Divorce and the Alberta Housing Market
You can scarcely open social media lately without seeing posts and articles about the Alberta housing market. The hot real estate market can add even more stress to an already stressful process for divorcing couples.
If you and your soon-to-be-ex want to sell your matrimonial home, rising home prices may seem good because your home will undoubtedly be worth more than last year or before the pandemic.
The problem is both partners still need a place to live. If you intend to apply for a mortgage alone, you may find you don’t qualify for a mortgage that will allow you to buy something on par with the home you once shared with your ex.
All divorces have a financial impact. When the cost of housing dramatically shifts, it causes even more disruption to the process.
In the Globe and Mail this week, a financial planner is quoted as saying they see more couples staying together for financial reasons or trying to live in one home despite separating.
Here’s what we recommend instead.
Consider whether it’s in the best interests for your family to sell or stay. The question can be especially difficult for divorcing couples with kids. Keeping the children’s home is a common strategy in ensuring they are disrupted as little as possible by their parents’ divorce.
With home values rising, it may not be financially possible for one parent to buy the other parent out and keep the home. The other co-parent often wishes to live nearby to make co-parenting more seamless. As home prices rise, so too do rental prices. It may be difficult for some to find a nearby rental within their new budget as a single adult.
If you and your soon-to-be-ex can’t come to terms on this issue, consider mediation.
Answering questions like when to list your home, who will move out and when, and how you will divide the proceeds are always tricky but especially when the Alberta housing market is riding high.
With that in mind, here are a few tips.
- While a formal separation agreement isn’t mandatory, we recommend (and provide) a notice of consent signed by both parties before you list your property.
- If only one name is on a title in Alberta, the spouse has to sign additional documentation agreeing to sell the property. Your realtor can walk you through this process.
- Strongly consider having both parties move out of the house and have it professionally staged. Not only does it show better in general, and it will remove any questions potential buyers may have if it feels like the house is half-full of furniture.
- If you’re too busy or too exhausted from the strain of divorce, make sure you hire out tasks like paint touch-ups, carpet steaming or lawn clean-up that are needed before listing your house for it to show its best. Keep the receipts and split the costs. If one party doesn’t want to pay upfront, you can use it to negotiate how the sale proceeds are divided once the money comes in.
Don’t use the hot housing market as an excuse to overprice your home. Every dollar counts when you are splitting assets, but it doesn’t help anyone move forward when the house is overpriced, and one party refuses to accept a price reduction. Many months on the market can make for added time and stress in the divorce process.
Divorce doesn’t mean being saddled with a home you can’t afford or no longer want to stay in. By following these tips, you can move forward smoothly and constructively.
If you are considering divorce but aren’t sure, or aren’t sure how to proceed, try our Zero-Risk Divorce Assessment and get clarity in 90 minutes.
Are you stuck in a divorce rut? You want child support, some money from the house, or simply a final divorce, but none of those seem to be attainable any time soon? Right now, if you are successful at booking a child support hearing through the Court of King’s Bench, you can expect a Judge to look at your case ONE YEAR from now. Can you imagine what it is like for a single parent, with limited income, and limitless legal fees trying to make ends meet in this Alberta economy? Hurts my heart.