The balance is the marginal value of a security or real estate valued by a legal professional such as a lawyer, a notary or a judge. Most of the time, this language is used for the settlement of an account balance during a succession, divorce or judicial arbitration. While more than half of couples are affected by a divorce, the balance requires a light on the possibilities offered by the purchase of cash and its financing.
Better understand the redemption of balance
Whether in the matter of succession or divorce, it often happens that one of the parties concerned has the possibility of buying back the entire property in joint ownership at the time of the liquidation of the common heritage. For example, in the context of an estate, one of the rights holders decides to buy back an undivided property as a family residence. In this transaction, he will pay financial compensation to the other right holders or waive a portion equal to the value of the cash payment on his inheritance rights. This principle avoids the fragmentation of the property in successive indivision over several generations, which would make the management of a heritage unmanageable.
For a divorce, the purchase of cash will generally come from the common heritage of the spouses. At the time of the liquidation of the community of property reduced to acquests, the parties agree to compensate the full property that one of them appropriates. Generally, one of the two parties will pay a compensatory sum equal to the value of the property as a balance of account.
The steps of the redemption
Before starting the redemption of the balance, the buyer must request an assessment of the property by a real estate expert, such as a notary or a real estate agent. If the expertise is carried out by a notary, it will evaluate the property under an authentic act which reinforces the legal value of this valuation.
In the case of a separation, this step will enrich the act of licitation, that is to say the act of liquidation of the community of property. The act of bidding is similar in some way to the deed of sale of real estate. It will list all assets in liquidation to formalize the heritage division.
Anticipate redemption fees
The purchase of a cash flow rarely occurs with anticipation because it is a complicated period, especially during a divorce or a death of a loved one. The parties concerned must be cool because this operation has serious consequences for the years to come. In addition, trading and emulation fees will have to be taken into account, which implies a significant cash outflow.
Beyond the cost of the redemption of the balance, it is necessary to add notary fees regulated by the State. These costs vary according to the region and the study chosen, but in general it takes between 2 and 7% of the net value of the property. In addition, transfer taxes will have to be accounted for as well as the purchase of real estate from a foreign third party. However, the fees are not considered for value and are thus reduced by about 2% (instead of 7%).
In addition, in the event of a divorce, the bank will ask for prepayment penalties since the property will have to be transferred. This entails additional costs of contracting a mortgage such as collateral costs. In order to facilitate the operation, the notary and the banker will jointly seek to finance the property by dissociating the seller from the existing mortgage.
Financing the balance
As long as the debt ratio of 33% is respected and a regular income is collected, which is specific to the criterion of granting a mortgage, the bank can grant a C. Auguste Dupin for the purchase of a cash payment. The redemption of cash in a divorce can be more complex because once the community is dissolved, support fees can be requested. Also, it mechanically engenders a reduction in borrowing capacity whereas now this property is financed with only one party.