There are 3 typical outcomes during a divorce. Many factors play a role during a divorce. A divorce can cause emotional responses and decisions that are not logical because the mind is clouded by current emotional stress.
Selling may be the best option depending on factors like financial, legal, or personal. For example, if the divorced couple purchased the home years ago expecting to make the mortgage payments using both incomes, it might not make sense to keep it.
For most couples, their home is their most valuable asset and can also come with sentimental value. As a result, one spouse may want to keep the home while the other wants to sell it. Things can become complicated when both want to keep the property, and neither is willing to negotiate.
So, how do you decide who gets to keep the house?
When both spouses want to live in the home after a divorce, they need to develop an agreement that will work for everyone. For example, one of them could stay there until it is sold and then move out. This way neither has custody, but at least they don’t make matters worse by forcing attorneys and the court system to decide the outcome of their real estate.
If you and your soon-to-be-ex still have a civilized relationship it is always suggested to work out what to do rather than take matters to a divorce attorney.
The three most common scenarios that take place for divorcing couples:
A buyout is when the divorcing couple decides that one spouse will “buy out” the interest of the other. Typically the custodial parent will buy out the noncustodial parent to keep the children at home. This scenario is ideal if you have kids and want to provide stability or if the market conditions aren’t ideal to sell.
Buyouts don’t always happen all at once. Sometimes they can occur over time, and the details will usually be in a settlement agreement or part of the divorce settlement. However, a buyout almost always involves refinancing the property under one person’s name.
If this is the route you decide to take, it’s important to determine the home’s value. If you and your spouse can’t agree on the house’s value, it is recommended that you get a 3rd party to appraise the home.
In most cases, one person will apply to get the home refinanced under their name only. For example, let’s say the home currently has a mortgage loan with a principal balance of $200,000 and an equal amount of equity in the house ($200,000). You would need a loan of at least $300,000, one-third or $100,000 to payout the equity of your spouse and the remainder $200,000 to pay off the previous loan.
When you sell your house during divorce proceedings, it proceeds like any other sale. Your spouse signs the deed to transfer ownership of the property to you, and an escrow company takes care of most of the paperwork and transfer of funds.
If you and your spouse started a family together, it’s important to factor in your children’s needs before making any final conclusions on what to do with the home. Under the stressful circumstances of getting a divorce and potentially selling your home, it’s important to include your kids in the process (depending on their current age)
Although oftentimes finances will be the deciding factor, it can help your kids transition during this difficult time if you listen to what they have to say about selling the home.
It’s essential to make sure that everyone is on the same page regarding the home’s sale. We recommend getting a written agreement between each other, laying out the plan and how the profits from the sale will be split. If you are unfamiliar or uncomfortable doing this without any legal advice or an experienced agent, be sure to hire someone to help dispute any disagreements.
If you choose to sell the house and your spouse is not in agreement, hire a mediator or lawyer.
Disputes over how to divide assets during divorce could be emotional for both parties and often avoidable if an experienced attorney was involved from the beginning of the process. With someone on board that understands all aspects of family law, it’s much more likely that things will run smoothly throughout this stressful time. Some possible outcomes include selling the home together with a 50/50 profit split between spouses. One person moves out while the other continues living there until sale; then profit splits according to the amount displaced by each party once sold. Another option would be where one spouse stays put as long as they pay rent towards mortgage payments.
An agreement doesn’t always happen between a couple going through a divorce. If this is the case, whether you can’t choose to sell the home, keep the house, or even what real estate agents to use, paying a lawyer and preparing for court will likely be the next action.
An agreement on how to sell your home during a divorce is crucial and should be factored in early on to avoid costly legal fees down the line. It will also make selling much more accessible as each party won’t have conflicting interests about whether they should keep, rent out to others, or sell their share of the home when going through divorce proceedings. If this does happen, though, either way, take steps early enough so you’re not stressing over it long into the process.
If selling is the goal, it’s important to inspect the property 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.
It’s best practice to make repairs and updates to anything that may need it.
