fbpx

Blog

How To Sell Your House During A Divorce – Ultimate Guide

Image by engin akyurt via Unsplash

Divorce is a tough time for everyone involved. Dealing with the sale of a home is only part of the equation, as there are a lot of things going on for both parties. Understanding how to sell a piece of real estate during divorce, both the process and the options, will help you make smart decisions that get the whole thing over with faster. Learning how to sell a property during divorce will make it all easier.

Divorcing couples are often hard pressed to be in the same room together, much less to come to an agreement on how to proceed with the sale of their house. Because the home is the largest asset most people own, it can feel like the stakes are even higher than in a traditional home sale.

Decision factors in divorce

couple talking during divorce

Image by Hutomo Abrianto via Unsplash

There are three main drivers of decisions about selling a home during a divorce.

  • Financial reasons
  • Legal reasons
  • Personal reasons

Most people focus on the personal facet of the divorce process, in part because the emotions are so high with the other spouse. Partnering with the other party, someone who you’d promised to love, honor, and cherish as you built a life together, meant sharing everything.

It makes the most sense to look at the process through the lenses of legal reasons and financial reasons. Deciding to sell the house shouldn’t be based on personal reasons. Divorcees need to look at it through the lens of smart decision making.

The family home is emotional

blue green and red plastic clothes pin

Image by Jackson Simmer via Unsplash

The family home is a place of memories and is often the emotional heart of a couple. Letting it go is naturally difficult. Oftentimes, the family house is the most tangible reminder of a couple’s life together.

Community property in the form of the marital home is a tough issue. People’s feelings get involved and that makes it tough to think about the house during a divorce. The marital home is a place where you built a family together, with or without children.

Letting go of the marital home is not all bad, though. It can be a positive emotional step forward to break with the other spouse is an important step in the healing process.

Liability factors

Holding on to a house during a divorce can be tempting, but there are powerful reasons to separate property or consider selling real estate.

There are liability reasons, especially when it comes to tax time and thinking about the financial upkeep of the real estate.  Talk to a tax professional about how to leverage other assets and how to best negotiate sale proceeds when selling a home you used to co own.

Selling may be the best option given all of the financial, legal, and personal factors. Liability reasons could really push that decision making process.

The most valuable asset

saving money during divorce

Image by Fabian Blank via Unsplash

The marital home is likely the most valuable asset the couple has together. It can also have a strong sentimental value.

That sentimentality might lead the couple to decide that one spouse should keep the home, even though the other wants to sell it.  Things can become complicated when both want to keep the home and neither is willing to negotiate.

Deciding how to split the house is tough. If both want to live in the home, they have to work out an agreement that is functional for everyone.  For example, one spouse could stay in the house until the final sale date, while the other moves out.  This way, neither retains custody of the property, but they also aren’t making things more difficult by involving attorneys and the court system.

When two formerly loving people can find a civilized way to have a relationship during this difficult time, it makes it much easier than using a divorce attorney for everything.

Real world divorce scenarios

There are three common scenarios that play out for a divorced couple and splitting the home.

  • One spouse buys out the legal interest of the other, keeping the marital home.
  • The couple agrees to a home sale and divides any equity between the two parties.
  • One spouse continues to occupy the home for a certain agreed upon period, then the house is sold.

All of these scenarios can be part of the divorce trial. A real estate professional can help work out the issues, including other legal interest issues.

What is a “Buyout?”

A buyout is a situation where the divorcing couple decides that one spouse will “buy out” the interest of the other in the home. This way, both spouses get what they want out of the divorce petition.

The mortgage or financial upkeep of the home falls onto the spouse who decides to stay in the home in this scenario. The buying spouse will have to pay fair market value for the home in a divorce selling scenario. Community property interest is easily solved in a buyout.

Real estate appraisers can help determine what the home interest should be sold for. After that, a written and signed agreement between the spouses will seal the deal. Whatever the buying spouse contributed to the home sale price is part of the divorce settlement.

Custodial parents

children of divorced parents

Image by Ben Wicks via Unsplash

In situations where there are children, one general is the custodial parent while the other has visitation. Typically, the custodial parent will buy out the noncustodial parent to keep the children in the family home.

This scenario is ideal if couples have kids and want to provide stability. It also works out well if the market conditions aren’t quite conducive to sell quickly.

Buyouts don’t usually happen all at once. The details will usually be in a settlement agreement or part of the divorce settlement. A buyout does almost always involve refinancing the property under one person’s name. Working with a mortgage lender can help, as can working with a real estate agent.

