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Dividing multiple homes in a divorce

On Behalf of | Sep 20, 2023 | Divorce

Financial decisions play a big role in any divorce. For a lot of couples, the biggest financial decision they have to make is what to do with their house.

What happens, however, when a couple owns more than one home? Whether it’s a vacation home or an investment property, having multiple homes to handle in a divorce raises the financial stakes for everyone involved.

It’s all about the equity in the marital pot

Georgia is an equitable distribution state, so that means that the court will aim to divide the marital assets fairly. Assuming that all of the real estate you and your spouse own was acquired during the marriage, you each deserve a share of the total equity.

Since you can’t divide anything until you know what it’s worth, the first step is to have each property appraised. You and your spouse can either use the same appraisal by agreement or pay for separate appraisals so that you can compare the two.

Once you’ve fixed the value of the equity (the property’s current market value minus anything you still owe on it) in each property, you have a couple of options:

  • You can sell all the property and divide the proceeds. This is the easiest solution for a lot of couples, since it allows both sides to “cash out” their investment and walk away. That cash can be helpful when starting a new life, and many couples don’t want to be tied down to a specific property when they’re ready to move on. It may also be the only solution if you cannot agree to divide the property any other way.
  • Each of you can keep one property. If you can agree on who should get each piece of property, you can each refinance the property you want into your own names so that it ceases to be jointly owned. Refinancing will also allow you to pay off the old mortgage and free up some cash that can be used to even out any disparities in equity that exist.

For example, imagine that your main home has $300,000 in equity and your vacation home has $200,000 in equity. You wish to keep the main home and your spouse wants the vacation home. You would likely need to pay your spouse $50,000 (one-half of the difference between the equity in the home you’re keeping and the equity in the home they’re keeping) in cash or by giving up other assets (stocks, bonds, collections or anything else with real value) in your settlement.

This is a relatively simple explanation of what can happen when you’re dividing up multiple properties, and it doesn’t take into account situations where some properties were acquired prior to marriage or situations where it seems unfair to divide property equally. To understand how things are likely to work in your case uniquely, it’s wise to seek personalized legal guidance.

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