Residential R.E.
What About
the House?
By Brian Kusmer
F
or most couples, their largest asset and the source of their equity and monies is all tied up in their
home. During the division of assets, it can often become the elephant in the room. So they must
ask themselves several questions:
1. Can either spouse afford the home alone post-divorce?
2. Considering child custody will they need similar accommodations post-divorce?
3. Do the parties even want to keep the home if they can afford to do so?
4. If they decide to sell, they must discuss price, improvements, etc.
Two New Homes
Once the two parties have weighed their home considerations, they may look into the process of
selling the home and finding two new ones. The couple will need to get an appraiser to set the value of
their home before they get it listed. The clients will need to be careful in selecting an appraiser. As I’ve
advised in previous articles, several appraisers are wary of overvaluing homes, so they may actually undervalue your client’s home. This should be a particular concern if the home has received updates and
modernization in a neighborhood of homes that are more outdated.
After the clients have received an estimate, they need to consider if they should make improvements
before listing. Will a quick paint job, new carpet and some touch-ups vastly improve the value of the
home? They will need to weigh the cost, time and value of these improvements. As all real estate professionals know not all renovations provide a return on investment. In a divorce, however, the main concern may not be the money, but the time. How long are they willing or financially able to maintain the
original home? If they can afford to move into two new residences and maintain the original property,
then there may be more room for improvement. If, however, the clients need to sell the home and untie
their assets to find new residences, then a quick sale may be the right solution.
Another thing most attorneys will need to take into consideration is the time children will spend
with each parent. In Arizona, the law encourages equal parenting time, so clients will need to consider
how much spac e they will each need in their new home. If the children will be spending the majority of
their time with the mother, then her residence will need to accommodate their presence. In addition to
space, the clients will need to assess their income in light of alimony or child support—it could greatly
affect the size and location of their home.
One Spouse Maintains The Original Home
Brian Kusmer is a long time Scottsdale resident where he resides with his wife, Amber,
and their three children. As a local realtor,
he is responsible for the sale of tens of millions of dollars’ worth of real estate each
year. His clients vary greatly from investors
to homeowners to commercial real estate
and land development clients. Over the
last 15 years, Brian has received many accolades, honoring his competency as a realtor.
As a Re/Max agent, he was honored in the
Re/Max Hall of Fame, the highest tribute
available. He has also earned the Lifetime
Achievement Award. Currently, he is a member of the HomeSmart Elite Group and is a
recipient of the Diamond Club Award. Brian
can be reached at 602-469-5823 or at [email protected]. For more information
feel free to visit www.teamkusmer.com.
If your client or your client’s spouse decides to maintain the original residence, then there are several
issues to consider:
1. How much equity is in the home?
2. Is the equity community property?
3. What is each party’s liability on the mortgage?
In order to assess the value of the home, the client will still need to bring in an appraiser to set a
value. The spouse that is no longer occupying the home will need to be compensated on their share
of the equity. Considerations will also need to be made for the vacating spouse. They will need to find
another home. The same conditions will apply to their house hunt. How much parenting time do they
have? Can they find a home in the school district? What can they afford on their own, considering any
alimony or child support payments?
Divorce is a messy time. Attorneys are always telling me that they see good, honest people at their
worst during a divorce. While we worry about the long-term effects of divorce on children, we sometimes forget how scary it is for adults. They are going through an entire change of life. For some, they
are thrown back into the workforce; for others, they are leaving a routine they’ve known for years, for
decades. Amongst all the chaos, the mud-slinging, the anger, the betrayal, they are losing their home.
Where will they be living? Can they afford to live there? Will their kids need to move school districts?
How long will their home be on the market?
Almost 10 years ago, my wife and I went through a divorce. All personal issues aside, managing
the sale of our 10 homes in the Scottsdale area was a headache. Even though, or perhaps because, I
then had 10 years of experience, my wife did not trust my opinion of the value on the properties. It
all snowballed from there. If we would’ve brought in a neutral party to manage the assessment of the
homes, it would’ve been easier on both of us and certainly on our son. As divorce rates are rising, ask
yourself, do you have a go-to real estate professional who can help you and your client? If you have any
questions or want more information, don’t hesitate to call or email.