Refinancing for divorce

In most cases, one spouse will apply to get the home refinanced under their name only.

For example, let’s look at a home that currently has a mortgage loan with a principal balance of $200,000 and an equal amount of equity in the house, $200,000. The buying spouse would need a loan of at least $300,000. This includes one-third, or $100,000, to payout the equity that the other spouse has in the house, as well as $200,000 to pay off the previous loan.

When you sell your house during divorce proceedings, it proceeds like any other home sale.  One spouse signs the deed to transfer ownership of the home to the other spouse. Then an escrow company takes care of most of the paperwork and transfers the funds.

Consider the needs of your children before you sell

When children are involved, things get much more complicated.

It’s important to factor in the children’s needs before making any final conclusions on what to do with the home. The stressful situation of divorce takes a toll on the kids even more than the toll that it takes on the parents. Kids should be included in the process. Parents need to ask their kids about what they want out of the situation.

Often, kids try to leverage their own emotional reasons through the divorce process. It’s still important to listen to what they have to say about selling the home. Divorce affects the future value of the home, but it also affects the kids.

Get on the same page

It’s essential to get everyone in sync regarding the home’s sale, if at all possible. Get a written agreement between the two parties. It should lay out a plan about how the profits from the sale will be split.

Couples who are unfamiliar or uncomfortable doing this alone should work with an attorney to negotiate the house during a divorce. The attorney client relationship is privileged, so they won’t have a stake in what happens to the house during a divorce.

Though family law can help, no one wants to end up in divorce court. The home sale process is governed by family law in a divorce, but if you get on the same page, you can get around that. A law firm can help without going to divorce court.

If you choose to sell the house and your spouse is not in agreement, hire a mediator or lawyer.

Be prepared for court

silhouette of man and woman under yellow sky

Image by Eric Ward via Unsplash

Not all couples are able to come to an agreement. If this happens, it’s a difficult road when the parties can’t make a decision whether to sell the home, keep the house, or even what real estate agents to use. Paying for a divorce attorney and preparing for court will likely be the next action.

The earlier couples get an agreement on how to sell the home during a divorce, the better. This will allow them to avoid costly legal fees down the line. It will also make the selling process much more easily accessible. Each party won’t have conflicting interests about whether they should keep, rent out to others, or sell their share of the home.

If no one takes steps early on to come to an agreement, everyone could end up subject to a court order.

Prepare your home for sale

fence near house for sale

Image by Alvin Engler via Unsplash

During divorce, there is a specified period in which you are selling a home. You’ll get more money if you sell the house with a real estate agent, but selling the house will go faster if you go with a cash home buyer. Get a pre-inspection of the real estate before putting it up for sale

If selling is the goal, it’s important to inspect the home to determine if there are any red flags for potential buyers. A pre-inspection by a qualified contractor can help determine if there are any problems with the property before putting it up for sale or listing with an agent. They’ll be able to tell you about any problems they see.

Repairs and updates

divorcing couple fixing up house

Image by Roselyn Tirado via Unsplash

When following the agent’s advice, it’s best practice to make repairs and updates to anything that may need it.

You’ll start with a thorough cleaning, decluttering, and staging the home with furniture. This makes prospective buyers appealing on paper and in person. If any structural issues or repairs need addressing, get them resolved so you’re not spending money on maintaining them while also being liable for any future damages.

In the listing, the agent will include a list of updates that have been made recently, such as new paint or carpets. After updating the home and making repairs, write out a list of all recent renovations for potential buyers. This will make the house more appealing to buyers by helping them know that this is a home they can move into and enjoy.

Keep a conscious timeline

If you are worried about selling your house due to emotional and mental strain, take all the time you need.

Try to keep in mind that, though this is hard, it’s also what’s best for everyone. Your youngest child might not even remember all of this chaos. Parents can move forward knowing that they have done their best during one of the most challenging periods in your life.

If you decide to sell it on the market, know that the property’s closing date is unpredictable and could be 30 days, 90 days, or more. A house is not going to get sold immediately. The buyout process isn’t a fast one.

Don’t forget about capital gains tax

One factor to consider is the capital gains tax from the sale of the property. Couples who are married and selling a home, can exclude up to $500,000 in profit. That only works before the divorce is finalized. After the divorce is final, it’s twice as much for selling a home.

To qualify for this exclusion, someone must have lived in the property for two of the last five years. It cannot be an investment property.

