A divorce can cause stress and anxiety. Besides emotional stress, most couples that choose to divorce may experience financial difficulties due to the high cost of processing the divorce. The financial strain causes couples to split assets that often include their marital home. However, there’re times this decision isn’t easy for the parties involved. One may wish to sell the home, while the other prefers to keep it. On other occasions, both spouses prefer to retain the house. In such situations, the most logical thing to do is sell the property. If you’re in the process of ending your marriage, here are five requirements for selling your house during divorce:
1.Both Parties Should Agree To The Sale
Letting a home go can be challenging for spouses. However, selling it offers divorcing couples the emotional and financial freedom they need to put through the process. Before selling your house during divorce, the first thing spouses should do is agree that it’s the best thing to do. Having agreement ensures that both spouses remain on the same page enables them to discuss their expectations directly and maintain open communication. This keeps the divorce process going whenever emotions run high.
2. Prepare For The Sale
Even with a booming property market, you need to prepare well to sell your house during the divorce. One way of preparing to sell your house is to check whether you need to undertake any repairs. If there’s a need to upgrade the home or repair faulty areas, discuss how this would be done and complete them before listing your home on the property market.
Both spouses must agree on splitting expenses relating to the upgrades or repairs and how those costs would affect profit sharing. To avoid conflict, divorce parties should involve their divorce attorneys and formalize the agreements even before putting in more cash towards the home.
3. Establish How Much The House Is Worth
When you’re selling your house, you need to be clear about its value to avoid overpricing or underpricing it. Before placing the house on the property market, get a home appraiser to assess your home and issue a valuation report formally.
Besides the cost aspect, preparations for selling a home during divorce should also entail other pertinent matters, including mortgage repayment and participation in house showings. Further, agree which spouse would remain in contact with real estate agents and whether one spouse will continue living in the house after it’s been listed.
Once spouses are ready for the sale, they should identify an experienced real estate agent to assist with selling the house. A good agent works towards helping couples achieve their common goal and one who’s good at mediating conflicts.
4. Agree On The Selling Price
The other requirement for selling your house during divorce is an agreement on the selling price of the home. This becomes easier when divorcing couples work with experienced real estate agents who have handled sales in divorce contexts. Ideally, the agent should ensure that divorce parties agree on essential details before listing their homes. These include:
- The lowest price would be willing to accept for their home
- Which spouse leaves the house or stays
- How payments for repairs and staging costs would be paid
- How cleaning, painting, and repair works would be done
- Whether each spouse must be present during showings
- Specific responsibilities that each spouse has in the sale of the home
- How much notice each spouse would need before the sale closing date
- Whether or not to involve real estate lawyers in the sale
- Times that are off-limit for appointments
5. Clarify Tax Implications Of The Sale
Divorcing couples must clarify tax implications before selling their house during divorce. Essentially, the sale of a marital house during a divorce may attract capital gains. However, there’s a high chance that divorcing couples may enjoy exemptions when the property they’re selling is their primary residence.
When selling their home, couples can work with a tax professional to structure their home sale and divorce in a way that preserves capital gains exemption to maximize income from the sale. This is best done before moving the sale or the divorce forward.
If you’re selling your home during divorce, you need to address any financial and legal issues that may be pending between you and your spouse before listing the property. Adhering to the five requirements discussed above can help you avoid problems that may arise during the sale and enable you to maximize income from the property.