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5 Tips: the House in Divorce Mediation

If you own a real estate or a house and are going through divorce mediation, then what to do with the property is likely one of your main concerns. As a divorce mediator in Illinois, and an attorney, I know that making major decisions at a time of critical life change can be difficult.

But that’s why I wrote this article about tips of handling the house in divorce mediation. Because I’m a divorce mediator who is also a practicing attorney, my insight into properly handling a house will likely be far more effective than information from a non-attorney mediator who has never represented a client in court. I mediate divorces in the Illinois counties of Cook, DuPage, Kane, Kendall, Lake, McHenry, and Will.

Tip 1: Determine what you really want

Many times ins a divorce, people are concerned with maximizing their “gain.” However, that can create  a sort of tunnel vision. Often, the house one of the biggest assets in a marriage, so it’s natural for people to focus on it. But focusing on keeping something that won’t really improve your life can be a tempting, but troublesome trap.

So it makes sense to think about what you really want before you go into divorce mediation in Illinois. As a divorce mediator, I know that mediation is much more affordable and faster when people clearly understand what they want, but are flexible enough to make changes.

Long story short, think about whether or not you really want the house – before you start fighting for it.

Tip 2: Conduct a cost-accounting

Do you know that many of the people on game shows like Wheel of Fortune are forced to sell their prizes because they can’t afford to pay the income tax associated with them?

What does Wheel of Fortune have to do with a divorce, you might ask? Well, it’s about not getting stuck with hidden or unexpected costs.

One of the benefits of marriage is that you have two people both chipping in (ideally). Responsibilities are usually apportioned or assigned in some manner that makes sense – or at least is workable. Therefore, it is sometimes the case that one or both parties lacks an understanding of the total costs of owning the house.

For example, some of the costs include:

  • Mortgage
  • Property tax
  • Insurance
  • Utilities
  • Regular maintenance
  • Repairs

And for condos, often include:

  • Homeowner’s association fees
  • Special assessments

So that means you really need to consider all of the costs of owning real estate before you get stuck with it.

Just remember this definition of cost accounting  in a business context: “the recording of all the costs incurred in a business in a way that can be used to improve its management.” Treat your divorce like a business decision and the mediation will be quicker and more affordable.

Tip 3: Understand the options

The options for what to do with real estate are not always clear cut. So it makes sense to keep a firm grip on what the options might be so that you can discuss them in a divorce mediation in Illinois.

Here are some of the options:

  1. Sell the house in conventional sale: The house can be sold before the divorce is finalized, and while both spouses still live in it. After that, dealing with the house is just about what to do with the possible gains.
  2. Sell the house in a short sale: A short sale is when a house is sold for less than the outstanding balance on the mortgage. When that’s the case, the house is referred to as “under water.” The lender has to approve a short sale. But a short sale can be a good way to get out of a property that you previously thought you were stuck in.
  3. Strategic foreclosure: Some people choose to let their house go into foreclosure. The foreclosure process can take a year or more, and during that time, people will live their without paying the mortgage. Obviously, this option can screw up your credit.
  4. One person gets the house: Both of you can agree in mediation that one person gets the house. In that case, it is a good idea to cover details such as when the other has to move out, who is responsible for all the bills, and so forth. Also, if the house has equity, then you need to determine how the person who will get the house will buy out the other’share.

Tip 4: Consult a lawyer

Divorce is a legal process. I’m personally very bothered by some non-attorney mediators who purport to replace attorneys. Some even tell people in a divorce the a mediator replaces an attorney.

But that’s terrible. You should consult a lawyer about a mediation in general, and any agreement that comes out of it. But particularly in the case of real estate, a lawyer should review your mediated agreement because you’ll want to avoid unintended consequences.

Tip 5: Understand what mediation is

Divorce mediation is when a third-party neutral (a mediator) facilitates spouses in reaching an agreement in a divorce. However, as a divorce mediator in Illinois, I always want me clients to know this: no mediated agreement is enforceable until it is made a part of a judgment for dissolution (the “divorce decree”). In other words, just because there is a so-called “mediation agreement” doesn’t mean the terms in that agreement will come to fruition.