There’s no right answer when it comes to whether to sell the house because of divorce.
Some say you don’t want to be “stuck” with the home, because it means you’ll get fewer of the other marital assets, and these assets may be more liquid, may have fewer costs associated with them, and may appreciate more quickly in value.
Others say keep the house if you can. It’s where the children are established. Divorce creates enough change for you and your family without adding a move. Besides, it could actually be more expensive to rent, or to buy another house when you may have less equity after the marital property is divided to put into a new home.
Conventional wisdom is not very helpful. The decision to keep or sell the marital home because of divorce is unique to every family.
Ideally, though, the decision whether to sell or not should be part of the entirety of the legal and financial planning that goes into how you will divide the marital property and assets, and how you will pay your ongoing expenses after separation and divorce. Good collaborative divorce attorneys can be a critical resource during this decision-making process.
Assuming the decision is to sell the house, the primary things to consider are: (1) when to start marketing the house, (2) how to share the financial and time commitment for selling the house, and (3) closing the sale.
When to Start Marketing the House
The first step should be to decide upon a real estate agent who will care about both spouses equally and who will make recommendations without being partial to either party. An experienced, professional realtor like Armand Lenchek in Orange and Durham Counties or Linda Craft & Team in Wake County can help resolve issues throughout the selling process for couples who need to cooperate in the sale of the home, even as they are divorcing.
The timing of when to list the home will depend on a number of things:
- Will the couple begin to live apart and begin the separation period only after the house is sold?
- If the couple is already living apart how much financial strain is the mortgage placing on the family finances?
- How does the sale fit into the couple’s long-term legal and financial plan for dividing the marital property and covering monthly expenses?
- What does the real estate agent familiar with the local market say about timing and maximizing the price you receive for the property?
How to Share the Financial and Time Commitment for Selling the House
A good realtor can tell you when to put money into the house to prepare it for sale because the increase in the sales price will more than repay the expense. During divorce, it’s especially important to have a reliable and trusted real estate agent to provide this advice to limit conflict. Often these expenses are reimbursed out of the sales proceeds to the spouse who was out of pocket.
The spouse that is living in the house inevitably gets stuck with the chore of keeping the house show ready. But responsibility for coordinating the recommended repairs and up fits can be negotiated.
Closing the Sale
Most home sales involve some back and forth negotiations with the potential buyer. Your real estate agent handles these negotiations on your behalf, but you must decide which offer to accept and whether to counter-offer. During divorce, two spouses may, not always, but may have different interests. One spouse may be interested in selling the house quickly and having the cash proceeds. The other spouse may be interested in maximizing the price and waiting for a better offer. A separation agreement prepared in the collaborative divorce process will anticipate whether this is a possibility and may include conditions under which an offer must be accepted and when the asking price must be reduced so that there is minimal conflict at the time of closing.
Once an offer is accepted and a closing date is set, both spouses will need to be at the closing to sign documents.
If there is a separation agreement by the time of the house closing, it should instruct the closing attorney how to divide the proceeds to each spouse. Be certain to send that portion of the separation agreement to the closing attorney in advance of the closing date, so that checks can be written accordingly.