Going through a divorce takes an emotional toll on both parties. Of course, there are also financial implications as a couple attempts to decide on joint assets. How will they split bank accounts, retirement accounts, and any valuables?
The most discussed asset during a divorce, though, is the house. Many divorcing couples find that selling their residence tends to be the safest, least stressful option. But it’s good to have an idea of what this process entails and how you can ensure a smooth transaction.
Can I be forced to sell my house in a divorce?
Let’s say you and your spouse want to keep the house if at all possible. However, if either one of you is unable to buy the other one’s interest, you will likely have to sell the house. The same holds true if both parties can’t seem to agree on the home’s value.
Whether the separation is amicable or not, a lot of couples struggle with this decision. And it makes sense when you consider the level of commitment that goes into buying and maintaining a home. So don’t hesitate to reach out to a real estate attorney if you aren’t sure about the next steps.
Selling property before divorce settlement
When during the divorce process should you sell your home? Well, it ultimately comes down to the preferences of you and your spouse. Couples who are on good terms with one another may benefit the most from selling prior to the divorce being finalized.
Think about it for a moment. Home prices continue to rise, and have been on an upward trend for the last few years. That means the two of you probably have a decent amount of equity to split.
You could use those funds to relocate to a new state and give yourself the fresh start you deserve. Another idea would be to rent for a while and then use the money from the sale to achieve other financial goals. Imagine finally being debt-free or having the flexibility to travel the way you’ve always wanted!
Just keep in mind that choosing to sell your property before the settlement could delay things a bit. There’s never a guarantee of a quick sale regardless of market conditions. That’s why it’s important to work with an experienced real estate agent who knows that it takes to sell a home fast.
Selling a house after divorce agreement
Maybe you’re envisioning a messy divorce that’s filled with anger, resentment, and bitterness. In this case, it might be worth putting off the home sale until the two of you settle the separation. Doing so allows you and your spouse to hopefully work together more effectively and prevent any lingering emotions from ruining the sale.
Capital gains also plays into the equation. HomeLight explains that you’ll have a better chance of avoiding the capital gains tax by selling during the divorce. Conversely, you could be on the hook for capital gains on the equity if you wait to sell your place for several years.
Other tips for a successful sale
Make home improvements
We get it — you want to be done with this process so you can move on with your life. But selling a home as-is often leads to low offers and, in turn, less of a profit for the seller. Do yourself a favor and spruce up your residence in advance, even if it means taking out a home improvement loan.
Ask for help
You may never experience more stress than during your divorce. That said, let others take certain tasks off your plate. This includes painting the house, preparing for an open house, and hiring a home inspector.
Continue making mortgage payments
Remember to stay on track with your mortgage payments while your home is on the market. Figure out who will be making those payments and how much of the principal they will be repaid after closing.
Keep your cool
Divorce is never fun for anyone. Yet you’d be surprised by the number of divorced couples that lose money on their homes because they failed to keep their emotions in check. Set yourself up for success by creating a plan and regularly communicating with your spouse.
Your trusted real estate team
At American Home Agents, we’ve helped countless Coloradans buy and sell homes during incredibly difficult times in their lives. Your next chapter is about to start, and we’ll be right there as you achieve your homeownership goals. Give us a call today at (303) 695-5900.