When Raleigh real estate was booming, couples who divorced would fight over who got to keep the house. Each one expecting the winner could get rich from the rapidly appreciating Raleigh home prices. With the downturn in the real estate market couples are now fighting about how to dispose of their homes without both sides losing more than the marriage.
Raleigh Real Estate Marital Asset not Always an Asset
In an appreciating market it is easy to sell a home and split the proceeds allowing you to move on with your new life. It was also easy to refinance your Triangle property or take out a home equity line of credit and buy the other party out. Today’s lending guidelines have tightened, appraisals are no longer inflatable and the residential property has become a new major battle ground. Raleigh real estate is a hot potato neither spouse wants to hold on to.
Falling Raleigh Home Values Spell Trouble
Home prices across the country have fallen the past 24 months. Raleigh has not been hit as hard as some parts of the country but, the Triangle market is down and for many couples divorcing find themselves upside-down and facing another stress they had no way to predict.
We walk down the aisle, buy our first home together and believe our marital bliss will last forever. 60% of all marriages fail, 70% of all second marriages fail, if you add those percentages to the falling home prices it spells TROUBLE! Many couples facing divorce are finding themselves “upside-down” on their home mortgage. Meaning they owe more for the Raleigh home than it can sell for in today’s real estate market. If they bought their Raleigh home in the past two years and need to sell it now, they are in trouble. If they refinanced in the past 3 or 4 years and took their equity out, they are in trouble. If they took out a home equity line to pay off credit cards, go on vacation or buy a new car, they are in trouble. Many Raleigh homeowners facing divorce are in financial trouble. Divorce has enough stress and heartache of it’s own, now it has the negative effect of home equity to factor too.
Divorcing Raleigh Homeowners Have Options
In the past, the spouse keeping the home would refinance the home mortgage under his or her name. But if their home is worth less than your mortgage balance, you can’t refinance without coming up with a lot of cash. Many couples are abandoning their homes to foreclosure and damaging their credit for years to come. Others are living together as “platonic roommates” confusing distraught children and keeping everyone from healing and moving on. Some couples continue to share the mortgage payment and are waiting for the market to return. Depending upon how upside-down the mortgage is this could take years of payments. While all of these are options there are others that may be better and should be explored as well.
More Raleigh Home Options
Another home option is contacting your bank to see if they would allow you to negotiate a loan modification so you can keep the house with a more affordable payment. The other is renting your investment and waiting for it to be sold at a later date when the market is more favorable towards profit. When people are stuck in a house, so much gets put on hold and peace of mind is a lot more important than a piece of land. If all else fails and the marriage and Raleigh home can not be saved the best solution is a short sale. To learn more about dissolving a marital asset through short sale.
If you have any further questions or need help in navigating a sale after separation and divorce, please call me at 919.235.0007.
Linda