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Will the House Have to Be Sold if You're Divorcing?

Find out when you might need to say goodbye to your marital home.

Who Gets the House?

The “marital home” is the house you share with your current spouse and family. It can be the same house you lived in from before your marriage or a house you and your spouse purchased after the wedding. Who gets the house depends on where you live and if the house is joint property.

State law governs property ownership and asset division during a divorce. Your state will follow either community or equitable distribution property laws. For example, in a community property state, you and your spouse will split divorce assets in half. This could mean that you and your spouse are both entitled to 50% of the equity in the marital home. In an equitable distribution state, a judge will divide your property fairly—this doesn’t necessarily mean evenly or equally.

The date you acquired the house is an important piece of information in a divorce. Both in the community and equitable distribution states, a judge can’t award your separate property to your spouse. The property is usually designated as separate if it was a gift or inheritance or it was acquired before the marriage. Generally, spouses keep their own separate property in a divorce.

Can I Get the House Even If It’s Not My Separate Property?

You and your spouse can also reach your own divorce agreement dividing up marital assets, including the family home. However, if you leave matters up to a judge, the parent with custody of minor children will probably get to stay in the marital home.

A judge can award the marital home to one spouse as part of property distribution in your divorce. This assumes that the house qualifies as “marital” or “community” property and not one spouse’s separate property.

A court will look at several factors to decide who gets the house. These factors may include, but aren’t limited to the following:

  • each spouse’s financial circumstances
  • each spouse’s contributions to the marital home
  • each spouse’s age and physical and mental health
  • which parent has custody of the couple’s minor children
  • source of funds for the marital home
  • marital misconduct of either spouse
  • each spouse’s employability and job skills, and
  • the value of the marital home.

You and your spouse can also reach your own divorce agreement dividing up marital assets, including the family home. However, if you leave matters up to a judge, the parent with custody of minor children will probably get to stay in the marital home. This is because a home is seen as a source of stability for children embroiled in the midst of their parents’ divorce. Letting children stay in their childhood home also allows them to maintain the same friendships and attend the same school. One exception may be if neither spouse can afford to keep the home. In that case, a court may come up with a different solution.

Dividing Equity in the Marital Home

In most divorces, the marital home is a couple’s biggest asset. It’s also the center of family life and often serves as an anchor for families with minor children. If a judge determines that the marital home is one spouse’s separate property, the solution is simple: the spouse who owns it, gets it. It’s a lot more complicated when the family home is a marital asset.

Distributive Shares

A judge can award both spouses a share in the marital home. This means each spouse has rights to the value of the marital home. There are several ways to grant spouses their share of the marital home, such as:

  • requiring one spouse to pay for or “buy out” the other spouse’s share
  • awarding one spouse exclusive possession of the home for a limited period of time, and requiring the couple to sell the house by a certain date after that
  • requiring the couple to sell the house immediately and divide the proceeds as directed by the court, or
  • offsetting the value of the home by awarding additional marital assets to the other spouse.

Deferred Distribution

One way a court can divide a marital residence is by distributing the equity in your house on a future date, called a “deferred distribution.” For example, a judge can award you the marital home to live in until your youngest child turns 18, at which point the house must be sold. Deferred distributions are also common in cases where the housing market is soft and divorcing couples want to hold on to their home until the market picks up. As part of a deferred distribution award, a court will usually require one or both spouses to cover maintenance fees, taxes, mortgage payments, and home owner's insurance.

How Do I Prepare to Sell?

If you’re required to sell the marital home as part of your divorce, it’s not as scary as it sounds. In most cases, a judge will assign a certain real estate agent or you and your spouse can pick your own. Most couples are on the same page when it comes to selling a home because both spouses want to maximize their profits.

A listing agent can recommend any updates or strategies for selling. A divorce order will typically require couples to split the costs of updates to the residence. Once a home is under contract and sold, any proceeds must be split in accordance with the divorce order.

