What Happens When Both Spouses Want the Same House?

One of the hardest decisions in a divorce is deciding what happens to the family home. Sometimes the answer seems obvious: one spouse wants to keep the house, while the other wants to sell it. But what happens when both spouses want the same house?

This situation is more common than you might think, especially when the home has significant equity, a favorable mortgage rate, or sentimental value. When both spouses want to keep the marital home, the goal is not necessarily to determine who “deserves” it. Instead, the spouses need to find a solution that is financially realistic and fair.

Start With the Numbers

Before deciding who keeps the house, both spouses should understand its actual financial value.

This usually means determining the home’s current market value, subtracting the outstanding mortgage and other liens, and calculating the available home equity. A professional appraisal can be helpful if the spouses disagree about the home’s value.

For example, if a house is worth $1 million and the mortgage balance is $400,000, there is approximately $600,000 in equity. That equity is an important part of the overall property division in divorce.

But the value of the house is only one piece of the puzzle.

Can Either Spouse Afford to Keep the House?

Wanting the house and being able to afford it are two very different things.

The spouse who keeps the home may need to qualify for a mortgage refinance or otherwise demonstrate that they can afford the mortgage, property taxes, insurance, maintenance, and other expenses.

The spouse keeping the house may also need to compensate the other spouse for their share of the equity. This can be accomplished through a buyout, an offset involving retirement accounts or other marital assets, or another negotiated arrangement.

What If Both Spouses Can Afford the House?

If both spouses are financially capable of keeping the home, there are several possible solutions.

1. One Spouse Buys Out the Other

The most straightforward solution is for one spouse to buy the other’s interest in the home. The parties agree on the home’s value, determine the equity, and calculate the amount needed to compensate the spouse who is giving up their interest.

2. Offset the Home With Other Assets

A cash buyout isn’t always necessary. The spouse keeping the house might give the other spouse a larger share of retirement accounts, investments, savings, or other marital property.

For example, if one spouse receives the house with $500,000 of equity, the other spouse might receive additional retirement or investment assets to balance the overall property division.

3. Trade Other Property for the House

Sometimes the spouses have several significant assets. One spouse might receive the house while the other receives a business interest, investment account, vacation property, or other valuable asset.

This can be particularly useful when there isn’t enough cash available for a traditional buyout.

4. Sell the House and Divide the Proceeds

Sometimes the best solution is also the simplest: sell the home.

Even when both spouses want to keep the house, neither may be willing or able to give the other enough value to make the arrangement work. Selling the house allows the parties to divide the net proceeds and move forward separately.

5. One Spouse Keeps the House for a Limited Period

A temporary arrangement may make sense when children are still living at home.

For example, the spouses could agree that one parent will remain in the home until the youngest child graduates from high school. The agreement would need to address mortgage payments, maintenance, taxes, insurance, repairs, and what happens when the agreed-upon date arrives.

6. Delay the Sale

Another possibility is to postpone selling the house for a specific period of time. This can give the family time to adjust to the divorce or allow the housing market to improve.

A written agreement should clearly establish the future sale date and responsibility for expenses during the interim period.

7. Buy Out the Other Spouse Over Time

In some cases, the spouses can negotiate an installment arrangement rather than requiring an immediate lump-sum payment.

For example, one spouse could keep the house and make agreed-upon payments to the other spouse over several years. This type of arrangement needs careful drafting, including what happens if payments are missed or the house is sold or refinanced.

Consider the Children

When children are involved, their needs may also be part of the discussion. Maintaining the children’s home, school district, neighborhood, and routines can be important considerations.

However, parents should be careful not to make a decision based solely on emotions. A house that provides stability but creates overwhelming financial stress may not provide the long-term stability the family needs.

Mediation Can Help Find a Solution

When both spouses want the same house, the disagreement can quickly become emotional. One spouse may feel that they are being pushed out of the family home, while the other may believe they have a stronger reason to stay.

Divorce mediation provides an opportunity to look at the financial and practical issues together rather than turning the decision into a courtroom battle.

The goal isn’t for one spouse to “win” the house. The goal is to find a fair divorce settlement that considers the home’s value, available equity, other marital assets, the family’s financial circumstances, and each spouse’s ability to move forward independently.

Sometimes one spouse keeps the house. Sometimes the house is sold. And sometimes a creative property settlement gives both spouses something they need.

When both spouses want the same house, there may be more solutions than either spouse initially realizes. The key is to look beyond who gets the house and focus on what makes the most sense for everyone’s financial future.

 

Interested in reading more about this topic and many others?  Please visit my Helpful Articles, Links, and Books page –  https://rissmediation.com/helpful-articles-links/ or my blog at https://rissmediation.com/blog/.

 

For more information about divorce and mortgages, go to https://www.bankrate.com/mortgages/what-to-know-about-divorce-and-mortgage/.