How to Handle the Sale of Kansas City Real Estate When You’ve Untied the Knot
Selling Kansas City real estate is a huge undertaking that requires homeowners to invest significant time and effort. Typically, homeowners must deep clean and stage their home to make it more attractive to potential buyers. They also must address home repairs and perform essential renovations before taking it to market, both of which tend to be expensive.
After the property is officially listed, a real estate agent markets the home and hosts open house tours. This means homeowners must stay out of the way, which can be inconvenient for families with busy schedules or children.
Even under ideal circumstances, selling real estate is a challenge. For couples going through a divorce, the challenge becomes far more complex. In this blog, we’ll explore what to expect when dealing with Kansas City real estate that’s tied to divorce proceedings.
What Happens to Residential Real Estate When a Married Couple Splits Up?
A house is typically the largest asset that married couples share, and unfortunately, not all divorcing couples are on the same page about what should be done with it. For example, one person may be intent on selling while the other person is committed to staying for the sake of keeping the kids in the same school district.
When couples decide to dissolve their marriage, they usually explore several options.
Both Parties Agree to Sell the Home
This is the most common option for divorcing couples. Because the home is a shared asset, the profits of the sale are usually split equally between them. However, if the couple is upside-down on their mortgage, they are equally responsible for paying what’s owed on it after the sale.
Ownership Is Transferred Using a Quitclaim Deed
Quitclaim deeds are often used when one person owned their home prior to getting married and added their spouse to the deed at a later date. A quitclaim deed is a legal document that quickly transfers real estate ownership to one person.
Keep in mind, a quitclaim deed only applies to ownership. If the former spouse is on the mortgage, they must be removed from that as well, which can require refinancing. Otherwise, they will still technically be responsible for making payments, and their credit score can be affected if their former spouse ceases making on-time, full payments. This is usually not a risk an individual wants to take on.
The Home Is Converted into a Rental Property
If a divorcing couple is on good terms, they can agree to enter into a co-landlord relationship and use their real estate as a rental property. In this arrangement, the co-landlords split the profits on the money they make renting the home. However, they must also split the responsibility of upkeep and maintenance.
One Party Buys Out the Other for Ownership
This is a viable option for dissolving couples who have their own respective careers. The challenge is landing on a valuation of the home that both parties agree on. Hiring an unbiased third party, such as a real estate appraiser, can help settle the debate. The other challenge is that whoever is buying the other person out must qualify for a new mortgage using solely their income and credit score. Of course, if the home is fully paid off, they do not need to qualify for a mortgage unless they’re accessing home equity to buy out the other party.
Parties Enter into a Co-Ownership Agreement
Typically, this means one spouse gets to live in the house for a specified amount of time. Both parties are still on the deed and mortgage, but the terms of the living arrangement are changed. For example, one party may be allowed to stay in the home until their children reach a certain age.
What Is the First Step Former Couples Should Take?
A divorce can make it challenging to see eye-to-eye on real estate decisions. In an ideal world, former spouses can set emotion aside and approach the issue objectively. However, for former couples who are at odds, sometimes it’s best to get a professional involved who can assume responsibility.
In most cases, homeowners enlist the services of a real estate agent. They can provide an objective perspective, market the property effectively, and guide the parties through the sales process.
There are also real estate organizations that specialize in selling homes tied to divorce proceedings. The main advantage with these types of companies is that they can usually get a cash offer for the home, affording a quick close and giving both parties prompt access to their funds. For highly motivated sellers who want the process to be over and done as soon as possible, this is an effective method of selling Kansas City real estate.
Consulting With a Real Estate Professional Near You
You’re probably already familiar with how real estate agents handle property sales. Considering the current market conditions and high interest rates, listing your home for sale may not be the best option, especially if you value expediency. Due to high interest rates, homes tend to stay on the market for longer periods of time, especially if they aren’t in perfect condition, at a desirable price point, or in the best neighborhood.
To explore alternative options, you can contact a residential real estate investment group. After you share a little bit of information about your home and your goals for the sale, they can explain multiple options for selling, including a quick cash close option. They can answer all your questions so that you better understand the process and the current market. This empowers homeowners to make more informed decisions about their Kansas City real estate.
