Tips for Buying Your First Home After Divorce
Needing some tips on buying your first home after divorce? You have come to the right place. After divorce, one of the first things you often feel the need to do is find a new home – assuming you were not awarded the marital residence in the settlement agreement. Sometimes, depending on your income bracket, you may be looking for a new time share or vacation home in addition to just a new post-split domestic domicile. Often times (but not always) you will be downsizing since not only the family unit is smaller but so too is the wallet size given that once there were two and now there is only one. So these can be very stressful undertakings and considerations. Here are some tips for maneuvering the situation without completely becoming undone in the process.
1. The first thing is to consider sitting down with a divorce financial planner (if you are not already a financial whiz) to discuss your post-split financial goals and objectives – including purchasing real estate. See what is really feasible and what is not. Just because you just received a lump sum settlement does not mean you can afford a house just yet; or even that it is a timely move. Buying real estate is all about timing – and of course, money. So talk to a financial advisor before you do anything.
2. Do the preliminary stuff such as: make sure the old marital residence has been refinanced to reflect the new ownership scheme; obtain information about your credit score and rating so that you can know your credit-worthiness post divorce (if applicable); decide how much down-payment you will be able to pay (if you cannot pay in full); and figure out the maximum amount of house you need and can afford. (Remember that you don’t have to have the biggest house on the block to feel happy and sometimes the upkeep of the biggest house on the block is not worth it financially especially now that you have one income, not two.)
3. Consider the timing. Just because you are ready to buy a new house right this minute does not mean it is the most opportune time. Yes of course you want to prove you have moved on from your ex. But hold up. Consider and study the market before you pull out the wallet. Sometimes it is better to rent first.
4. Consider renting before you buy. For both habitual residences and holiday property, you may want to consider renting before you buy.
5. Consult a real estate agent. Right after divorce, you are probably going to be the least capable of taking on a house-hunting project solo. You may not be thinking as clearly as you need to; you may not see all the issues. That is why it is important to enlist professionals who can help you. They can discuss your goals and objectives and really create a cache of places that is exactly right for you, based on your discussion and your needs. But do not allow your agent to pressure you into making purchasing decisions. Real estate agents are all about making their commissions and sometimes the fact that you are newly divorced and vulnerable can be a negative – for you. So while it is important to have a supporting cast of helpers as you transition to your new life, it is important to stay in charge of the situation and only do what you believe is best for you in the end – this is true for both domestic and international purchases as well as for holiday properties and habitual residences as well.
6. Location, location, location. This is a very important concept to keep in mind – no matter how hackneyed you think it is. When you are freshly divorced, obviously, you are going to be single for a minute or so so you need a nice pad that is not so far away from everything and everyone that you can meet and mingle with other singles. Thus, the location of your new purchase has to be factored into things. You don’t want to be too isolated; at the same time if you have children, you also have to have a place that is child friendly where there are parks and playgrounds and good school districts. If this is a question of holiday property or international property, you still want to be especially cautious – particularly when you are unfamiliar with the area. This will require some balancing of all your competing interests, of course. But you definitely want to pay attention to the location when you buy since, unlike renting, you will be locked into this for some time to come.