Questions for Your Attorney

  • Most of our net worth is tied up in our house, and I want to keep the home. Can I agree to take less alimony from my spouse to make things fair?
  • My spouse wants the house and I’m okay with it, but how do I get my name off the mortgage? I don’t trust that my spouse will make payments on time and I don’t want my credit affected.
  • I agreed to let my spouse stay in the house until the kids are older and we can sell the home then. However, I want to make sure my spouse pays for improvements and maintenance and keeps the home in good condition. How can I do that?

Santa Cruz Real Estate Agent Earns Divorce Specialist Certification

Century 21 Showcase, REALTORS ®, agent Patti Lyles completes training to become certified real estate divorce specialist.

Santa Cruz, CA. October 2, 2016 – Professional Realtor® Patti Lyles of Century 21 Showcase, REALTORS ®., has earned the Real Estate Divorce Specialist (REDS™) Certification, which is issued by the non-profit Financial Divorce Association. Patti is one of few who has earned the certification in the state of California.


“Every year 1.2 million couples get divorced. And over 70% of these divorce cases involve either buying a home, selling a home or both.   Divorcing couples often go through one of the most stressful times in their lives, and they need all the help they can get—not just anyone’s help, but knowledgeable help that only a Real Estate Divorce Specialist™ (REDS) can provide.  I am only one of eight Realtors in the state of California who have earned the nationally recognized Real Estate Divorce Specialist™ certification, “ said Patti Lyles REALTOR® .


Patti trained to help clients address legal aspects of the divorce process as it relates to real estate. She studied various legal rulings, tax policies, and regulations. This specific training allows him to help his clients who are going through a divorce take advantage of certain tax laws that are specific to selling a home during the dissolving of a marriage.

Patti is currently a member of NAR®.

To contact Patti Lyles, call 831-335-2100 or email Patti@PattiLyles.com

Real Estate Divorce Specialist

by Patti Lyles

Santa Cruz County Real Estate Divorce Specialist

If you and your spouse are divorcing, a specialist can be very helpful. In that case, why not hire a real estate agent who’s sure to be sympathetic to your plight? Real Estate Divorce Specialists are up on all of the legal and tax issues that divorcing couples face, and how these can affect property transactions. They can help you make decisions such as buying out your spouse or selling during divorce.

Patti Lyles

CaBRE 01385517

831-335-2100

Professional Help when Selling a house during a Divorce

by Patti Lyles


Letting a Professional Help You

Few events in life are more traumatic than divorce.   You truly need reasoned, dispassionate, businesslike treatment during divorce is what to do with your property.

CALL NOW 831-335-2100

Patti Lyles, Certified Real Estate Divorce Specialist (REDS)  will attempt at help you with that future by providing information, options and possible solutions regarding divorce and property division.  

Without a doubt, separation and divorce are two of the most painful life events there are but you can’t change the past; so try to learn the lessons the present offers, become educated on the next steps to take, and then focus on a positive future.

Patti Lyles

831-335-2100

Century 21 Showcase, REALTORS ®

CaBRE # 01385517

Email: Patti@PattiLyles.com

 

 

 

 

Providing Help During a Break-Up - Divorce & Selling your Home

by Patti Lyles

Selling the home at the end of a marriage calls for emotional sensitivity and an understanding of financial and legal complexities.

When a marriage dissolves, full-boil emotions can overtake reason as couples untangle their finances, routines, and other details of their life together. Practitioners who understand the complexities of selling a home during a divorce bring a compassion that’s just as vital to the process as their business acumen.

While the divorce rate has been trending downward for a decade, close to a million married couples still split each year. Those life transitions call for expertise that some consumers may not even realize they need from real estate practitioners.

It can be useful for divorcing sellers to consult with a local real estate agent well before they’re ready to put the house on the market, even before the divorce itself is settled or goes to trial, says Kelly Lise Murray, a law professor at Vanderbilt Law School.

Talk to a knowledgeable agent now!

