Wondering how to sell a house during a divorce? Do you sell a house before or after a divorce?
Divorce has become so prevalent in today’s society that most people have come to accept it as a norm of life. On average, about 40-50% of married couples in the United States end up in divorce. Statistically, this percentage is even higher for people who get remarried at some point down the road.
Even though divorce is a common occurrence nowadays, this doesn’t take away from the fact that with it often comes a lot of stress, financial upset, and emotional pain. Not only are two people who had vowed to spend the rest of their lives together splitting up, but there are typically children and other family members that also have to endure the upsetting changes that come as a result of their separation.
When you step back and assess the impact of a divorce, it’s not just hopes, dreams, and expectations that need to be reevaluated, but also the assets that that couple shared. One of these assets, in particular, is their home.
It is never easy having to move out of a house where you have laid down your roots and shared so many wonderful memories with loved ones. The attachment that one has to a house they’ve spent years calling home is very hard to break.
Unfortunately, divorce often requires a couple to let go of the home that they shared together, cut their losses, and start fresh. So, what steps should you take when it comes to selling your home as you are undergoing a divorce?
Find an Experienced Real Estate Agent
Going through a divorce is a challenging affair. It’s common for a couple going through this significant upheaval to be less than civil with one another since many feelings revolve around being hurt, betrayed, or possibly feeling left out of the other person’s decision to unilaterally end the marriage.
Whatever the case may be, there is bound to be some displeasure and maybe even a degree of resentment between the former partners. This can make it difficult for any real estate agent who doesn’t understand what’s going on or even one that does but doesn’t know how to handle the situation appropriately.
If there is constant bickering between partners, the whole process is much more difficult for all parties involved. For this reason, it may be most beneficial to find someone that has experience with handling property sales that involved a couple going through a divorce.
This real estate agent will need a variety of soft skills to help navigate the sale without needing to pause or delay the process each time a partner may raise an issue or concern or butt heads with the other individual.
They will also need to be good at negotiating between the two partners and mediating conversations between all parties involved. Perhaps the most important skill would be the ability to handle a highly charged situation while calming people down enough to stay on track and complete the task at hand.
To find someone with these qualities and feel confident that it’s a good fit, both you and your partner will need to agree on a specific agent that understands your needs. This arrangement will ensure that no one feels left out of any communications between the agent and the homeowners. A lack of cooperation between all three individuals can derail the entire process of selling the home, so everyone must be on the same page.
One Party Should Remain in the Home
The chances are that by the time you and your partner agree to a divorce, you are so upset or angry about what is happening that you no longer desire to share the same living space. This may prompt both of you to want to move out of the home, which could work against you.
Many real estate agents love to use staging when showing prospective buyers how welcoming and functional a home is. This process involves styling, furnishing, decluttering, and strategically decorating a house to emphasize its best features and help buyers visualize living in it themselves.
Rather than selling an empty and lifeless home, staging has been proven to work wonders by improving first impressions and reducing the time a house spends on the market. This is why it’s beneficial for one party to remain in the home, keeping some light decorations and furniture in place to set the stage for potential buyers.
Real estate agents can stage an empty home, but this could end up costing you thousands of dollars. With one party still living in the house, prospective buyers will be greeted by a welcoming and lived-in space instead of bare walls and empty floors.
Also, if one party remains in the home, for the time being, bills related to any maintenance of the house are more likely to be kept in check. Paying for an additional place to live while still keeping up with the home you and your partner once shared can become very costly very quickly.
Agree on a Price Before Listing the Home for Sale
A great thing about finding an agent that you both can work with is that they will help you understand how to get your home to sell as quickly as possible, and they will also help you and your partner see eye to eye on some things that are necessary for the sale of the home.
There are a few key points to address, such as how much you both are willing to accept as the lowest possible offer. A quick discussion between the three of you will help clear this up. It may also be in everyone’s best interest for you and your partner to have a written and signed agreement or stipulation covering all crucial details regarding selling your home.
There will also be some other important details to go over, such as the cost of repairs, whether one partner is staying in the house, the possibility of paying for staging, and which partner has which responsibilities when it comes to the sale of the home.
On the agent’s end, they will most likely want to know how much detail each partner would like about the day-to-day marketing of the home, who wants to be informed about viewing appointments that are made, and how much notice each party needs before the house is signed over to the new owner.
