A home divided and a house that they can’t get rid of
Leah is ready to move on with her life. When she and her husband divorced this year, they decided to sell their $490,000 home, split the proceeds and go their separate ways. She already had her eye on a condominium for herself and their 7-year-old daughter.
But it’s been eight months since they put the house on the market. They have reduced the price three times, most recently in July, to $449,000. Only three people have looked at the house since then.
Her ex-husband agreed to move out, but, without money from the sale, he can afford only a sparsely furnished house barely big enough for regular visits from their daughter. For a while, he had no refrigerator.
Their daughter’s situation has become “this big worry for me,” said Leah, who spoke on condition that her real name not be used. “And then she calls me when she’s with him and wants to come home because she’s not comfortable. It’s really a mess.
“We thought we would be sold and parted ways and moved on by now,” she said. “We do have an agreement that we will split the equity 50-50, but, as time goes on, we just watch that equity go down the tubes. He can’t move on, and I can’t move on.”
A slump in real estate sales never has a salutary effect on a would-be seller, but in the case of divorcing couples, it makes a difficult situation worse. When a house doesn’t sell or sells at a discount, couples may not have the wherewithal to purchase a new homes or buy out the ex.
The result can be situations like Leah’s: One person is stuck in a house he or she wants to leave. Or both must continue to live together because neither can afford to move before a sale. Or, as in one case, the wife moved out, taking the children and expecting the house to sell quickly -- but her husband’s girlfriend moved in, apparently to stay until the house sells.
Donna Ferber, a psychotherapist who runs support groups for women in the midst of divorce, is finding more real estate woes creeping into discussions.
“Money is always a topic during a divorce,” Ferber said. “But most women are under the impression that once the legal divorce is over, they can begin to budget and go on with their lives. But because of the downward turn in the market, the financial difficulties have been exacerbated. Not only does this create financial difficulties post-divorce, but it also makes it difficult for the man and woman to move on.
“The couple stays interconnected and dependent on each other more than they thought they would,” she said. “It really impedes the healing process.”
Several Connecticut divorce lawyers and real estate agents said that although the market seemed dismal, the decline in sales was not nearly as bad as it was from the late 1980s through the early ‘90s.
Christine M. Whitehead, a Hartford lawyer, said she saw a house worth $380,000 in 1988 on the market for $170,000 in 1994. In some cases, the woman might have agreed to pay her ex-husband a flat amount for his equity -- say, $100,000 -- on a certain date, perhaps when their children are off to college and she is ready to sell the house. In the late ‘80s that payment was fair, but by the early ‘90s, when the payment came due, it was double the current value of her ex-husband’s share, Whitehead said.
Ken Rubin, a New Haven divorce lawyer, said that agreeing to have a woman pay her ex-husband a set amount for his equity after so many years “was a mistake made by lawyers back then.”
“Those of us who practiced through that period learned never to base the settlement totally on the value of the real estate,” he said. “Instead of the husband getting the pension and the wife getting the house, maybe each get half of each.”
Recently, several of Ferber’s clients, including Leah, agreed to talk about their real estate troubles on the condition that their real names not be used.
Lauren has a divorce settlement in which her one asset is the house. She and her former husband put the house on the market in early March, but the only offer was so low that she decided to take it off the market. “It wouldn’t be wise for me to take a loss on it right now because it’s my one asset,” she said. “I’m better off holding onto the house.”
As she continues to live there, Lauren said, she will probably have to get a second job to help pay her bills until the market improves.
Catherine has a situation that is financially and emotionally draining. When her marriage began to fall apart, she and their two children moved out of their West Hartford home and into her parents’ home. The couple put the house on the market in March and watched its value decline from the $443,000 they paid to about $399,000.
To her chagrin, her husband’s girlfriend moved into the house. Catherine said she couldn’t stand dropping her children off to spend time “in my house” with his girlfriend there.
What’s more, according to the court settlement, Catherine is supposed to start paying half the mortgage, but she is planning to go back to court to argue that she should not have to pay when his unemployed girlfriend is living there.
“I hate the house,” Catherine said. “I’m so angry about the house, I would pay somebody at this point to take it.”
Barbara Aaron, a Hartford divorce lawyer, said that when economic times were good, it was generally easier to settle cases: “It’s much easier to live separately, to be financially sound. When the economy takes a downturn, whether in real estate or on the stock market, it’s much harder to survive with a comparable standard of living.”
Leah said she sometimes found herself lying awake at night, anxiously thinking about the house. Last spring, when she was sure she would be moving within a month or two, she packed most of her belongings, including winter coats and other cold-weather gear, into bins in the cellar. Now she is beginning to think she should unpack.
