A frequent problem in divorce cases is that the parties are unable to agree on what to do with their house after the divorce is over. The Maryland law dislikes keeping unmarried persons as co owners to real property after a divorce. The solution is reached sometimes by agreement, and other times by court order.
As with virtually everything else in a divorce, an agreement is the best way to go. In an agreement resolving issues of the marital home usually one spouse purchases the interest of the other. This is usually accomplished by both spouses taking the appraised value, minus the mortgage and splitting that equity. Some can refinance.
Another solution sale of the property to someone other than spouses. In such an event with a traditional sale, the home is placed on the market, real estate agents charge 6 percent, and the parties sell to a third party keeping whatever profits there are, after the mortgage and other closing costs are paid . As is so often the case on the issues contained in a divorce, there maybe no agreement as to how to dispose of the home. What happens then?
When the parties are unable to agree what to do with the house, the court orders a trustee. The trustee is essentially the new court appointed owner.of the property. He has the powers of an owner. He can make repairs to the property, determine who comes and goes from the property and to sell or dispose of the property anyway he believes would bring the highest and best gross proceeds to the sale. That trustee is also paid a commission.
This brings us back to the beginning and my recommendation that people reach agreements on their homes. Imagine the following scenario: Two divorced parties are lucky enough to have a modest 75k of equity in their 500k home, despite the current economic times.
They are not able to reach an agreement on who has the house or how to sell the house. A trustee is appointed who gets 5% off the top. There goes 25k. The trustee appoints a realtor who gets 6%. There goes 30k. Then there is the appraisal....the closing costs...a small repair...and thats it zero!!
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