Selling the House During Divorce: Everything You Need to Know
As a couple goes through the process of a divorce, deciding what to do with the marital home can be tricky. Sometimes one person may wish to keep the house by buying the other spouse out, or they may decide to keep the home and sell it after the divorce is finalized. Other couples, however, choose to sell their home during the divorce.
Why do some choose to sell?
There are benefits to selling the house in the midst of the divorce process, both financially and personally. The profit gained from the sale of your home might provide each spouse with a solid foundation to start anew. Selling the marital home and eliminating that shared investment can also help to provide closure in a legal and emotional aspect. Choosing to sell before the divorce is finalized can also help provide each party with the means to deal with other financial responsibilities and debts. Also, couples often decide to sell their home because it will no longer be affordable to keep it after they have separated.
Preparing to sell
Before you sell your home, consider the many choices and responsibilities headed your way. Some homes may require maintenance or updating before they are ready to sell, which takes money, time, and requires some decision-making from you and your soon-to-be-ex. Prepare yourself for these discussions by discussing your priorities with your divorce attorney and be sure to check in with your attorney before final decisions are made.
If you choose to work with a real estate agent, you and your spouse can share the agent since you are both moving towards the same goal and having someone to work on your behalf can make the process easier. Going over these key factors with your spouse before they come up can help avoid arguments in the future and can take a substantial amount of stress from your shoulders.
Sit down with your spouse and discuss the pertinent matters dealing with the sale of your home.
Does the house need work before it is ready to sell? Discuss what you will need to do and who will pay for it.
Will one spouse continue to live in the home? Decide if the residing spouse will pay the entirety of the mortgage and price of upkeep, or what the non-residing spouse will contribute.
Who will be responsible for preparations for sale and showing the house? Discuss who will be present for showings, or if the agent will handle everything in this regard.
Accepting an offer
One of the biggest decisions in the sale of your home is how much you will ask for it. Discuss your asking price with your spouse and your real estate agent. Settle on a price both of you are comfortable with, or, if you cannot agree, remember to trust in the opinion of your agent. You should also discuss this with your divorce attorney.
Once the offers begin coming in, get ready to have some serious discussions with both your spouse and agent, as well as your divorce attorney. If there are disagreements about whether to accept or decline certain offers, seek advice from your attorney and your real estate agent for advice in order to avoid unnecessary contention. Remember, this is what they are there for.
Fortunately, some divorcing couples may not find selling a house together too difficult because both spouses ultimately want a timely, profitable sale.
Dividing the profit from a home sale
When it comes time to divide the profit made from the sale of your home, be sure to consider how your state handles property division. Washington is a community property state, which means everything purchased or otherwise obtained during the marriage is considered equally owned by each spouse. This means the house you lived in as a married couple belongs to both spouses, regardless of the name on the deed. There are some exceptions, like if the house was appointed to one person in a prenuptial agreement, but, for the most part, the house is a shared asset. As a shared asset, the responsibility during the preparation, sale, and the resulting profit should be split between both parties in an equitable manner.
The way in which expenses and profits associated with the home are split may vary. For example, if one spouse contributed more to the mortgage or financial upkeep of the house during the marriage, he or she may be awarded a larger portion of the sale. Or, if one spouse is keeping other large assets, more of the profit could be awarded to the other spouse. Your attorney should help you negotiate how proceeds from the home sale should be divided.
If you are going through a divorce, contact McKinley Irvin at our Washington office with any questions regarding property division or the divorce process.