By: Erin Idler, Attorney & Mediator and Jeremy Doering, Doering & Co. CEO/Founder

Family law and real estate often intersect, especially in the context of divorce and property division. When a married couple decides to separate, one of the most significant issues is dividing the family assets. Making decisions about real estate, especially the family home, has emotional, financial, and legal impact for both parties. Working with professionals, including a realtor, lender, individual lawyer or joint mediator, who understand divorce can help ensure a fair and smooth resolution for everyone involved. Here’s what you need to know.

The Family Home in Divorce

The family home is frequently one of the most significant assets involved in a divorce. It’s not just a place to live, but often carries emotional value and represents a shared family history. There are several options for dividing the family home in divorce:

  1. Sell the Home: This option allows both spouses to walk away with their share of the proceeds.
  2. Buyout: One spouse may buy the other out of their share of the property. This often involves refinancing the mortgage and paying the other spouse’s portion of the home’s equity.
  3. Property Transfer: Sometimes, the family home may be transferred to one spouse along with other property to offset other division of assets.
  4. Joint Ownership: While not common, some spouses choose to jointly own the home post-divorce, often for some designated period of time. Whether pending sale or longer term, it is essential to clarify decision-making and cost for terms such as occupancy, maintenance, repairs, timing for sale to avoid future conflict.

Note: If the home is not being sold, there will need to be an agreement on fair market value. Generally, this includes a market analysis by a real estate professional or a formal appraisal.

Advantages of Selling During Divorce

If you and your spouse are in the middle of divorce, selling the family home during a divorce proceeding can make allocation easier, but be sure to address this decision with your attorney or mediator and a realtor to ensure you consider the real estate market’s timing to maximize your home’s sale price, consider tax implications, and how proceeds are being disbursed.

Divorces can complicate real estate transactions, especially if one or both spouses are buying or selling property during the process. If you’re selling the family home, both spouses must be part of decisions and communication. If one spouse is purchasing a new home, you both need to consider the title, mortgage and payments that reflect your post-divorce agreement.

How Family Law Attorneys and Real Estate Professionals Work Together

Family law attorneys and real estate professionals often collaborate in divorce cases to help clients navigate the complexities of property division. Real estate agents provide expertise on property valuation, market conditions, and the logistics of buying and selling, while family law attorneys focus on the legal aspects of dividing assets and debts. Working together, they can create a strategy that ensures the fair division of real estate while considering both spouses’ needs.

Tips to consider:

  • The Role of Real Estate Appraisals and Valuations: A licensed appraiser can provide a detailed report and market analysis. A realtor who one or both spouses are working with can also do an informal market analysis. A realtor will also provide a “to do” punch list of what is needed before listing as well as marketing expertise. A realtor will develop a specific game plan outlining the optimal market timing, showing restrictions, and preparation for pictures.
  • Avoid costly mistakes: If a spouse stays in the home, consider the unforeseen related issues that will affect your sales price and valuation such as older roof, plumbing, and foundation issues. A real estate agent can assist in how to price your home strategically and correctly based on sold comparables, your property’s condition, and the current supply and demand. They will explain the difference between market price vs market value along with assessing market impact and referrals for inspectors and repair/remodel professionals. Other common Mistakes to Avoid Include:
    • Not Updating Deeds or Titles
    • Not addressing home mortgages—both refinance or assumption if keeping the home or qualifying for an individual mortgage if buying a new home.
    • Not having a Home Inspection
    • Not evaluating potential repairs or updates needed for sale or valuation purposes.
    • Working with a realtor who does not have divorce experience

Conclusion

Dividing real estate during a divorce is a complex process that requires careful planning and cooperation between experienced family law attorneys and real estate professionals. Input from (1) a lawyer (individually or jointly in mediation) about Wisconsin’s community property and divorce laws and (2) from a realtor about home sales, transfers, refinance, and purchases with guidance can assure you will avoid costly mistakes and reach a fair and equitable division of assets.