Money is cited as the reason for many divorces and is even one o the…
If you are getting a divorce, you and your spouse may need to sell your house. Often this is the better choice if neither one of you wants to continue to live in the home, neither is in a financial position to buy out the other party's half, or the property division aspect of your divorce settlement requires you to sell the house and split the proceeds. While selling a house may be the right choice, it's not always easy. To help you get the best outcome, our Raleigh divorce attorneys are sharing 10 tips you need to know when selling your house during a divorce.
Dividing the Costs of Selling a House During a Divorce
When you and your spouse are putting your home on the market, you have to consider the costs that will come with your home being on the market.
Paying a Mortgage or Home Equity Loan
Dividing mortgage payments during the home selling process should be lined out in a separation agreement or divorce settlement. However, if both parties can agree to how the mortgage is paid, common options include:
- If one party continues to live in the home, that person pays the mortgage as a type of "rent."
- Both parties paying half of the monthly mortgage, which is generally common if both parties were equal in paying bills during the marriage.
- One person can pay the mortgage, and the amount paid can be added to his or her portion of the sale profits.
- If one person was responsible for paying the mortgage while the other was a homemaker, that may continue during the home selling process.
Additionally, costs accrued during the actual home sale, including taxes and realtor fees will also need to be discussed prior to putting the home on the market.
Choosing a Realtor to Sell Your Home During a Divorce
During an acrimonious divorce, it may seem like deciding on anything becomes an argument. Choosing a Realtor or real estate agent can even become an argument. We would recommend that if you were pleased with the Realtor you used when you purchased the home, contacting them to sell the home, or seeing if they can recommend someone.
Deciding on a Sales Price
Setting a sales price on your home may become a point of contention, especially if one person wants to sell it quickly while the other person wants to set the higher price and is willing to wait. If this happens, defer to your agent's recommendation of what your listing price should be. However, if the price he or she recommends is far outside what either of you had in mind, you may want to consult with another Realtor.
In some cases, your divorce attorney can work with you on valuing assets and assisting with the home appraisal process to help you list at a fair price.
Living in the Home During the Divorce Process
While your house is on the market, will one of you be living in the home? If so, this person should probably be the one keeping the home ready for show, meaning keeping the home and lawn neat and tidy. Otherwise, you both should consider a housekeeping or lawn service to keep the house maintained for showings.
If you both move out of the home, you will want to discuss if the house should be staged and maintained, and how to pay for these expenses.
Paying for Home Repairs
When selling a home, repairs often need to be completed to get the house ready for the market. This could include paint, plumbing repairs or even major electrical or structural updates. Before the house goes on the market, you both need to sit down and determine what repairs you are both willing to make on the house. You may need to consult with your Realtor to determine what is necessary and what is not.
Crediting One Spouse for Payments and Repairs
If one spouse was responsible for making the mortgage payments, keeping up with repairs, and paying for a lawn service, it's important to agree whether or not that spouse may get a larger share of the proceeds from selling a home. Additionally, if any repairs or updates added value to the home, that is another factor to consider when dividing the proceeds.
Damage Accrued While Selling the House During the Divorce
Until the home sells and the mortgage is paid off, the home is considered marital property. However, if damage occurs that is not covered by insurance, who is responsible for paying for it?
Has Property Division Taken Place?
During a divorce, the spouses must decide, or a judge will decide, how property is to be divided. If the property has not been divided, will that be done before or after selling the home? You also need to consider if property will be removed before or after closing.
Deciding on an Offer When Selling Your Home
You may receive several offers for a home or you may only receive one that includes a lower price than you are asking. There may also be items in the contract about making repairs or closing dates. Both parties must agree on the terms of the sale and the offer they choose. If you can't decide, your Realtor may offer some helpful insight. Otherwise, you may want to consult with your divorce attorney to determine what the next step is.
Dividing the Proceeds from Your Home Sale
If it's not already outlined in a separation agreement or divorce settlement, you need to determine how the proceeds of your home sale will be divided. First, it's important to remember that 7 to 10 percent of the proceeds will go toward fees, such as your agent fees and taxes. The rest will be used to pay off any existing mortgage.
After that, it's important to determine how any fees will be paid, if the home sale did not cover everything, or how any proceeds will be divided.
Adding Your Home Sale in Your Property Division Settlement
If you two cannot agree, it's important to have a divorce lawyer act on your behalf during this process. Your lawyer can walk you through your options, connect you with a knowledgeable real estate agent, and file actions including a Motion for Interim Distribution. This will ensure the home is addressed before other aspects of the estate to eliminate issues during the sale process.
Contact Our Raleigh Divorce Attorneys to Ensure Equitable Distribution
Our Raleigh divorce attorneys will work on your behalf to ensure your home sale is beneficial to you and help you get the best outcome. If you would like to schedule a consultation to discuss these items, please contact our office at 919-301-8843, and one of our family law attorneys will be happy to meet with you to discuss your unique situation.