By Robert L. Mues   |   October 26th, 2019

Home’s Equity To Be Divided Equally Between Two Parties In Divorce

divorce real estate equityYou have agreed to a divorce. Now for the difficult and often unpleasant task of dividing the assets. Sure, you can agree who gets the tv and who gets the dishes, but the most difficult division is often how do you “divide” the house. Generally speaking, the home is considered a marital asset and the equity needs to be divided equally between the two parties.

Perhaps the home was bought by one of you before you were married. In that case it may be considered non-marital property. However, if both parties have been put on the deed or if the home was refinanced in both of your names, then the house will likely be considered marital property regardless of who paid for the house initially. Of course, if you purchased a home together during the marriage then it is definitely a marital property and the equity needs to be divided.  The sticky part about splitting the value of a home is that it is not a liquid asset.

Often one of you will want to remain in the home, especially if you have children attending school in the local school district and don’t want to have them uprooted and have to attend a different school.  So how do you determine how to divide the current equity of the home?

How To Divide The Current Equity Of The Home

The easiest way is to simply list the house for sale and divide the net proceeds after closing. After the closing costs, paying off the balance of the mortgage, and the realtor fees, then the remaining balance is typically split equally between the two parties. Unfortunately, if one of the parties wants to stay in the house but doesn’t have the means to refinance or pay out a fair share of the equity to the soon to be ex-spouse, then the judge would likely rule that the house must be sold.

Or, the two parties can agree to delay the sale, and divide the value at a later date. Whichever person stays in the home would carry the carry the responsibility of all maintenance, mortgage, taxes and expenses of the home. Any equity earned from mortgage payments from this time would typically be credited to the one who is paying the mortgage, taxes and expenses following the divorce.

So How Do You Decide The Value Of The Home?

Real estate agents and real estate appraisers are two sources and they both use a different methodologies to determine the value of a home. A real estate agent compares your property to other similar houses in the area that have recently been sold, or that are currently listed for sale. Typically, they will pick 3 other homes to compare yours to and then will come up with a suggested listing price. The actual sale price is usually negotiated during the selling process and often will net a lower purchase price. The realtor will usually if asked advise as to the “likely” sale price.  When an appraiser is hired to determine the value, it is a much different approach.

It is much more of a science that takes into account hundreds of variables, as opposed to comparing it to 3 or so other area homes. A real estate agent’s opinion as to the value is dependent on the present state of the market and also wanting to suggest a price that will make you want to hire them, as opposed to the strict system that a certified appraiser uses. So, when it comes right down to it in court, if both a realtor and certified appraiser testified, the judge would likely side with the appraiser’s valuation over that of the real estate agent’s opinion.

Hire Experienced Divorce Attorney To Help Divide Assets

You do not have to sell the house in order to achieve an equitable division of property. One of the two parties could keep an asset that has an equal value of the portion of the money that they would have been given if in fact the home had been sold. Generally, one party would receive the home, and the other would keep a 401K or pension account. It is important to note that the sale of a house generally is not subject to capital gains taxes, however a retirement plan is pre-tax income and therefore the value of that would need to be adjusted upon division.

Even though you agree that you need a divorce, even in the most amicable splitting situations, things can take a rapid turn south when it comes to finances and dividing assets. These can become very heated issues very quickly. I can’t emphasize enough the importance of hiring an experienced divorce attorney to help you navigate through the whole process.

The lawyers at Holzfaster, Cecil, McKnight & Mues are committed to providing our clients with excellent individualized representation and sound legal advice. Feel free to learn more about our firm at our website at .  If you live in the Dayton or Southwestern Ohio area and are considering a divorce, please contact us at (937) 293-2141 or email us here . We would welcome an opportunity to discuss your situation.

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Robert L. MuesAbout The Author: Robert L. Mues
Robert Mues is the managing partner of Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has received the highest rating from the Martindale-Hubbell Peer Review for Ethical Standards and Legal Ability. Mr. Mues is also a founding member of the "International Academy of Attorneys for Divorce over 50" blog. Mr. Mues has also been a dog owner for 55+ years, and just recently, he and his wife are the owners of "Ralph", a rescued mixed Wire Hair and Jack Russell Terrier.

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