Forum Index
»
Off-Topic
Unbiased opinion: home disposition during a divorce
![[Post New]](/jforum/templates/default/images/icon_minipost_new.gif){kind=icon}
Anonymous
|
My ex and I cannot seem to come to an agreement regarding the house. I'm hoping to poll the audience for an unbiased fresh perspective.
We owe $380K on it and it's currently listed for $410K. We and the realtor feel it's priced fairly, and we've come down from a starting point of $440K in April, right as the housing tax credit was expiring. You can do the math and see we can't go much lower at 4.5% commission to the realtor before we are underwater. Neither of us wants to live in the home, both for different reasons. My ex and the realtor think $2600/mo is a good price for monthly rent (pets allowed). I feel we could get $2800 by allowing a pet. We would have to agree on repair costs, covering incidentals, who gets the tax credit, etc if we keep the property and rent it. Lastly, we don't agree on much of anything and there is still contention in the marriage. What should we do? Sell at a loss (how low do we go, if he refuses - do I cover the difference just to get free of it?), rent and learn to negotiate a truce in the financial realm, or is there another option? |
Anonymous
| I would sell the house now. You want your life to be easier after divorce. You don't want to be tied to your ex- through this house. Even if you rent it, imagine the lawyer costs you might have to incur to get rid of it later if you can't agree - might be worth it to just swallow $10,000 loss now versus pay it to legal counsel later. |
Anonymous
| I would sell. If you want to go your separate ways, why would you want to be tied into owning the same property? Besides, if you own the house as tenants by the entirety, you should find out what will happen upon divorce under your state law. For example, if the divorce will automatically convert the title to tenants in common, then one of the tenants would be entitled to sell its interest to someone else. If you have confidence in your relator's opinion on the house price, maybe you should just sit tight and keep it on the market. |
Anonymous
|
If you decide to rent it out, use a management company. Any repairs come out of the rental income. Possibly even set up a business account for the property that in which you maintain a minimum balance for repairs, improvements, etc. In other words, treat it as a business in which you are co-owners. Real estate isn't generally the best investment, but you could think of it as a joint investment for your kid(s) if that helps the two of you work better together.
By the way, I don't think you get a tax credit for the mortgage on house that is not your primary residence. And in some areas the property taxes are higher for rented properties than for owner-occupied. And if you eventually sell it for a profit, if it has not been owner occupied for 2 of the 5 years before selling you don't get the capital gains exemption. I'm sorry you are having to deal with the rotten real estate market on top of a divorce. |
Anonymous
|
I'd sell it for a loss. I recently became a landlord (moved to a different city, but kept my DC apartment.) We use a property management company, but being a landlord has been more stressful than I anticipated -- getting a tenant took a while (we were renting it out in the winter, which, I'm told, is a bad time to rent) and there have been more repairs than I thought. If the issue is money, I'd suck up the loss now and go your separate ways with your husband, rather than trying to make the rental work.
Whatever you choose to do, good luck to you. |
Anonymous
| I'd sell. It would terrify me to maintain financial ties with an ex. |
Anonymous
| Being a landlord is very stressful even if you aren't going through a divorce. Keep the house on the market and drop the price as fast as your (ex-) spouse will agree to. |
Anonymous
Agree with this. It will hurt in the short run but it will be better in the long run. |
Anonymous
|
OP,
You're close on the rent. Aren't there taxes advantages to keeping the house as an investment or is that complicated as far as splitting deductions? Do you have children with him? |
Anonymous
|
OP here: our mtg payment with property tax included is $3200. We have a 1st and 2nd note, both ARMs. Rates are now ~4.25% or something really low, but will adjust.
We have kids, but they are part of the reason I won't live there anymore... it's very complicated and I don't want to divulge anything here on a public forum. So, the diff between rent and mtg payment is <$600> and that's not including the month's rent that the realtor collects as a fee. |
Anonymous
Seriously, this is a dumb suggestion - why would anyone want to buy less than a 100% interest in a house unless the other owner is a family member or a very, very good friend. Unless you somehow figure out a way to have 100% of the owneship transfered to you in the divorce, you will be stuck with your DH until you get rid of the house. I agree with the other posters who say that if you really want a clean break, sell it now (or buy his share, if you can afford it). |
Anonymous
| You can deduct the operating losses on the rental (up to a certain income level - $100K MAGI starts to phase out) |
Anonymous
It's not dumb at all - what this means in reality is that the other tenant in common can mortgage his/her interest. |
Anonymous
| No, it doesn't, because mortgage companies don't lend on partial interests. It's worthless. |
Anonymous
| You are talking about very small sums of money relative to the value of freedom from your ex. Sell. If you lose a bit, so what. You really aren't talking about much money. |