There’s a significant financial incentive to sell the house before the divorce is final. Reducing the real estate taxes and capital gains tax is worthwhile. If a spouse has enough income to make it work, selling the house during divorce through buyout can be the simplest way forward. 

How to sell your house during a divorce

When it comes down to crunch time, without much time to make repairs or put money into the property, selling the house quickly is essential.

The fastest way to sell a house as-is is to sell to a local investor. Investors are looking for fast home purchases, and they can get closing finished up quickly.

Investors don’t typically care about the condition of a piece of real estate. They often buy homes that are in need of significant repairs or have been abandoned. Even with that, before an investor looks at the house, it’s a good idea to move personal items out of the way and declutter. This gives them access to things like appliances and plumbing, as well as electrical and utilities.

A local investor will never charge any money upfront. The only time money should change hands is at the closing table.

Professional homebuyers are similar to investors, but these companies work with a whole team. They include lawyers, real estate agents, brokers, and contractors. Essentially, a professional investor is a turnkey operation for selling homes.

These companies have a lot of the same advantages as working with an investor during a divorce. For example, they offer an all-cash purchase, quick closing, and no fees.

Divorce experts

When you are ready to sell a home during divorce, you can work with a divorce expert.

These experts work one on one with couples who are trying to get out from under their home during a divorce. They walk the couple through the sales process to create a seamless home selling experience. The entire transaction is done in conjunction with family law practices.

Divorcing couples don’t even need to communicate directly with each other. If things are contentious, it’s possible to file separately with a divorce expert to do all of the paperwork.

There’s no need to work with a real estate agent to sell a house during a divorce. Mortgage payments will continue and property taxes will keep accruing during a long sale process. Going around a traditional real estate agent process to get it done fast.

Working with a divorce expert starts with submitting some information online. They then contact you with questions about the details of your home. These questions don’t cover things like spousal support or a joint tax return. However, couples can get a tax break if they get their home sold quickly.

Questions usually cover things like the condition of the house and the details of the timeline. Prior liens against the house are a priority, as are utility company charge offs. Anything directly related to the home is of interest.

Once the details are all there, the divorce expert will do a walk through of the property and make an offer.

Selling your house while divorcing

One of the most stressful things about divorce is trying to decide what to do with the home.

Anyone going through a divorce will know that selling the house is one of the first decisions and also one of the hardest decisions. Working with a divorce expert and trying to untangle the emotional realities versus the financial needs can really help.

How to Sell Your Home During Divorce in Charlotte North Carolina

When going through a divorce, many things happen, like property division and divorce settlement. The best thing to do is stay as calm as possible when selling your home after a divorce. This article will show you how to sell your house after a divorce in North Carolina.

What happens to the home after divorce

After a divorce, judges will divide property according to the equitable distribution method, which means that the court will divide your property in a fair way to each spouse.

Reasons why to sell after a divorce

Financial reasons

Insurance, property taxes, house payments, and upkeep can eat away at your finances. The Home Sale Tax Exclusion allows you to exclude up to $500,000 in gains from taxation if you are married and sell a home. The capital gains tax exemptions for someone who is single drop to $250,000. You must have resided in your house as a primary residence for two of the previous five years to qualify for the exemption. If one individual hasn’t been living in the home, it would be wise to sell the house before the divorce.

Legal reasons

If you can’t come to an even split, then the courts will decide for you. When the court chooses for you, more than likely, neither party will get what they want. Most divorced couples want to avoid a legal battle, so agreeing to sell the house and split the proceeds is a simpler option. Deciding on the split and agreeing to sell will prevent the North Carolina courts from getting involved.
court-how-to-sell-your-home-during-divorce-in-charlotte-north-carolina

Emotional reasons

The thought of how you and your spouse built a family in that home can be very unpleasant to live in. You may have children or pets in the home. You might have made many improvements and updates with your spouse to the home. Once your spouse is no longer living in the home, it can be very unpleasant and sad to live in. You have to think about the emotional aspect of keeping your home.

What couples usually do when divorcing

One spouse buys out the other and keeps the home. One of the spouses keeps the marital property for a specific time period. This is usually until the youngest child turns eighteen years old, and then the house can be sold. The house is sold right away, and there is equitable distribution.

