The Latest News July 2014

What You Need to Know when Buying or Selling Real Estate as a Married Couple

Posted On: July 31, 2014

Buying and selling real estate is one of the most common things people do as married couples. Families change over the years and as they expand and contract, couples move from one house to the next. They might buy or sell property together as a financial investment or even purchase a second home with plans for the future. In order for buying and selling real estate to go smoothly for married couples, there are a few things they should know:

Financial Pre-Approval is Important
If you are buying real estate, receiving pre-approval for a mortgage is essential. Even if the exact amount you end up borrowing is different than your pre-approval amount, having the “go-ahead” from a mortgage company speeds up the process once you are ready to buy. It also shows sellers you are serious about buying and will be able to make a solid offer if you are interested in their home.

Credit Matters
As part of a married couple, there are several things you should know about credit scores that are different from when you were single. Even after you are married, you will still have an individual credit score. However, both will be taken into account when purchasing real estate.

A couple with two good credit scores is more likely to qualify for a lower interest rate mortgage than a couple with one low score and one high or two low scores. If you have a good credit score and your spouse’s is low, it is possible for you to apply for a mortgage in only your name, but then only your income is taken into account. This means the mortgage amount for which you will be approved is much lower because your spouse’s income is not considered.

Selling Real Estate Requires the Approval of Both Owners
When the time comes to sell real estate that is jointly owned, both owners must approve the sale. For example, if you want to sell your home and your spouse is unwilling to sign a listing contract, you cannot legally make the sale. Typically, this is not a problem for married couples, but it can cause issues when couples are separated or planning to divorce.

Furthermore, tax issues arise when property is sold by a married couple, as opposed to a single. For example, IRS Code section 121 allows homeowners to exempt the first $250,000 of capital gains when selling their primary home, but that amount is doubled to $500,000 when the sellers are married. Tax issues change somewhat frequently and have drastically changed in recent years, so it is important to consult a tax expert if you have recently sold your home.

Buying and selling real estate are important decisions and have a major effect on your financial status. If you and your spouse are thinking about buying or selling property, speak with an attorney or real estate professional before moving forward.

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The Benefits of Mediation and Collaborative Mediation and the Differences between the Two

Posted On: July 18, 2014

Alternative Dispute Resolution (ADR) is quickly becoming one of the most popular methods for resolving legal disputes. Instead of pursuing a lengthy trial that is expensive and can result in an outcome with which nobody is happy, ADR offers more efficient options for settling disputes. One of the more common ADR methods is mediation.

What is Mediation?
Mediation is a way to settle a dispute without litigation. It involves the disputing parties and a neutral third-party mediator. Often, disputes are settled in as little as a single mediation session, which might last only a few hours. Disputing parties have complete control of the resolution and the mediator is there only to ensure the resolution is legal and that the parties use effective communication and remain focused on resolution. Essentially, the mediator facilitates discussion so disputing parties can resolve a problem. If disputing parties believe they will need additional support during the mediating process, they have the option of choosing collaborative mediation. Like basic mediation, this process is efficient and keeps the control in the hands of the disputing parties, but it provides them with the support of a team of experts that offer counsel during the process. Each party can have his or her own legal representation, and other professional experts might also play a role in the process, including those familiar with financial, psychological, or real estate issues.

What are the Benefits of Collaborative Mediation?
In general, mediation is beneficial because it saves time and money. Collaborative mediation offers these benefits, but it is a better solution when cases are complex or when disputing parties are uncomfortable making legal decisions without sufficient resources. Collaborative mediation is solution oriented with the party’s needs and desires dictating a resolution. Although the parties may be represented by attorneys this is not an adversarial process but again a solution oriented process. For instance, if decisions are to be made during mediation about splitting marital property and the mediator is not an expert in real estate law, collaborative mediation allows an attorney or a real estate expert to provide information during the mediation process. Collaborative mediation is especially helpful during divorce proceedings because there are so many sensitive issues at play. Approximately 40% of divorcing couples are parents and just as concerned about the well-being of their children, as they are for their own. As parents you will always be connected in some fashion to the father or mother of your children. Both Mediation and Collaborative mediation help salvage a working relationship between the parties and provide the tools to go forward in the future. Divorce proceedings include a variety of issues and having expert advice from various fields helps make the decision-making process easier. According to Divorce Magazine, the average length of divorce proceedings is one year. Mediation can shorten this transition period, making it possible for families to move forward and begin their new lives. If you are involved in a legal dispute and you believe traditional litigation will do more harm than good, mediation is an option. Collaborative mediation provides a way to settle a dispute efficiently, but without the uncertainty you might feel using basic mediation.

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