Guide to Co-Owning the House after a Divorce

An unhappy woman and a man talking at a desk while going through paperwork.

Divorces are often incredibly messy in a variety of different ways. In the aftermath, feelings might be hurt, children may be affected, and financial security may be shaken. On top of that, marital property must be amicably split between separating parties. And although that might be easy for some investments, the same cannot be said for houses. Therefore, after a divorce, some choose to remain a house co-owner. In fact, it’s frequently the most sensible choice after a divorce since it gives you time to think carefully about what you want to do with the property. Here is our trustworthy guide to co-owning the house after a divorce that will surely come in handy!

Weigh in different options

Before you decide what to do with your property, it is time to weigh in on the options at your disposal. This is incredibly important since a house is a costly investment that can make or break your entire financial future.

Here are the four options for handling a home after a divorce:

  • You could sell the house: This option is one most divorcees opt for since it completely cuts ties between them. Furthermore, selling the marital property, clearing the debt, and dividing the proceeds is frequently the only option if neither partner can afford the mortgage and maintenance costs for the residence.
  • You could buy off the property or vice versa: If you or your partner are in a financial position to buy off the property, then this may be the best choice for you. For such an option, you must tackle a deed transfer and either a loan refinance or loan reassignment.
  • You can opt for a deferred sale: This is the best choice if your and your previous partner’s financial situation is not ideal. Furthermore, it is perfect if you just need time before dividing the property. Couples with kids often choose this option. The designated parent remains in the house with the kids until they finish school. After such a period, the property is usually sold, and the profits are divided.
  • You can co-own the house for an unspecified amount of time: This option is quite similar to the previous one and revolves around sharing a property with someone. Additionally, we will mainly discuss this while going over some crucial points.
An image shows a man and woman looking through various divorce documents while a lawyer in a suit sits directly in front of them.

Sometimes it is best to ask your divorce lawyer about the various options available.

Understand the pros and cons of co-owning the house after a divorce

Just like you would think about the different pros and cons of sharing any other item, such as a storage unit, it is best to research and consider both sides. And since co-owning a property after a divorce is no easy task, it has its share fair of pros and cons you should be aware of.

Pros of co-owning the house after a divorce

You and your children may feel a sense of stability

Unfortunately, most divorces create quite turmoil in the lives of everyone involved. When it comes to children, they get affected more based on their age. So, by co-owning, you’ll be able to negate such an effect (at least for the time being).

A possibly larger profit once you sell the house

With the housing market changing almost daily, there is a high chance you’ll earn a more significant profit from selling your home if you wait for a better deal.

Allows for other possible outcomes

Although you are going through a divorce, co-owning, for the time being, will allow for time to deal with the remainder of your separation. You will have more time to decide what you eventually wish to do with the property, giving you enough time to prepare for it.

Cons of co-owning the house after a divorce

You’ll need to deal with legal matters

It is not surprising that co-owning comes with many accounting decisions and legal matters you will need to deal with. You will need to have your conditions in writing and understand what you expect from your partner and vice versa.

You’ll both depend on each other’s mortgage payments

Although your divorce may be final, co-owning a property will still have you tied to your partner (in a financial way). For example, if your partner fails to pay for their part of the mortgage payments, this will negatively affect your credit score.

It can be incredibly taxing to deal with

It is important to note that co-owning the house after a divorce is incredibly taxing to everyone involved. You will need to contact your previous partner and discuss things that pertain to you as co-owners. This stress is sometimes enough dealbreaker for some and why people choose not to co-own a property.

It comes with some damaging risks

Damaging risks involved with co-owning sometimes cannot be avoided. For example, if your partner dies – what happens to the property? Or if your partner goes bankrupt – will this affect you? All of these risks, and more, will need to be considered when choosing to co-own a property.

A man and a woman in an argument.

Discussing things may lead to more issues between you and your previous partner, but it needs to be done in a co-ownership relationship.

Agree on the terms of the agreement before recording them legally

If you wish to co-own a home with your once partner, you must agree on the terms of your mutual agreement. This can sometimes be difficult based on your current relationship and if you are willing to discuss things openly. However, you must include all contingencies and precisely outline everything in the ownership agreement. 

Some of the questions to ask each other:

  • What do you expect from this current agreement?
  • If and when do you wish to sell the property?
  • What essential details related to the possible future listing do you have in mind?
  • Who will live on the property?
  • Will whoever is living on the property pay fees?
  • Who will maintain the property?
  • Will the children reside here?
  • How will we solve disputes?
A man and a woman sitting down with a woman in a suit and signing some papers.

A helpful professional will be able to take down your requests.

Tips to remember when conversing with your previous partner

  • Remain cordial as much as possible
  • Be prepared to compromise when co-owning the house after a divorce
  • Protect your interests by being clear in your wants
  • Always put the lives of your children first
  • Prepare for things going south by making a plan for how you will move out