How to sell your home during divorce

Getting prepared to sell

preparing-to-sell-how-to-sell-your-home-during-divorce-in-charlotte-north-carolina
Consider any maintenance your house may require before putting it on the market, and have a real estate appraiser evaluate its worth formally. Consider how to split any expenditures made if you decide to invest in repairs or improvements. Before you list your house for sale, talk about any additional concerns that may be important. Will one spouse stay in the home while it’s listed? Will they pay all of the mortgage and other expenses, or will you split them? Who will prepare the property for potential showings?

Choose how you are going to sell

The first step is to choose one of the three ways to sell a house. The best option would probably be selling with an agent while you are going through a North Carolina divorce. Choosing also depends on how fast you need to sell your home.

Real estate agent

If you sell your home for its market price with the help of a real estate agent, it should be feasible as long as you follow your agent’s instructions. However, before this happens, you must first decide how the proceeds from the sale will be divided up. Choosing the right agent to sell with is very important. You want to try and find an agent who has worked with divorced couples before because they have the experience and know what they are doing. Your agent will guide you through the steps to take to sell your home. When selling with an agent, there will be a commission fee of around 6%. So if your home sells for $200,000, you and your spouse are really only getting $188,000. If you and your spouse cannot agree on an agent, then you could have a family pick for you or even have another agent choose for you.

Investor

investor-how-to-sell-your-home-during-divorce-in-charlotte-north-carolina

Another way you could sell your marital home is selling with a local home buyer in North Carolina. Selling to an investor would be the fastest way to sell your home. They can have your house sold in 1 to 2 weeks. They make an offer on your home and pay with all cash. The only thing is you probably won’t sell your home for its market value, but you also won’t have to pay the 6% commission fee when you sell with a real estate agent.

FSBO

The last route which I would not recommend going is the For Sale By Owner Route. FSBO is when you sell the home all by yourself. I would not go this route if you just went through a divorce because you already have a lot of stuff to worry about in the first place. I would only sell FSBO after a divorce if you already have a buyer lined up, like family or a friend.

If you need to sell as fast as possible

As mentioned earlier, the fastest way to sell your marital residence home after a divorce would be to sell to an investor/we buy houses company. They will give you a cash offer and can have your home sold in a few days. When selling with an agent or selling by yourself, it will usually take at least three months.

Simple tips to make your home sell for more money

You can do some small things to make your home sell for more money, like making small improvements to the yard and even just cleaning the inside of your home to make it look more presentable.

Clean and declutter

Go around your home and look for anything that doesn’t belong where it is. Clean out closets to make them look as big as possible—vacuum and mop the floors to clean any hair or dirt on the floor—clean kitchen countertops and cupboards. Clean your bathroom and garage, and also clean your windows.

Remove personal items

If you are having showings or an open house party, you will want to remove any pictures or personal items that could make the buyer feel uncomfortable.

Improve curb appeal

Making small changes or upgrades to the outside of your home will give you a high ROI. Adding flowers or small shrubs to make the home look more welcoming is a good idea. Putting in mulch around your house or beneath bushes and flowers can look very beautiful. You can also power-wash the siding of your home or your deck if you have one.
curb-how-to-sell-your-home-during-divorce-in-charlotte-north-carolina

Avoid stress

Selling a home itself can be stressful, but selling your home after you go through a divorce can be even more stressful.. When selling your home, you want to try to stay as calm and relaxed as possible when going through the process. Getting stressed and upset can make the whole process harder and more time-consuming.

Accepting an offer

While the home is for sale, set a price that you and your spouse are both willing to accept. If you can’t come to an agreement, trust your agent’s advice. You may have to settle for a lesser sum if you want the transaction to finish rapidly. Keep in touch with your spouse, agent, and divorce lawyer as offers begin to come in. If you can’t agree on any proposals, remain open-minded and accept your agent’s advice.

Dividing the profit from the home

It’s the responsibility of your divorce attorney to separate the profit from a sale. In certain states, everything bought or otherwise obtained during a marriage is treated equally by both spouses, regardless of the deed’s name. Otherwise, the expenses and earnings related to a house sale might be different depending on the terms reached between your divorce lawyers. If one spouse paid more towards the mortgage or maintenance of the home during the marriage, they might receive a larger share of the proceeds. Occasionally, these conflicts reach the court system, where the judge must allocate profits. It’s preferable if you and your attorneys can arrive at an agreement amicably since few people walk away from divorce court pleased.

Selling your home after a divorce in Charlotte North Carolina

When selling your home after divorce, you first have to decide what you will do with the home. If you and your spouse both agree to sell it, you have to decide how you will sell it. The best two options for selling your home after a divorce would be selling with an experienced real estate agent or selling to a professional home buyer.

