By Sara Pitcher
Cordell & Cordell Noblesville, Indiana Divorce Lawyer
Especially in a down economy, divorcing couples may not be in a financial situation where one party can afford to keep the residence.
In that case, the parties can agree to list the marital home for sale and include provisions in their property settlement agreement to provide for selecting a realtor, what repairs must be done prior to listing the home for sale, what should be fixed after the home is on the market, how to divide such costs, and what to do in situations where the parties do not agree on an expense.
The parties can also involve the court in these decisions.
The court may order the parties to sell the residence at a certain price, etc. If one party is unreasonably withholding consent from the sale of the residence, the other party may ask the judge to order the home sold at any offer at or above the appraised value of the home.
Occasionally, the value of the home is less than what the remaining amount of the mortgage. If the parties must sell the home because neither is able to afford to keep it and they do not have sufficient funds available to pay the difference in the value of the home and the mortgage, the parties may consider a short sale of the property.
In order to qualify for a short sale, the parties must demonstrate an actual hardship that is forcing them to sell the home. Prior to listing the home for short sale, the parties will have to obtain an authorization letter from the bank.
Unfortunately, a short sale will have a negative impact on the parties’ credit and there will be limitations on future home purchases for the next several years. Similar to a foreclosure or bankruptcy involving a home, the parties listed on the mortgage for the home in short sale will not be able to qualify for a conventional loan for four years, an FHA loan for three years, or a VA loan for 2 years.
If a short sale is one option you are considering, you may wish to speak to a mortgage loan officer about the impact on your credit and the consequences as applied to your future home purchases.
Cordell & Cordell has divorce lawyers for men located nationwide.