to take them off or I got to get on the debt some way. And so I'm going to have to take on a mortgage. That mortgage is not free. That mortgage comes with an interest rate and a payment. So if you need to check with your lender if the interest rate is too high, the payment's going to be too high. You don't need to keep the house. Frankly, you need to see if your spouse will buy you out because they would be doing you a favor. And I love buyouts depending on who I represent. Keep in mind, if you are the person not keeping the house, that means your spouse is keeping the house and you're they're buying you out. So what do I mean by that? Let's say there's $500,000 of equity in the house and you're you're owed half of that, $250,000. Well, we decide that equity based on what the house is worth. >> So, if the house is worth a million dollar and you owe $500,000, that's $500,000 of equity. You're owed half arguably, you know, let's assume that's the agreement. You owe $250,000, which is half of $500,000. Well, the good news for you is if your spouse is willing to buy you out, they stroke you a check for $250,000. You get to walk away with cash in your pocket and they're stuck with a house, >> right? >> That has equity in it, maybe some, but not as much as it used to because they just gave you $250,000. And the good news for you is that's no different than if you are a seller >> and you've got a buyer that comes in off the street and offers you top fair market value. >> Yep. >> Right. You get a check for top list price and you walk away and it's your spouse's problem later. Like real estate commissions, closing cost, repairs. What is the house actually going to sell for? It may list at a million dollars, but it may not sell. Maybe it sells for 900 or 950. Now you've been actually overpaid. Yep. >> And you got the benefit of that bargain. So, I'm always thrilled in situations where my client doesn't want to keep the home and the other side, for whatever reason, does and they're willing to buy my client out because that's a great deal for that person because they get to walk away cash in their pocket and then that other person has to deal with all the consequences of owning the house, >> right? Also, like I said, when you're considering the house in consideration of everything else, let's talk about a scenario where there's not a lot of equity in the house. There's some, but nothing substantial. um you might be able to trade that equity for more retirement money or for maybe you know more in a different area. So if you you always get to work with your equity, you can take it in equity. You can you're going to get your equity if that's what you if you go to court and say I want my equity. That's the only judicial response that can be is either okay then they buy you out or it's sold and split. So you know you can force that but also remember that you just use it as currency. And so let's say you were only owed $12,000, maybe you know that y'all recently bought the house or maybe you've recently refinanced and so there's not a lot of equity there and if you're owed a small amount, you can maybe just ask for an offset and get you a little more retirement money. >> Well, that's true. And and you know, I kind of gave the scenario of the person getting bought out. You may be the person that decides to keep the house. Let's say that your name is already the only one on the debt. >> Yeah. Or a lot of mortgage companies are letting people assume the current mortgages, right? So instead of having to refinance, the mortgage company might let you assume the mortgage, which takes your spouse's name off and it doesn't change your interest rate. That may make sense like Christine said, especially if you have other assets to divide because you're not having to refinance. You're not getting a higher payment. The equity is still in the house, but you are taking less money from a different asset and you're keeping the house in exchange. That would be a scenario where it makes sense to actually keep the house. Especially if you're worried about being able to replace the house. Let's say you love the house. It's your dream home. You got your man cave in the basement. You got your girlfriends down the street and you're close. You don't want to separate from them. Let's say you're in a good school district and you think it would be hard to replace the house in that school district. There's still really good reasons why it would make sense to keep a house. >> Sure. Like me personally, um, prior to my divorce, I had refinanced during COVID at a 2.64 interest rate. So, there was no way I was letting go of that. So, I found another way to buy out my equity because my name was already on the mortgage, the only one on the mortgage. So, I didn't want to mess with that in any way. That was a top priority for me was to keep that very, very low interest rate. >> That's right. And if you're going to buy your spouse out, there's some tricks there. They don't always work, but try to see if you can get the amount of equity reduced by a 6% real estate commission, for example, because at some point you're going to have to sell it or you may have to make repairs or you're going to have to pay clo closing costs. So try to deduct those amounts off the top before you calculate what the equity is. And that may save you a little bit of money. I will say at the end of the day, if nobody wants to keep the house, what's going to happen to the house? >> You sell it and split it. >> Sell it and split it. And that obviously is the fairest way to divide the house because the true value of the house is what somebody's want to pay for it. So it goes on the market for sale and then it sells and whatever it brings, the parties equid divide. Nobody gets overpaid, nobody gets underpaid. Um, and that certainly happens all the time. We do plenty of cases where nobody wants the house for whatever reason. We sell it and then we split the equity. And under that scenario, we then have to address who's going to stay in the house and who pays for it until it sells. >> Right. And I do get the question often. I mean, if we're listing it today, can we both just live here until it sell? Yes, you can. Especially by agreement. If you guys are cordial enough, it may be slightly uncomfortable or awkward, but you're not in a dangerous situation. Um the kids aren't experiencing any toxic home environment or anything. um then yes, it makes sense to just just like you would if you were a married couple, live there until it sells and then you each go your separate ways. >> But if you don't have a great household environment and you're not getting along, you don't have to stay there until it sells. So keep in mind, we can still have a situation where one person moves out, the other person stays in the house, they're responsible for the expenses, for example, and then once the house sells, we divide the equity. Some other things that may go into that, but that's probably enough for this podcast. Have we given these folks too much information about the house or did we make it more simple? >> Hopefully it was helpful to you guys and we didn't over complicate it. Actually, I think it was good solid advice. Again, decisions about uh your home or some of the toughest issues we deal with. uh but with offices in Sania and Athens, we are available anywhere you may need us in the greater metro Atlanta and Athens area to assist you and not only uh figuring out how to divide your home in the event of a divorce, but any other family law issues that you may have. Be sure to follow us, subscribe, check us out for the next podcast. We'll see you next time.