As it entails the division of two lives and the joint planning of both parties’ futures, divorce can be a difficult and emotional moment. One of the many decisions that need to be made during a divorce is selling the family home.
This process can be complex and add to the stress of an already difficult situation. However, understanding the key aspects of selling a house during a divorce simplifies the process and makes it more manageable for all parties involved.
This blog aims to provide guidance and insights into selling a house during a divorce, helping alleviate some of the stress and challenges of this life-altering event.
Who Gets The House In A Divorce?
Every divorce situation is different, making determining who will keep the house difficult. Depending on the divorced couple’s cooperative or contentious temperament, each scenario could unfold differently.
That being said, while discussing a house’s future, a few options exist. The majority of divorces involving property conflicts go in one of three ways:
- Keeping the house, one spouse buys away the other’s legal interest.
- For a predetermined amount of time, usually until the youngest kid turns 18, one spouse is allowed to use and occupy the house; after that, it may be sold.
- Any equity in the house is divided between the spouses when it is sold shortly.
1. Divide Large Assets
Marital assets are jointly owned by both spouses in states where community property is applicable, regardless of who paid for them. This makes property division during a divorce difficult. You can split everything equally between you and your spouse if you both have substantial joint assets, such as a second property, so that you each have assets that are about equal in value.
If you divide up major assets, you won’t have to wait for a property sale or put up with a protracted dispute about who gets a larger portion of a home, speeding up the divorce process. Selling a property after a divorce won’t be difficult; all you’ll have to do is negotiate over the price of each important item to get an acceptable settlement.
2. Buy Out The Other Party
For as little as half of the house’s market value, you and your partner can buy out the other if you decide against selling. Depending on the income of each individual involved, their financial contributions to the property, and the home’s earning potential, the buyout may be for more or less than half of the property’s market value.
If you plan to perform a buyout, remember that you will need to have enough money unaffected by the other terms of the divorce and be able to afford the mortgage with only one source of income.
How To Sell A Home During A Divorce
Before listing, talk about other important issues besides financial investments. Will one partner occupy the house while it’s on the market? Will you share these expenses, or will they cover the mortgage and other bills? If either of you is available, who will show the house and who will prepare it for open houses?
1. Maintenance
As with anything else related to real estate, before putting your house up for sale, think about what maintenance it might need and get its official value assessed by a real estate appraiser.
- When it comes to selling a house, first impressions count, so improving curb appeal is a calculated part of upkeep that may greatly influence how prospects view the house. This may involve tasks such as landscaping, exterior painting, repairing or replacing siding, and ensuring a well-maintained entryway.
- Prospective buyers are also likely to scrutinize the functionality of key systems and appliances within the home. Regular maintenance ensures that HVAC, electrical, and plumbing systems work well to avoid last-minute glitches during sales.
- The interior spaces of a home should be well-maintained and visually appealing, including tasks such as repainting, repairing or replacing flooring, and attending to any visible wear and tear. Home staging, a form of strategic interior maintenance, can further elevate the property’s presentation by highlighting its features and creating a warm, inviting atmosphere.
If you and your partner decide to invest in repairs or upgrades, you need to decide how to divide the costs and whether or not the expenditure will affect the profit-sharing arrangement.
2. List The Home
When you sell your house, work with your partner to choose a qualified real estate agent who will sell your home at the best price. The agent will also work toward a shared objective and act as a decent mediator in a dispute.
Determining the best time to list a home depends on several factors, including local market dynamics, interest rates, and economic conditions. A property that is listed strategically takes advantage of positive trends and maximizes exposure by timing its debut with the state of the market.
- Pricing is a strategic lever directly impacting a property’s market appeal since an accurate and competitive listing price attracts the right audience. Overpricing can deter potential buyers, while underpricing may lead to missed opportunities for maximizing returns.
- First impressions often form through visual presentation, making professional photography and staging integral to strategic listing. High-quality, well-lit photographs showcase a property’s best features, capturing the attention of online viewers.
- Open houses and private showings provide an interactive platform for buyers to visualize themselves living in the space. Strategic scheduling of these events and engaging marketing materials fosters a sense of urgency and exclusivity, potentially accelerating the sales process.
3. Accept An Offer
Given that it depends on an appraisal and the advice of your real estate agent, you might not get the price you have listed for. Evaluating an offer involves more than just looking at the figures since you also need to consider the terms and circumstances being offered, including any particular requests or contingencies.
For a sale to be effective in a competitive market, you must know the buyer’s dependability. As the offers start, stay in constant contact with your spouse, the real estate agent, and your divorce attorney.