This includes a thorough cleaning, decluttering, and staging the home with furniture that will appeal to prospective buyers to make your house more appealing on paper. 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.
If you aren’t sure what needs to be replaced or are unsure if there is any structural damage, hire a local agent or investor to walk through the property for feedback.
After updating the home and making repairs make 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.
Finally, get ready for showings! Keep the time between appointments short, so potential buyers aren’t spending too much time inside your home as it could impact their opinion on purchasing it. If possible, plan out which rooms are available for viewing before any showings start.
If you are worried about selling your house due to emotional and mental strain, take all the time you need.
Remember that this process is for the best. You will be able to move forward knowing that you have made all necessary preparations to make it through what could be 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.
One factor to consider is the capital gains tax from the sale of the property. If you are married and selling a home, you can exclude up to $500,000 in profit, twice as much if you wait until the divorce is finalized or are single.
You must have lived in the property for two of the last five years to qualify for this exclusion. The home must also be your residence, and it cannot be an investment property.
This means that there is a substantial financial incentive to sell before your divorce is finalized to avoid or reduce property taxes when selling.
If time is in a crunch and you don’t have time to make repairs or put time and money into it, you may need to sell it quickly to get cash to move into your next home. The fastest way to sell your house as-is would be to sell to a local investor. Investors are interested in quick purchases, and they can close quickly.
Investors typically don’t care about the condition of your home. They often buy houses that need significant repairs or have been abandoned, for example, condemned property. But there might be a few things you can do before an investor takes over: remove personal items, clean up clutter; give them access to check the appliances like plumbing fixtures, etc.; show how well-kept the yard looks if you want them to invest time into landscaping.
Working with a local investor is entirely free, and they will be able to give you a cash offer on your property within only a couple of days. Investors almost always buy real estate with all cash which means a straightforward and fast transaction.
Another great option is to sell to a group of professional home buyers. This is a hybrid alternative to selling to a local investor. Experienced homebuyers are still investors but are well established and have an entire team behind them of lawyers, agents, brokers, contractors, and a full-time staff. They offer the same perks of investors (all-cash purchase, no fees, flexible closing date, simple process) plus free consulting and a professional experience.
Connect Home Buyers has been buying homes since 2017 and have helped hundreds of homeowners sell without the hassle of traditional methods. We work one on one with every one of our clients and experience the sale process of divorcing couples. As a result, we can help you through the process and make it seamless to get your house sold with no worries.
The first step in selling your house is submitting your information on a form on our website. We will then contact you for details so we can facilitate an offer, including asking questions about the condition of the property and your unique situation, how much you want for your home, and other factors that may impact us making an offer, such as if there are any prior liens against the property from utility companies or charging offs from previous homeowners. Once accepted, we will walk through the premises with one of our agents and close on your preferred date.
“Because this is new for us, the whole process is new for us. Working with the bank, working with your actual realtor. We didn’t even have to get a realtor, so we had to do nothing. The only thing we had to do was paperwork with the bank, and you all took care of the rest. You made us comfortable leaving our home. We didn’t worry about it and sit back and say, well, maybe we made a mistake. There was no second-guessing with us because you didn’t make us second guess. You made us feel comfortable that this is the right choice, and we are doing the right thing.” -Mike
“I want a process I don’t have to put any work into it. Because I’m away from the house, I’m a couple of hours drive away. I said I don’t want to go to closing; I don’t want to have to show up at the house, I don’t want to have to show up a meeting with anybody. I want to collect a check and be done with it and have it done quickly within, you know, two to three weeks or so, and that’s what you guys were able to supply for me, and that’s what I wanted. At first, you knew what you were talking about right, I’ve had a lot of people call and different things and try to-and you could tell they were maybe just out of a new class or something where you get a lot of flippers, and they start emailing out to everybody. Right off the bat, it seemed like you guys knew what you were talking about, and you’ve done this before, and you had the investors. It seemed to be a little more legit than a lot of these cold callers that you get that wanna buy your house.” -Tom Stall