Hire Help Where it’s Needed
People who are going through a divorce are not on the same page, at best. But at worst, they could be extremely at odds with one another and perhaps even at each other’s throats. This makes the possibility of them working together very difficult since each will be pulling in their own separate direction.
If this is the case, you can hire other people to help with different matters pertaining to the home in preparation for the sale. Apart from a real estate agent, you will also need an individual to help coordinate any appointments or repairs at the house.
As you are selling your home, you may need various people to get the house in perfect order. This list of individuals often includes painters, electricians, landscapers, movers, and if you both decide to move out, home stagers. These people will need someone to coordinate with them on when and how they should be working.
Since you and your former partner are out of step with each other, it would be best to get an agent to coordinate things around the house. An agent can also help find and hire any personnel needed to repair, move, and stage your home. There are many full-service agents available for you to choose from that will help ease the burden that you are already carrying and allow you to focus on what’s most important.
Factor in Tax Implications
One of the benefits of being in a marriage is the tax breaks that you get to enjoy on various matters. A good one to consider is the relief on capital gains tax, which is a tax levied on the profits you receive after making a sale on an investment that you had, such as your house. In some cases, this tax can go as high as 22%.
There are exemptions when it comes to home sale tax. Each individual has an allowance of up to $250,000 of capital gains that they can exclude from taxation, and this rises to $500,000 for married couples. This subject will need coordination between you and your partner. Do you need to finalize the divorce immediately, or can it wait?
If you sell the home after your divorce is finalized, the amount of tax you will each pay on the proceeds of the share of the sale will be much higher. This is in comparison to selling your home while you are still married to each other.
The difference in taxes could mean a significant amount of savings for both of you, which is why you should visit a tax consultant before moving forward with the sale of your home. They will guide you on how to best go through with everything in a way that benefits both parties and gets you the best return for your mutual investment.
Don’t Rush the Process of Selling Your House
It’s always best to take some time to think and consider your options before making any decision that’s likely to have a very significant impact on your life. It’s easy to make an impulsive decision when one is in an emotional state. However, these decisions rarely turn out to be the best or most well-thought-out.
If an important decision is made when one is angry or upset, this could lead to a lot of regret in the future and even to actions that can have serious consequences. Before deciding to sell your home, take the time to have a conversation, or several, with the other party. Selling your house is a big step that either one of you, or maybe even both of you, may not be ready to make. If there are children in the home, prepare them in advance to help minimize the shock they will experience when the time comes to move.
You will also need to have conversations with a number of advisors who will help guide you through the different matters that come up in a divorce and what you need to do to help move through the process. These advisors typically include your lawyer, your financial planner, and your tax advisor.
Take the Time to Say Your Goodbyes
Moving into your house was probably one of the happiest moments of your lives, so the thought of it no longer being your home in the near future can be very upsetting. If there are children involved, it becomes an even more emotional affair to uproot them and completely change their environment.
Whatever the case may be, it is likely that both of you are quite attached to the home for one reason or another. One partner may not be ready to let go of the house, which can be a problem when it comes to selling it.
It would be best to take your time and have a conversation with the other party before hiring the services of a real estate agent. This will allow both of you to move at your own pace when it comes to letting go of the home.
It is not uncommon for a divorcing couple to have a heated argument just before the sale of their house is concluded, which could throw the deal into disarray. If there is a chance that one party could create conflict, then it would be best to sit down together and decide what you both want beforehand.
If both you and your partner need the money to start your lives anew, try to let go of your resistance to change and focus on moving forward in a positive direction. Saying goodbye to your home is not an easy feat, but it’s an inevitable part of a divorce for at least one party involved.
Having to divide up all of your assets and sell your home during a divorce is an undoubtedly emotional and stressful process. This situation is rarely ever simple or straightforward, and each scenario varies depending on the couple. If you are not on good terms with your soon-to-be ex-spouse, then it may be a good idea to seek some mediation and legal advice so that you both receive what you’re entitled to in the split.
If you’re able to settle things amicably, then you will both be able to walk away with the money needed to move on with your lives without adding any additional strain to an already exceptionally trying time in your lives.
How To Sell A House During A Divorce Quickly
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