A Santa Cruz County real estate professional experienced in the divorce niche can provide clients with step-by-step guidance to protect them-selves legally and financially. designation course (unaffiliated with NAR) called the Real Estate Collaborative Specialist—Divorce.

Patti Lyles, a sales associate with Century 21 Showcase, REALTORS ® in Scotts Valley, Calif., has been working with divorcing spouses for eight years. She had a client who tried to refinance after a divorce, only to learn there was a 10-year-old lien against the property. “No one thinks to run a background title report on a house,” she says.

Having gone through her own divorce battle in the early 1990s, Lyles says having patience with your clients’ predicament is important. “I know how traumatic it was to sell my house that I loved in an upside down market,” she says.

Patti Lyles deals with both sellers; She is sure to communicate with both equally. Avoids holding meetings that exclude either party. That can worsen trust issues.

Lyles has a background in law, but she’s careful—and warns other real estate practitioners to be careful—not to give legal advice. Agents should refer their clients to lawyers or financial planners to address legal questions and financial and tax considerations. She has a referral list.

 “If the house is handled incorrectly during divorce, one or both spouses may be ineligible to qualify for a mortgage, and thus unable to refinance the marital joint mortgage or buy a house with new loan origination for years,” Lyles says.

One mistake divorcing couples can make is not examining and making needed adjustments to the homeowner’s insurance policy. Just because two people are married—and on the deed—doesn’t mean they’re both named as insured parties on the home. If one spouse is listed only as an insurance beneficiary and remains in the home, he or she will not be covered after the divorce is final.

Although most of Lyles’s clients come through referrals, marketing is also important. Her website highlights her expertise and generates online inquiries regularly.

How to Sell a Home during your Divorce in Santa Cruz County

by Patti Lyles

A divorce is not something that anyone looks forward to nor expects when they tie the knot.  The reality is that divorce happens.  A divorce can be emotionally draining, frustrating, tricky, and many other things.

When you add into the picture a marital home, it can get downright crazy.  Homeowners who know what it takes and how to sell a home during a divorce increase the probability that the process is not absolutely miserable.

As a top real estate agent in Felton, CA , a area of the Santa Cruz Mountains area, I'm often asked by divorcing couples how to go about selling a home.  It's important as a Realtor® to be able to provide some sound advice for these divorcing couples and to help them through the process.

Below is a guide to help sell a home during a divorce.  There are recaps from some of the best articles relating to divorce and real estate.  Be sure to check out not only the recaps for information but also check out the actual articles as they are all top notch articles on divorce and real estate!

How To Hire A Realtor® During A Divorce

There are a handful of different options a divorcing couple has when it comes time to decide what to do with their marital home.  The most popular option is electing to sell the home immediately.  It's critical when selling a home during the divorce that you hire a top real estate agent who has experience in dealing with divorces.

Divorcing couples need to know how to hire a real estate agent in divorce since it is different than a traditional home sale.  There are specific questions and information that needs to be found out before hiring a Realtor®.  Some of the most popular questions to ask when interviewing agents include;

  • Have you dealt with divorcing home sales in the past?
  • How do you handle conflict with a divorcing couple?
  • Are you familiar with the neighborhood?
  • What is your list price to sale price ratio?
  • How do you plan on marketing the home?

These are just a few of the most common questions to ask when hiring a Realtor® during a divorce.  

Tips For Selling A Home During Divorce

There are many things that people don't think about while selling a home during a divorce.  For example, did you know there are tax implications that exist when selling a home during divorce?  Getting a divorce can impact the capital gains tax and exemptions.

Should You Hire An Attorney?

Whether you're selling a home during a divorce or not, it's always suggested to have an attorney representing your best interests.  When selling a home during a divorce, it becomes almost a necessity to have an attorney since there are many assets that are divided up.

What Other Advice Is Important When Selling A Home During Divorce?

It's very important when going through a divorce and selling a home that both parties are on the same page as much as possible.  One of the biggest areas that both spouses need to be on the same page is pricing.  Pricing a home properly is critical especially in a divorce situation.  The last thing that a divorcing couple wants is for the home sale to drag on for months and months.  Pricing a home incorrectly can lead to a home sitting on the market for months.

