Feb 28, 2011

In a Divorce, Is It Best to Sell the House?

Given that January was the month in which the most divorces were (according to the averages) filed, the question on a lot of former couples' minds right now is probably, "Who gets the house -- or do we sell it?"

The issue has only gotten thornier since the recession, with both house values and earning power down. As explained in the article, "Divorce Wannabees in the Age of Recession: How Trapped Couples Are Coping," by Roslyn Zinner of the Huffington Post, couples who are underwater on their mortgage or have significant other debts simply can't, in some cases, afford to split up the household -- leading to situations where, for example, one spouse "moves" to the basement.

Hmm, could there be a silver lining in Zinner's description of how couples don't fight over the house so much anymore, since neither wants to deal with the costs of homeownership? Okay, never mind.

Interestingly, one solution she describes -- in which the couple agrees to continue jointly owning the home, while one moves to an apartment, and they sell when the economy is better -- was exactly that arrived at (after much negotiation) by a Los Angeles couple described in the Financial Adviser blog titled "Breaking Up Is Hard to Do," by Zack Anchors, in the Wall Street Journal.

So, if and when the market turns around (whenever that might be, which no one can safely predict), we may see a flood of homes being sold by long-divorced couples!