How to sell your home during a divorce in Grand Rapids Michigan

Nobody wants to get a divorce. It can be one of the most stressful things in life. Selling your property can also be very stressful. This article will show you how to sell your home during a divorce in Grand Rapids, MI.

Reasons to sell your home during a divorce

Emotional reasons

You might decide to keep the house because of its emotional value. You might have built a happy life in your home, including children and pets. With your spouse no longer living in the home, the happiness and joy of living in the home can become unpleasant and sad. Memories can change the way you feel while living in the house. This is something people do not take into consideration when thinking of keeping the home.
Emotional-how-to-sell-your-house-during-a-divorce-in-grand-rapids-michigan

Liability reasons

If one spouse wants to continue living in the home, they could take over the mortgage. If the spouse is making enough money, they could take over the loan and make the payments. You would have to talk to your lender and refinance the house. If you can do this, it eliminates your spouse’s liability. Usually, this does not happen due to the lack of income.

Determine if you are actually going to sell

You have to communicate with your spouse. You both have to be on the same terms to sell your house. If you both want to sell, then it will work out. If that is not the case, you will have to figure it out and make an agreement.

The three things couples do when getting a divorce

dividing-how-to-sell-your-home-during-a-divorce-in-grand-rapids-michigan
Usually, when a couple gets divorced, they do one of these three things. The home is sold as soon as possible, and the equity is split up. Another thing that happens is one of the spouses buys out the other and keeps the home. The last thing that happens is that one of the spouses keeps occupancy of the house until the youngest child turns eighteen and eventually sells the home.

How to sell your marital home during a divorce

Selling your home during a divorce is similar to selling real estate at any other time, except that you have to determine who gets what. You have to decide on how the money from the sale will be divided up. A good idea for this decision to be made would be through your attorneys. Once it is decided, you should bring in a real estate agent.

Choosing the right agent

real-estate-agent-how-to-sell-your-home-during-a-divorce-in-grand-rapids-michigan

If you can not agree on a real estate agent, you could each choose a relative, and they could choose for you. You could also go with the agent who helped you buy the house if you wanted. More than likely, you will want to bring in a real estate agent who has dealt with divorces before. They will need to have exceptional communication skills and patience because, more than likely, they will be dealing with two parties. Once you decide what agent you will work with, you will need to figure out how much your home is worth. Take into consideration any repairs or any major upgrades you have done to your house. After you find the value of your home, you can put it on the market. Follow your real estate agent’s advice.

If you need to sell immediately

If you do not have enough time to sell with an agent, which will typically take three to twelve months, you could sell with an investor in Grand Rapids. An investor will give you a cash offer and could have your home bought in as little as a week. You will probably not make as much as you would when selling with an agent, but if you need to sell the house fast, going with an investor is your best bet. You are probably wondering, “would an investor actually give us cash?” Investors almost always pay in cash, so if you sold with an investor in Grand Rapids, you could have cash in your hand in a short amount of time.

Clean the house

Walk around your house and clean up anything lying around or doesn’t belong where it is. Mop and vacuum the floors. Clean out closets to try to give them as much space as possible.

Paint the house

painting-how-to-sell-your-home-during-a-divorce-in-grand-rapids-michigan
Giving the walls a fresh coat of paint can make the house look more presentable. If there are any chips or stains on the walls, then painting them is a great idea.

Make the outside presentable

The last little tip to help you sell your house faster is making your yard more presentable. Buy flowers and mulch to give your yard a fresher and more welcoming look.

Reviewing offers

When you are reviewing offers, you will have to make the decision together. Your real estate agent can advise you, but you will have to agree and decide with your spouse.

Dividing the money

dividing-money-how-to-sell-your-home-during-a-divorce-in-grand-rapids-michigan

Finally, you have to figure out how you will divide the money equally, which usually isn’t too hard. The escrow company can distribute the money equally.

Selling your home during a divorce in Grand Rapids Michigan

Selling your home while going through a divorce can be super stressful. If you stay calm and relaxed, the process can go smoothly. The first thing you want to do is find the right real estate agent for you. Preferably you want an agent that has experience with helping divorced couples sell their home. After that, you want to figure out the value of your home and put it up on the market. If you need to sell your house fast, you could sell to an investor who would give you a cash offer instead of selling with an agent. They could have your home sold in a week. Once you decide how you will sell, you have to figure out how you are going to split up the cash.