Another important piece of advice is that when selling a home during a divorce that the home is properly prepared for the market.  Just because a divorcing couple is going through a difficult time does not mean they are given a pass when it comes to home sale preparation.  Not preparing a home for sale will ultimately end up costing them more money and time in the future.  It's important that a divorcing couple remembers that the home sale is a business transaction and to attempt to set all emotions aside.

These are just a few of the most important advice that divorcing homeowners should follow when selling their marital home.  Again, knowing how to sell a home during a divorce can make all the difference in the world and decide whether a home sells or not.

Final Thoughts

The above article recaps and information as well as the resources below will help divorcing homeowners who are selling their home get through a difficult time.  Hopefully the home sale process will be relatively stress-free and more important, successful!

 

Contingency removal in a CA Purchase Contract

by Patti Lyles

Contingency Removal Dates are in the Purchase Contract, so take out your contract and not the dates.
 
If anything, this Century 21 Showcase, REALTOR is anal nitpicker for observing ALL the terms and conditions of the California Residential Purchase Agreement between her sellers and another agent’s buyers.  It came to my attention that many listing agents never ever ask for a contingency release, and they just blow it off, like some buyer’s agents will also blow off – adhering to the buyer’s duties under the terms of the purchase contract — oh, those annoying legal documents — but that doesn’t make it right much less legal.

According to California Civil Code and the California Bureau of Real Estate. “The Agency Disclosure” describes a listing agent’s fiduciary as “a fiduciary duty of utmost care, integrity, honesty and loyalty when dealing with the seller.” It goes on to say the agent must show diligent exercise of reasonable skill and care, and the same fiduciary pertains to buyer’s agent and even dual agents to their respective parties, if you can believe that.

Yet, who gives a crap about this, you might ask? That’s a reasonable question that should have a reasonable answer, but I don’t have one. I know I care deeply about my fiduciary.

When I represent a seller who enters into a residential purchase agreement with the buyer to sell a home, I remind the buyer’s agent when the contract contingencies are to be released. We remind the buyer’s agent when we enter into the contract, and again, a day prior to the contingency removal. I can’t count the numbers of times we have asked for a contingency release and been ignored. Oh, just don’t worry about it, seems to be the prevailing attitude from some buyer’s agents.

Someday those agents will be a listing agent. Someday these same agents might discover the unfortunate experience of standing in front of a judge, head hung, to answer: Did you show utmost care, integrity, honesty and loyalty? It’s not a place I have ever been nor a place I ever want to visit. But fear of reprisal is not my reason for following the terms of the purchase contact.

It is my fiduciary duty as a listing agent to request a home buying contingency removal for the sellers. If the buyers need more time, then buyers should consider submitting an Extension of Time Addendum for the sellers to entertain. If you were to read paragraph 14-B-3 of the RPA, it states: By the end of the time specified in 14-b-1, which is the number of days available to a buyer to complete all investigations, “Buyer shall deliver to Seller a removal of the applicable contingency.” It goes on to state that if the buyer refuses, the seller can ultimately issue a Notice to Perform and then cancel the contract.

It’s nothing personal when I ask for a contingency removal under the terms of the purchase contract. I am just doing my job and asking that the buyer’s agent do the same thing. If the sellers elect to cancel the transaction due to non-response, hand over the deposit to the buyer and send the buyer on his merry little way, that’s up to the sellers. In situations in which buyers fail to perform, I do have to give the sellers that option. It’s my fiduciary duty.

Santa Cruz County Short Sale Specialist

by Patti Lyles

Santa Cruz County Short Sale Specialist

Short Sale Specialist in Santa Cruz County

What is a real estate short sale in Santa Cruz County?

A quick sale in real estate, also commonly called a short sale, happens when a lender is willing to accept a lower pay off on a loan than what is currently owed due to the borrowers inability to continue making payments.