- A well-rounded offer takes into account your intended timeline, possible challenges, and financial expectations. Assess the offer in its entirety to make sure you fully understand the buyer’s intentions and capacity to move forward.
- A seamless and prompt closure is more likely when the buyer’s qualifications—such as their sound financial standing and mortgage pre-approval—are considered. Consider the buyer’s commitment and their level of preparedness to move forward with the purchase.
- Review any conditions included in the offer, like as financing, inspections, or appraisals, and determine whether you can fulfill them in the time allotted. For the closing process to go smoothly and effectively, contingencies must be fulfilled on time.
When to Sell the Home
Divorcing couples are legally required to divide all marital property, including debts and financial assets, in places where community property exists. If you purchased a home while married, any equity is divided evenly, and one partner must either buy out the other or sell the home.
A few types of property, like those acquired prior to marriage or those inherited by one spouse either before or during the marriage, are occasionally regarded as individual property. Prenuptial agreements, which outline how assets and debts would be split in the case of a divorce, can take precedence over community property laws if they are enforceable.
Conversely, most states follow the equitable distribution model, which means that unless both parties split the assets, the court views an individual’s assets as personal property.
1. Selling Before
Selling the house ahead of time might provide financial advantages regarding liquid assets and reduced tax obligations for many people. The money from the sale of the house and the distribution of the proceeds might be available to each person to pay off debt and purchase a new residence.
2. Selling During
People going through a divorce may end up heavily indebted due to splitting costs and legal fees because it’s costly. Selling the house during a divorce but before it is finalized protects both parties because it can contribute to the costs of a protracted legal process, particularly in cases where a fair settlement has required extensive discussion.
3. Selling After
Many couples may decide to hold off on selling the house until a more convenient time, especially if they have children living at home. Some couples choose to continue paying their mortgages jointly, sometimes in order to fulfill their alimony or child support responsibilities.
Legal Aspects of Selling the House
Selling a house after a divorce is similar to selling at any other time, but before the sale, you should be certain who will receive what. You should be able to receive fair market value from a sale as long as you’re not desperate to move out of your house.
You can find that value with the assistance of real estate brokers and home appraisers; at this point, the couple (via their respective attorneys) should precisely agree on the division of the proceeds from the sale. When selling a home during a divorce, several legal considerations must be made to ensure a seamless approach.
The following are the main legal considerations:
1. Stipulation Agreement
A court-ordered stipulation is the most straightforward approach to selling a house during a divorce. A stipulation is a formal, documented agreement between you and your spouse that specifies crucial information regarding the house’s sale, like:
- Choosing the real estate agent
- How to determine the home’s price
- How to lower the cost if needed
- Who will be corresponding with the real estate expert
- If both spouses must properly approve offers and acceptances
- Which spouse is in charge of making sure the house is presentable
- Whose share of the sold house will cover any liens or other obligations
Consult a mediator or lawyer for assistance in drafting a stipulation. Not every couple will be able to agree on a stipulation for selling the house, but a stipulation benefits both parties and avoids future litigation.
Your next action is to request an order from the court to sell the residence if a stipulation is impossible for your circumstances. If you have a valid reason, you can take care of this before your divorce trial rather than wait until the end.
The courts typically accept arguments like the possibility of foreclosure or the requirement to use the money to pay for bills and other legal costs.
2. Divorce Agreement and Property Division
In some states, anything purchased or otherwise gained during a marriage is considered to belong equally to both spouses, regardless of the name on the deed. Your attorneys should handle dividing the proceeds from a sale because they are familiar with the state laws and the limited exceptions to them.
- One spouse might get a bigger share of the sale if they made greater financial contributions to the mortgage or house maintenance during the marriage.
- Greater profit may go to the other spouse if one spouse makes larger contributions to the house but retains other substantial assets.
Occasionally, these arguments end up in court, where a judge allocates the revenue. Since most individuals leave divorce court unhappy, coming to a mutually acceptable decision through your attorneys is preferable.
The 9 Benefits of Selling Your House As-Is
Selling a home during a divorce is similar to selling a home any other time, but there should be an agreement on who gets what throughout the process. Selling a home amidst a divorce can be a stressful and time-consuming process and sometimes you might not have the time and money for maintenance and market up-time.With thoughtful planning and preparation, you can optimize your home’s asking price to ensure that it sells quickly – while still obtaining a great return on the investment. If you’re ever looking to sell your property fast and at a great price, read on to get the benefits of selling your house as-is!