Going through a divorce is never easy, but selling the family home you once shared can make an already difficult situation even more complicated. However, with some planning and legal guidance, you can navigate this process as smoothly as possible. This guide covers everything you need to know when selling a house in a divorce.
- Get an objective divorce appraisal to establish the home’s fair market value for equitable division of assets.
- Consult an attorney to determine the classification of the home and best time to sell it amidst your divorce proceedings.
- Hire an experienced real estate agent to assist with pricing, marketing, and coordinating the sale to fetch top dollar.
Get a Divorce Appraisal
One of the first steps is to get an appraisal done on the home so you and your ex have an agreed-upon fair market value. This prevents later conflicts over any disparity in perceived value. Be sure to engage an appraiser who understands the implications of divorce appraisals. They will do a thorough comparative market analysis, considering similar recently sold homes in your area.
The appraiser will factor in the condition and desirability of your home along with current market trends. This helps establish a neutral starting point, so emotions don’t cloud pricing decisions later. Lawyers often recommend each spouse hire their own appraiser and mediate if the two valuations differ significantly. The final divorce appraisal amount carries weight when determining equitable division of assets.
Understand How It’s Classified
How the house is classified in your divorce settlement has important implications for the sale. Marital property states view it as a shared asset, while separate property states consider it the possession of whoever’s name is on the deed. In community property states, ownership depends on whether it was acquired before or during marriage.
Consult an attorney to determine your situation. If deemed marital property, you may have to split sale proceeds evenly, after deductions for mortgage and expenses. If separate property, the owner retains rights to proceeds but may owe the spouse some payment for investment in the home. Discuss options like buying out the other party’s share.
Pick the Right Time to Sell
It’s typically recommended to finalize the divorce first, then sell the former marital home. This avoids major financial decisions at a turbulent time. But in some cases, it makes sense to sell the house first, especially if you both agree to mutually list and sell it. Selling it from the outset can give you a clean break and eliminates ongoing ties.
However, if there are large discrepancies in how you envision the sale, it may have to wait. A lawyer can request the home gets listed in the final divorce decree, with specifics like listing price and timeline. If you sell before finalizing divorce, have a clear written contract on how you’ll divide proceeds.
Prep the House Thoroughly
To net top dollar in a sale, you’ll need objective eyes to prep the home like any other sellers would. Set aside differences with your ex and clean, declutter, and repair the property to showcase it in the best light. If one of you has already moved out, the remaining spouse should make key cosmetic upgrades like painting walls neutral colors, adding curb appeal, staging rooms, and removing personal artefacts. Avoid letting negative emotions impact prudent sale prep.
Consider Pros and Cons of FSBO Sale
Selling ‘by owner’ without a real estate agent may seem cheaper and simpler, but consider downsides too. You lose the agent’s professional pricing advice, photography skills, and broad marketing exposure. Also, buyers often perceive FSBOs as more problematic to work with. Instead, research realtors with expertise in divorce sales – their fees may well be worth the hassle they save you.
Selling a House in a Divorce – How a Realtor Can Help
Speaking of realtors, the right one can make the whole divorce home sale process infinitely smoother. Look for an experienced realtor, like Chris Schmidt, who has worked with divorcing couples before. They’ll help you navigate unique challenges, like:
- Pricing it competitively without undervaluing. Emotions can distort your perspective.
- Handling the awkwardness of both spouses being present at showings. The agent is a helpful buffer.
- Coordinating listing logistics and timelines to align with your divorce settlement.
- Advising if repairs or staging will lift the home’s value to help offset divorce expenses.
- Marketing the home extensively so it sells quickly at full price.
- Guiding you to act rationally even when tensions run high with your estranged spouse.
- Drawing up a contract that protects both parties’ interests in the sale.
- Ensuring the home closes on time so you can each move forward.
Avoid any agent who tries to steer you toward a quick, low-ball offer. A thoughtful realtor advocating for your top price makes all the difference.
Consider a Cash Offer to Expedite Sale
During a divorce sale, a cash offer can be tempting because it provides speed and certainty. If you and your ex-spouse are eager to sever financial ties and move on, the right cash home buyer can make that happen fast. However, don’t rush into a low cash bid just to get it over with.
Your agent can market the listing widely and still give quick cash home buyers priority review. This allows you to compare offers and select the best overall value sale – not necessarily the first flash of cash. Beware pushy investors who sense your urgency and make aggressive low-ball bids.
Consult your attorney before accepting any offer to ensure your rights are protected. While all-cash deals can close quickly, a more competitive financed offer could still put more money in your pocket. Don’t let frustration over your complex divorce push you into a sale you’ll later regret.
Understanding tax implications is also key. You may owe capital gains taxes on any profit if you don’t qualify for the IRS home sale tax exclusion. This exclusion lets you shelter up to $250,000 of capital gains profit as an individual, and twice that for a married couple filing jointly. But to qualify, you must have owned and lived in the home as your primary residence for two of the last five years. Rules are complex, so discuss the tax effects of any potential sale with your CPA.
Stay Flexible and Cooperative
During this difficult transition, your best move is to stay flexible and encourage cooperation with your ex whenever possible. Litigation over the home sale usually only hurts you both. Setup regular meetings to discuss issues and make collaborative decisions. Seek mediation whenever needed to reach equitable compromises you both can accept.
Also build in contingency timelines in case unexpected delays occur. Over prepare the house for sale so it shows in the best light when the time comes. And communicate clearly with your divorce lawyer, real estate attorney, appraisers, and agent to coordinate timing and resolve any disputes rationally. If selling the home you once shared is handled cooperatively, it can actually strengthen the foundation for an amicable overall divorce settlement.
Selling A House During A Divorce
Selling a house in a divorce and in tandem with finalizing a divorce is certainly not easy, but many others have navigated this path before you. Heed the advice above to tackle each step thoughtfully. Protect your rights and investment value with experienced legal and real estate professionals by your side. Approach the process with maturity, patience, and care for your ex-spouse’s interests too. Maintaining constructive communication and level-headed decision making will help you both transition forward.
What Realtor Can Help?
Call Chris Schmidt to get expert advice on selling a house in a divorce. The team at Your Home Sold Guaranteed Realty - Chris Schmidt Team has years of experience in assisting clients through this sometimes delicate process.
We will give you excellent service that is personalized to your needs. We always take time to understand your real estate goals and priorities. Once we do, we will help you create a customized plan that no other realtor can offer. That’s the kind of service you get from the best realtor in Houston, Texas.
Your Home Sold Guaranteed Realty - Chris Schmidt Team uses proven and effective marketing strategies for any property you list with our team. And as a home buyer, we’ll get you insider access to local market information and the best and newest listings.