What does it take to qualify for a Santa Cruz County Short sale?

Short Sale Specialist Realtor in Santa Cruz CountyWhile lenders seem to be easier to work with lately regarding qualifications, there are usually three borrower qualifications that most lenders require for a Santa Cruz County short sale.

  1. Negative Equity - The proceeds from the sale of the property, after all closing costs
    are paid, are less than the amount currently owed on the property,
  2. Financial Insolvency - Financial insolvency means that the borrower has no other assets that could cover the deficiency (the difference between what is owed on the property and the proceeds from the sale)
  3. Financial hardship - Financial hardships that are acceptable do vary some from lender to lender, but the most common ones are; divorce or legal separation, loss of employment or reduction in income, job transfer or relocation, incarceration, medical emergencies or major medical expenses, death of a family member, vacant rental properties, damaged property, just to name a few. Most lenders believe that a short sale is not for home owners who simply want to sell, but for those who have to sell.

Is it possible for me to get money back for completing a short sale?

Until recent times, it was almost unheard of for a home owner to get money back in a short sale. Things have changed for the better. The HAFA program, backed by the US Government, allows homeowners $3,000 to use towards relocation expenses. In addition, some lenders will offer generous incentives of their own in addition to money offered through the HAFA program. We have seen home owners get as much as $35,000 back to complete a short sale.

Who will pay the Santa Cruz County short sale Realtors® commission?

In a short sale it is customary for a lender to cover all fees associated with the sale of the property, including your Santa Cruz County short sale specialist as well. In almost all cases, a home owner in hardship will pay no out of pocket expense to complete a short sale transaction.

How Can a Santa Cruz County short sale specialist help me?

As a Santa Cruz County short sale specialist, I have helped many home owners who are in a Short Sale Realtordifficult financial season get a fresh start with a short sale. Short sales are not part of our "basic training" as real estate agents, and are something that should only be left to those of us who are especially qualified and experienced. Experience is everything when it comes. I'll not only market your home in the traditional manor, but will guide you through this transition while simultaneously processing the short sale with your lender. Visit my website for more information on the short sale process.

 

Patti Lyles

License Number: 01385517

Century 21

831-704-7058

avoidforeclosuresantacruz.com

~ Your Santa Cruz County Short Sale Specialist Realtor® ~

 

WASHINGTON — Though lenders are boosting their attempts to curb record-high home foreclosures, fewer than half of loan modifications made at the end of last year actually reduced borrowers' payments by more than 10 percent, data released today show.

The report, based on an analysis of nearly 35 million loans worth more than $6 trillion, was published by the federal Office of the Comptroller of the Currency and the Office of Thrift Supervision. It provides the most detailed and broad analysis to date of efforts to stem the foreclosure crisis, which President Barack Obama is trying to combat with a $75 billion plan to promote loan modifications.

The report helps explain why many loans are falling back into default after being modified. Many borrowers and consumer groups contend that the modifications offered by the lending industry aren't very generous, despite more than a year of public prodding from regulators.

For instance, nearly one in four loan modifications in the fourth quarter actually resulted in increased monthly payments. That situation can happen when lenders add fees or past-due interest to a loan and spread those payments out over the 30- or 40-year period.

Perhaps unsurprisingly, the report found that loans were far less likely to fall back into default if a borrower's monthly payment is reduced by a healthy amount.

Nine months after modification, about 26 percent of loans in which payments had dropped by 10 percent or more had fallen back into default. That compares with about half of loans in which the payment was unchanged or increased.

"This new data shows that, in the current stressful environment, modification strategies that result in unchanged or increased mortgage payments run the risk of unacceptably high re-default rates," Comptroller of the Currency John Dugan said in a statement.

But regulators said they saw a positive trend in the data, collected from mortgage companies including Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc.

Traditionally, lenders have seen loan workouts as a way to get a borrower back on track after a temporary disruption in income. Now, with the economy sinking fast and foreclosures soaring, they are increasingly coming around to the idea to that more permanent changes are needed.

