When homeowners in California get a divorce, they will need to figure out how they are going to divide the house. There are two common mistakes that people often make. One is not realizing that neither person can afford the home on a single income, and the other is not removing one person from the deed.
One woman negotiated for six months to keep the home only to realize in the end that it was too expensive. She and her ex-spouse ended up selling the home. An immediate sale is one option, but according to one lawyer, this usually only occurs after a judge has ordered it.
Even if one person can afford the home, there could still be problems. One person could sign the house over to the other or one might buy out the other. Not taking the other spouse off the deed can seem like a way to reduce paperwork, but if the owner goes into foreclosure or wants to sell the house later, it could be a problem. It is better to make the legal and financial separation complete.
Couples might also decide that they will wait until their children are older or the market is better to sell the home. They might try a short-term nesting arrangement. This means the parents alternate living in the home while the children remain there full time.
Accurate asset valuation can be an important element of property division at this stage. If one person keeps the home in exchange for another asset, the couple should look not just at what each asset is worth but at the costs associated with the asset. For example, there may be property taxes and upkeep for a home, but a retirement account could be taxed on distribution with penalties for making withdrawals before reaching a certain age.