Skip to main content

Is there any way to get market value on a house on a partition sale? Can I buy it myself in the partition sale?

Pittsboro, NC |

I divorced without a separation agreement; ex lives in the house and has stopped paying mortgage and refuses to move out. I consulted with attorneys and partition sale is my only option, they say. Also, ex put the mortgage in only my name while I was deployed, using POA. So we are both on the deed but I am the only one on the hook for the mortgage. In googling partition sales, I find that they usually don't sell for much. Do I have any other options? Are there any ways to maximize the sale value so that I don't go in debt on a house I no longer own? Can I buy the house myself, so that I am the only one on the deed, and then rent till it sells, and sell it at market value at my leisure? Thanks!

+ Read More

Attorney answers 1

Posted

Getting divorced without a separation agreement was not a good idea. This all should have been handled in your divorce in equitable distribution or via a marital settlement/separation agreement.

However, what is done is done. I assume that your name is still on the deed and that the property is in NC. Your options are: (1) make an offer to buy out your ex-wife's share of the equity in the home; (2) bring a partition action. If the property cannot be divided in partition then it will be sold. Unless there is some kind of restriction, then anyone can bid at the sale, but if you bid how is this different from buying out your ex-wife? With a partition sale, there is always a chance that you will be outbid. If you buy out your wife for the fair market value of the net equity, you will not have to worry about this. (3) file bankruptcy if you can file a chapter 7. This will discharge your liability on the mortgage. If your ex-wife wants it, she is going to have to pay for it or the bank will foreclose. Of course, the bankruptcy will be on your credit but if the house is worth less than what is owed, this may be a viable option. (4) Stop paying on the mortgage. The bank will foreclose. Again, this will be on your record. This may also be an option if the value of the house is less than what is owed or about equal to it. You will run the risk of the bank coming after you for a deficiency but you could always hold off and see if they do. If not, then you will not have to worry about this and your credit will eventually recover. (5) The smartest and best thing you could do is if your ex-wife is agreeable, you could put the house up for sale. But this would require you and your ex-wife to get the house ready for showing, get her to move out and for you both to agree on the realtor, selling price.

There is no other way to get fair market value that I am aware of. Partition and foreclosure sales are fire-sales and bring in a whole let less than the property is worth. Savvy buyers looking for investments buy cheap and sell high and make money. But regular people do not attend these sales and the sales are not well-advertised.

I am not a real estate lawyer and if you have obtained contrary advice from real estate lawyers who conduct partition sales, then I would defer to their expertise.

Asker

Posted

Thank you. We owe less than the house is worth. Is prefer to avoid bankruptcy. Can you tell me more about buying out the ex's share of the equity? How would that get me out of the mortgage? I actually don't want the house, I just want to be off the mortgage. Thank you for your response.

Asker

Posted

I would actually just prefer the ex to refinance, but his credit is bad and he can't afford it. Again, I just don't want the house - I don't care about any equity. Thanks again

Asker

Posted

I would actually just prefer the ex to refinance, but his credit is bad and he can't afford it. Again, I just don't want the house - I don't care about any equity. Thanks again

Asker

Posted

I would actually just prefer the ex to refinance, but his credit is bad and he can't afford it. Again, I just don't want the house - I don't care about any equity. Thanks again

Rachel Lea Hunter

Rachel Lea Hunter

Posted

Buying out the share of the ex-spouse gives you total control of the home but it would not get your name off of the mortgage. Once you have control, you can make sure the home is rented/sold. Once sold to someone else then you get released from the mortgage. The ex-husband obviously is not going to buy you out and refinance - that would have been the optimal case to get you off the mortgage, but we are not dealing with a rational normal person here. Rational normal people don't forge names of others to mortgages. And, he has bad credit to boot. If you have equity, then the only way to save it is to buy out the share of your ex-spouse and and to keep paying the mortgage to protect your credit. There are no very good options here and there are no magic solutions.

Asker

Posted

Rachel, Can the court force me to accept an offer of less than I owe on the house? Thanks, Agata

Rachel Lea Hunter

Rachel Lea Hunter

Posted

How can that happen? Usually a minimum bid is at a sale - you have to start somewhere. There may be an exception if its a foreclosure sale but even there, a minimum bid is set. The minimum bid in either case can be less than what you owe.

Asker

Posted

Rachel, Thanks, I think I am misunderstanding something. If, say, the final bid is less than I owe the bank, can the court force me to accept that bid? Thanks, Agata

Rachel Lea Hunter

Rachel Lea Hunter

Posted

Now I am confused - why is there a bid at all? Is the property in foreclosure or not? If the property is in foreclosure, then the sale will be final. unless there is an upset bid. The court is not involved at all typically as NC is a non-judicial foreclosure state. If the property brings in less than what you owe at a foreclosure sale then the lender can seek what is called a deficiency judgment if they have a mind to do that. I assumed that you were going to get the mortgage caught up and buy out the share of the ex-husband and/or proceed with partition. If there is a partition sale the property will either be sold subject to the mortgage (nobody is going to bid on it if that is the case) or else the property will at least bring in enough to satisfy the mortgage, although you said that is it worth more than what is owed. The only other way I could see is that if the property is sold for less to induce the mortgage lender to release the lien, the lender may want to enter into a separate agreement with you to pay back the difference between what is owed and what the property is worth. I don't understand about you being "forced" to accept a bid. I don't see that you have a whole lot of choice here. You either pay up the mortgage or something happens (foreclosure or partition sale). If you are rejecting the selling price then what alternative are you proposing? Why proceed with the partition? I think you need to decide what you wish to do and see a real estate attorney who does partition actions. Your only other atlernative, as I said, was to get the mortgage paid up and buy out the equity in the home and get your ex-husband out of there so you can rent or sell the property. Doing nothing is not an option unless you don't care if the bank forecloses. You are looking for a magic bullet here and I just don't see one.

Asker

Posted

Thanks for your response. The property is not in foreclosure and the mortgage payment is current. I spoke to a real estate attorney who advised that partition sales are like fire sales and I could walk away still owing a lot of money. You seem to be saying something different. So if I pursue a partition sale, can I be assured that I can at least get my mortgage paid off? Thanks again, Agata

Rachel Lea Hunter

Rachel Lea Hunter

Posted

I think its very unfair to the lawyers here and to the real estate lawyer to whom you spoke to have me or anyone else here second guess the real estate attorney. The real estate attorney is presumably familiar with the situation and reviewed the documents. If its the attorney's opinion that a sale will not bring in very much then so be it and I would defer to his/her opinion.

Asker

Posted

He said partition sales don't bring in much in general. When I asked him if I could be forced to accept a bid that's lower than I owe, he did not answer. I have asked other lawyers too with no response. How can I find out an answer?