Equity in Home? How to split?

[BetrayedMNWife]

What is the name of your state? MN

My husband and I are divorcing due to his infidelity. My question has to do with the equity on the house. We purchased the house from his grandmother for less than half of what it was worth at the time. Since then, we took out a 2nd mortgage to perform home improvements. We then refinanced and rolled both of those loans into one loan, in addition, rolled an auto loan $12000 (his vehicle) and a 4 wheeler loan $5000 (his vehicle) into the home loan and ate up some of the equity. In the divorce, he is going to get both the 4 wheeler and the vehicle as well as the house. We will have roughly $16000 in equity left in the house. Am I wrong for requesting the entire equity amount left in the house?

BetrayedMNWife

 

[bulldogg70]

I think it is worth a shot.

 

[LdiJ]

I think it is worth a shot.

I agree. In addition potential selling costs are normally taken into consideration when determining equity. So that would make the equity even lower.

 

[BelizeBreeze]

And while asking for the moon is also worth a shot, this will not fly.

All three assets, if assumed there is no depreciation value, are judged the same. However, the auto and four-wheeler DO have depreciated value from the time of purchase and the house does not.

So, the equitable solution would be, not assuming depreciated value, would be 1/2 value of the four-wheeler ($2,500) and the auto ($6,000) deducted from 1/2 the equity of the home ($8,000) which would be a wash.

However, since the two assets are depreciated in value, the most you would be able to recover would be 1/2 of the depreciated value of the vehicles subtracted from the equity of the home then split in 1/2.

 

[nextwife]

I wonder if it it may be possible for him to make the claim that his grandma "gave him" the half that he didn't buy and that she was not paid for. That would make half the house (at that time) a gift to him.

 

[LdiJ]

And while asking for the moon is also worth a shot, this will not fly.

All three assets, if assumed there is no depreciation value, are judged the same. However, the auto and four-wheeler DO have depreciated value from the time of purchase and the house does not.

So, the equitable solution would be, not assuming depreciated value, would be 1/2 value of the four-wheeler ($2,500) and the auto ($6,000) deducted from 1/2 the equity of the home ($8,000) which would be a wash.

However, since the two assets are depreciated in value, the most you would be able to recover would be 1/2 of the depreciated value of the vehicles subtracted from the equity of the home then split in 1/2.

I agree with your assessment, however you are neglecting to take potential selling costs into consideration in determining the equity in the home. Those would most likely be at least as much as the depreciation in the car and 4 wheeler. Therefore I think there is a reasonable shot at it flying.

 

[BelizeBreeze]

I agree with your assessment, however you are neglecting to take potential selling costs into consideration in determining the equity in the home. Those would most likely be at least as much as the depreciation in the car and 4 wheeler. Therefore I think there is a reasonable shot at it flying.

Except that 'potential selling costs' do not enter the picture. That is an option for whomever gets the house, not ordered by the court. Clearly this is a swap for equity, NOT a forced sale.

Therefore, the court cannot allow 'POTENTIAL' costs for something that it does not itself order.

 

[LdiJ]

Except that 'potential selling costs' do not enter the picture. That is an option for whomever gets the house, not ordered by the court. Clearly this is a swap for equity, NOT a forced sale.

Therefore, the court cannot allow 'POTENTIAL' costs for something that it does not itself order.

Every property settlement I have seen has taken potential selling costs into consideration when determining equity when one of the parties was keeping the house. In other words, the party not keeping the house gets what they would have recieved had the house been sold and the equity split.

Perhaps it doesn't work that way in some states...however if so, its not a fair division of assets. It basically assesses a higher cost to the party keeping the home.

 

[BelizeBreeze]

Every property settlement I have seen has taken potential selling costs into consideration when determining equity when one of the parties was keeping the house. In other words, the party not keeping the house gets what they would have recieved had the house been sold and the equity split.

Perhaps it doesn't work that way in some states...however if so, its not a fair division of assets. It basically assesses a higher cost to the party keeping the home.

And an intelligent attorney would either require the property settlement to conclude without such or force the sale of the home if those charges were included in the computation.

Simply put, if she wants the home she takes it under present conditions. If she wants the monetary equity (sale proceeds) then she can include the costs but also be forced to sell the house and only 1/2 of the sales costs taxed to the other party.

And don't forget, if a sale is prescribed, the equity at the point of the sale is the figure used to compute equity, NOT the proceeds of equity at the point of the agreement.

What happens if it takes two years to sell? Want to enter that arena?

 

[LdiJ]

And an intelligent attorney would either require the property settlement to conclude without such or force the sale of the home if those charges were included in the computation.

Simply put, if she wants the home she takes it under present conditions. If she wants the monetary equity (sale proceeds) then she can include the costs but also be forced to sell the house and only 1/2 of the sales costs taxed to the other party.

And don't forget, if a sale is prescribed, the equity at the point of the sale is the figure used to compute equity, NOT the proceeds of equity at the point of the agreement.

What happens if it takes two years to sell? Want to enter that arena?

I am not going to get in a big debate over this. My personal opinion, based on the numbers, is that there is a chance that the equity can be left untouched. Enough of a chance that its worth trying. It may not happen, but its at least worth trying.

 

[sx400]

What happens if it takes two years to sell? Want to enter that arena?

Yes lets,..... I have that exact situation, seperated two years ago, we are currently going to court for dispersment of martial equities. She is attempting to buy me out. although she has paid the motgage for the past year, am I entitled to the fair market value NOW, or the value of the home when we seperated/filed.

 

[Susie39]

Home equity

I don't know if this will help but here goes anyway. If he has all of the major assets listed under his name, you will get more out of the home equity. There needs to be a balance of assets for all concerned. I would agree with you, but don't know if the law would. Best of Luck!!