Paying for the house while it sells

What it costs while it sells

Add up a month. Most of these you already know, but list them anyway, because the total is the number that decides how long the two of you can afford to wait for the right offer before holding out starts costing more than it gains:

• The mortgage payment, and any second mortgage or home equity line.
• Property taxes and homeowner's insurance, if they aren't already in the mortgage payment.
• HOA dues, if there's an HOA.
• Electricity, gas, water, sewer, garbage and internet for showings.
• Yard care, cleaning and small repairs while it's on the market.

Who pays

There's no default answer. You might split everything evenly, have the spouse living there pay, keep paying from a joint account, or settle on something else that fits your incomes and your case. The right arrangement is the one you both sign.

If you can't agree, the court can step in. Under ORS 107.095 it can issue temporary orders while the case is pending covering the use and possession of property and who pays the liens, which includes the mortgage. Ask your attorney whether that's worth requesting in your case.

Keep the payments current

Whatever the two of you agree about who pays, the lender isn't part of that agreement. The loan is a contract with the lender, and a divorce decree doesn't rewrite it. A missed payment is a problem for whoever signed the loan. Don't let one slide.

Set up a check, even a simple one. Each month, whoever pays posts the confirmation in the shared folder. If a payment is going to be late, both of you hear about it before the due date and not after, so there's still time to fix it.

The same goes for the insurance renewal and the property tax statement if they're paid outside the mortgage. Put the due dates on a shared calendar, and add a reminder a week ahead, so a bill neither of you remembered doesn't turn into a late notice that arrives in the middle of a showing week or, worse, the week before closing when the title company is checking every lien.

Write the payment plan down

A payment plan doesn't need to be long. One page, signed by both of you or made part of a stipulated order, can cover it, as long as it answers the questions that tend to come up in month three rather than week one. Keep it plain.

• Which bills each of you pays, by name, and from which account.
• What happens if a bill goes up, like an insurance renewal or a tax statement.
• Who pays for a repair that can't wait, and the dollar limit before you both have to approve it.
• Whether any of these payments are credited back at closing, and how.
• Who tells the other, and how, if a payment will be late.

Track who paid what

Keep one running record in the shared folder: date, bill, amount, who paid, and from which account. Add the receipt or a screenshot of the payment confirmation, and post it within a few days of paying, while it's easy to find.

Add the receipt every time. It's dull. It's also the document that settles the question at closing, when the money is divided and each of you wants to know you were credited fairly.

When an Oregon court divides property in a judgment it considers reasonable costs of sale, taxes and other reasonably expected costs (ORS 107.105). How carrying costs and reimbursements are treated in your case is a question for your attorneys, and they'll want the record you kept.

A shared asset until closing

Until the deed is signed over to a buyer, the house belongs to both of you in whatever way your title and your case say it does. That cuts both ways. Neither of you should borrow against it on your own.

Once the summons and petition are served, ORS 107.093 restrains both spouses from transferring, encumbering, concealing or disposing of property the other has an interest in without written consent or a court order. A new draw on a home equity line could be exactly that kind of encumbrance, so ask your attorney before touching one. The restraint lasts until the judgment, a dismissal or a court order.

When the money runs short

If neither of you can keep up the payments, say so early, to your attorneys and to me. Waiting makes it worse. A problem raised a month before a missed payment leaves room for choices that a problem raised the day after doesn't.

Your attorneys can tell you whether a temporary order makes sense. The lender is the only one who can tell you what it will do about a payment you can't make, so call the number on your statement and ask, and put whatever they say in writing in the shared folder. If the house is worth less than you owe, read when the house is underwater before you list.

Money pressure is also a pricing question. If the carrying costs can only be covered for a few more months, the pricing plan should reflect that, with review dates and reductions that fit the money you actually have. I'll run the numbers for both of you, using the same figures, so the conversation with your attorneys starts from the same page.