Divorce and selling a house (moving) are two of the most stressful life events a person can have. It's no wonder couples find it hard to be nice during these transitions. Who has to leave the house in a divorce? or Who gets to stay in the house during separation? Who is entitled to the equity in the house? We'll discuss these questions in todays video and don't forget to check out the download!
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One of the first things you should do once you've decided to divorce is talk to a real estate agent. Even if you decide not to sell your house, they can help you figure out the value of your home with a marketing analysis. Any liabilities of the home can then be deducted to get the equity of your home. With this information, each spouse can evaluate what they are able to do and how they wish to proceed. Make sure you contact a REALTOR® you are both comfortable with because the lines of communication will have to be very open between all of you.
The reason you want to talk to a real estate agent early on, is the best time to sell a home is before the divorce process has started. This keeps the motivation of your sale from buyers, and you are more likely to get a better offer. If you can stay in the home together during the listing period, it is better for showings. It's easy for an educated buyer or valuable buyer's agent to notice empty closets, missing pictures and furniture. You don't want them making a low offer if the home looks split up, so make sure to keep it show ready.
The worst time to be selling a house is during the divorce. The house will show signs of someone leaving and the court records will show the divorce is in process. A buyer is likely to use this to their advantage and make a much lower offer than the home is worth, making both of you lose equity. It is still important during this time to make the home look lived in and not abandoned or having missing pieces.
You will need to communicate with your spouse not only about payments of mortgage and utilities, but also who is going to maintain the home, who handles getting ready for showings and who will pay for repairs a buyer requests. Be prepared to communicate throughout the process for negotiations of sale price, inspection and anything else the buyer asks for throughout the process. Don't let your judgement be clouded by your feelings toward your spouse or the trauma of the divorce--make smart decisions about your bottom line.
Not as good as before the divorce but better than during the divorce is selling the house after the judgement. There is only one decision maker to decide on negotiations, repairs and maintenance. Buyers may know of motivation but it's not quite as clear. It's still important to fill in open spaces a leaving spouse may have caused. You will want to make sure to get the leaving spouse off the title as part of the divorce, so they don't have to sign at the closing. The spouse left to sell the house will be in control of the results and the only one to sign the final paperwork.
Who has to leave the house in a divorce? Well, you have a couple options about how you go about that, depending on if one of you owned the home before you were married or bought it together. There is the possibility of foreclosure if one spouse was not up front about the bills being paid or it could have been addressed in a prenuptial agreement. Of course, I'm no lawyer and you should get legal advice for questions about the divorce. Here are some different possibilities: 1. Sell the home and split the proceeds; 2. 1 spouse buys out the other; 3. Divide large assets; 4. co-own or deferred sale. Let's talk about each of these a little more.
Selling the house and splitting the proceeds will likely save you time and money. If you do this after the divorce is completed or during the process, you will have to pay additional fees for the attorney to review the paperwork. Make sure you are both going to stay committed to the listing and sale once paperwork is signed. If you don't wait until the sale is completed to start the divorce proceedings, it could delay the closing and your proceeds being paid out to move on to your next home.
Many people going through divorce don't realize one spouse can buy out the other and keep the home. It may be difficult with joint finances to figure out who has the money to buy out the other, but some couples have joint and separate accounts. The one who decides to stay will need to get a new loan and divide the equity with the other spouse. The one who isn't staying will lose appreciation and the one who is staying will take on the liabilities of a new mortgage. This can be a full payment or gradual, through payments ordered in a divorce decree.
There may be several large assets to divide other than just a primary home. The spouses may prefer to split up assets like vacation homes, boat, RV, stocks rather than just their primary home. This can make things go quicker because you don't have to wait to list and sell the home. You will still have to get the assets appraised so the sharing of the assets is fair and agreed to.
Divorcing spouses may decide to co-own their home especially when they have children and want to wait for them to graduate. This does still mean payments and maintenance will have to be divided, but both spouses will benefit from appreciation of the homes' value. If you continue to co-own but only one spouse lives in the home, it could affect the capital gains taxes when sold. To get the credit, you must live in the home for 2 of the last 5 years. This could be a large or small considering the value of your home and how much it has appreciated since you bought it. Another possibility with co-owning is using the home as a rental property or bird nesting. This is an option where the child(ren) stays in the home and parents switch houses for visitation.
When do you have to sell a home during a divorce? Maybe neither of you can afford the home and its maintenance on your own. Make sure you make a budget of your own income and expenses before you decide to take on the mortgage. It may be too much and the stress it will put on you is not worth it. The judge may order you to sell the home as part divorce decree. When you and your spouse can't agree on the value or equity in the home, you'll need to sell to get the right split. Often times it's too emotionally painful for either spouse to stay in a home with all the memories of each other or their times together.
When you bought your home, surely you were excited and optimistic about your future together. It's now likely become your largest asset and will be the biggest pain and problem to make the divorce complete. It is important to have someone you can trust to take through the transaction of selling your home. Make sure your REALTOR® is available whenever you have a question. My goal is to sell your house for the best price in the quickest time with as few headaches as possible. Interview agents in your area to ensure their goals align with yours.
To help you with all the details of divorce and your home, download seven crucial considerations! Thanks for visiting our page and come back to check out future blog posts, videos and downloads.