Among loan modifications made in the October-December quarter, about 37 percent resulted in a drop in payments of more than 10 percent, compared with about one-fourth in the first nine months of the year. Regulators saw that growth as a positive sign.

"The trend toward lowering payments to make home mortgages more affordable is moving in the right direction," John Bowman, acting director of the Office of Thrift Supervision, said in a prepared statement.

The Obama administration is aiming to help up to 9 million borrowers stay in their homes through refinanced mortgages or modified loans. Still, the faltering economy, driven down by the collapse of the housing bubble, is causing the housing crisis to spread.

Among the loans surveyed in the report, just over 10 percent were delinquent or in foreclosure, compared with 7 percent at the end of September, the report said. Delinquencies are increasing the most among prime loans made to borrowers with strong credit, it said.

 



 

Santa Cruz County median price home plunged

by Patti Lyles

February home price median retreats to $380,000
by Patti Lyles

The median price for a single-family home in Santa Cruz County plunged in February to $380,000, the lowest since January 2000, prompting one agent to declare the market has bottomed out.

92 sales, with homes in Watsonville, the area hardest hit by foreclosures, accounting for a record 33 percent.

And 66 percent sold for less than $500,000, the highest percentage in years, according to Gangnes.

In Watsonville, banks sold foreclosed homes at discounts of 30 percent to 50 percent.

A few examples:

124 Grant St. sold for $166,000, down from $490,000 in 2004.

38 Lower Cutter Drive sold for $215,000, down from $420,000 in 2003.

518 E. Lake Ave. sold for $235,000, down from $395,000 in 2002.

Those are not condo prices; those are single-family homes.

"We've hit our bottom in South County in single family," said Dee Dee Vargas, president of the Watsonville Association of Realtors. "If you're waiting to see if prices might drop a bit, you might miss the boat. We're seeing multiple offers. I've got more buyers than properties right now."

With a market full of "distressed" properties, banks selling foreclosed homes and homeowners seeking bank approval for short sales, closing a sale is "almost a miracle," she added. "We get a lot of curve balls thrown at us."

It might be a lender that insists on reviewing an appraisal before authorizing a loan or one that shuts down before providing the promised funds.

Entry-level buyers are taking advantage of FHA loans, but some are discovering there's a catch. Distressed properties need repairs to meet FHA health and safety standards, but banks want to sell the home as is and the buyers are stretched to come up with the required down payment.

Some investors competing with first-time homebuyers.

That's driven by a change in Fannie Mae and Freddie Mac guidelines. The two mortgage-buying entities had restricted investors to four properties. New guidelines allow 10.

Clients qualified for an FHA loan but the bank that owned the house accepted an all-cash offer from an investor.

"With banks, cash is king,"

Tai Boutell of Santa Cruz Home Finance predicts that interest rates for mortgages, pushed artificially low -- at or below 5 percent -- could go up by mid-year to the low 6 percent range. Buyers who wait until then hoping for prices to fall will pay more, he said.

For example, payment on a $500,000 loan at 5 percent would be $2,684 a month; if the home price drops 10 percent in six months and interest rate rises to 6.5 percent, the payment would be $2,844 a month.

While the low-end market is brisk, high-end activity has nearly dried up.

Only four homes sold in February for more than $1 million.

Longtime appraiser Glenn Fuller reported 212 listings in that price range at the end of last week.

"That's a lot," he said.

He tallied only 11 pending sales, leaving about 19 months of inventory.

In 2007. buyers were snapping up $2 million homes around the county. Now they just aren't selling.

Very few people can qualify under the new standards, Fuller said, and the typical buyer of the high-end properties had money in the stock market but doesn't seem as rich since the market tanked.

 

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Contact Information

Photo of Patti Lyles Real Estate
Patti Lyles
Century 21 Showcase, REALTORS
P.O. Box 67275
Scotts Valley CA 95067
831-335-2100

DRE #01385517