The last thing you want to think about when you’re going through a divorce is selling the family home. However, there are many important things to address during this transition.
This is true regardless of who is currently living in the family residence and who is handling mortgage payments.
How Courts Handle Marital Property
What is defined as “marital property” varies from state to state. In general, it is a property acquired by one or both spouses while they were married.
Property is legally distributed among couples in two ways:
- Community property
- Equitable distribution
In a community property state, debts and assets are divided equally between both parties regardless of whose name is on them. In equitable distribution states, a spouse may be entitled to half of the home’s equity even if they do not live in there anymore.
The court divides marital property based on the distribution laws of a given state during a divorce.
Most laws take the following into account:
- How long a couple owned the home
- Whether children are involved and if they still live in the home
- Whether or not both spouses are listed on the deed (it rarely matters and in most cases, both parties share in the home’s equity)
- Each spouse’s wishes concerning the property
- How mortgage payments were handled
- Fair market value of the house
5 Things You Need to Know Before Selling a Property During a Divorce
1. You Need Your Spouse’s Consent
If your spouse is named on the deed and refuses to sign, then you cannot sell the family home without their permission. Depending on the details of your settlement agreement, the court may allow you get around this by ordering the unwilling spouse to sign.
If there is no written agreement to sell the house during a divorce, then your only option is to ask the court for assistance.
2. Discuss Your Intentions for the Sale
In addition to getting consent, you may want to discuss plans to sell the house. If one or both spouses are unwilling or unable to have this discussion, a divorce attorney can handle it for you.
This way, both of you will know each other’s intentions and what to expect before going into the process.
3. Evaluate Your Financial Situation
Before listing your home for sale, evaluate the debts and assets that you and your spouse have. Many of these are shared between the two of you.
This may include your:
- Bank accounts
- Rental homes
- Commercial buildings
- Investment property
- Any income-producing property
- Credit cards
- Medical debt
- Student loans
In some cases, you can use the profits from the home’s sale to pay off any shared debts. Knowing where you stand can help you make important decisions about the sale.
4. Make Sure You Have Permission to Pay Off Debt
Some attorneys will advise you not to use the profits from the sale of the home to pay off a shared or individual debt. To do this, you will need your divorce settlement agreement to permit it.
If you or your spouse is against this, you’ll need to discuss it during the divorce negotiations.
If you use the money to pay off debt without the other party’s consent, it can hinder the court’s ability to equitably divide properties after the divorce.
In some cases, the court will order you to pay a specific debt from the sale of the property.
You’ll also need to consider issues like unpaid property taxes, who will pay capital gains taxes, and how to pay any real estate agents involved in selling real estate.
5. Equity Amounts Vary from State to State
Not all states have equitable distribution laws for marital property. In some states, any equity that accrues during a marriage belongs solely to the party who is on the deed, regardless of how long you’ve lived in it together.
Make sure you understand all of these issues before putting your home up for sale during a divorce.
How to Sell a Home During Divorce
If you and your spouse have come to an agreement and decided to sell the house, here are five things you can do to prepare for the sale.
1. Prepare the Property for Showings Before Listing the Property
When you are ready to sell a property, you need to have it cleaned and repaired. A coat of fresh paint and minimizing clutter makes a home look larger and more appealing to potential buyers.
It’s also a good idea to remove your personal belongings so buyers don’t feel like it’s still your home. You or your spouse can rent an off-site storage facility to store items until after the sale.
Your real estate agent can help you make decisions about investing in improvements.
2. Take Fantastic Photos that Highlight Your Home’s Best Features
The online listing and photos are a potential buyer’s first impression of your home. Make sure you use high-quality images featuring the property in its prime condition.
3. Hire a Professional Home Stager
If you are worried that your property doesn’t look appealing enough to attract buyers, hire a professional home stager. These people know how to bring out the best in a home.
They can make suggestions, adjustments, and improvements on your home with your permission. They can present your marital home to buyers in the best way possible.
4. Offer and/or Accept Financing Options
If you are selling your home, consider accepting financing offers from buyers.
Cash sales make things easier. But if you only accept cash buyers, it can limit your sales options. If your goal is to sell fast and move on from your divorce, you have to consider offers from everyone.
5. Work with a Real Estate Agent
It can be tempting to save money and list the marital home by yourself. But you must avoid this if you can. The process can be complicated and it’s the last thing you need to deal with when transitioning to divorce.
Understanding the process of selling a house during a divorce can help you avoid problems Selling real estate is already complicated enough. And it can be more frustrating to handle during a divorce.
Seeking legal assistance is essential if you are selling a house during a divorce because it will give you peace of mind and protect your legal interest.