Who doesn’t dream of happily ever after when walking down the aisle? Unfortunately, as life unfolds, it becomes tough for some people to live up to this dream, explaining why 50% of marriages end up in divorce.
Divorce can be an emotionally trying time. In addition to the stress of saying goodbye to your spouse, you need to determine who gets what among your assets.
Your house is one of the greatest assets you may have achieved together, and you need to figure out its future when divorcing.
Luckily, there are several options for your house, such as selling property before a divorce settlement, among others. Understanding each of these options is the best way to help you figure out what works best.
Are you ready to determine the fate of your house when getting a divorce? Read on for a comprehensive guide.
How Is a House Divided in a Divorce?
If you are deciding the fate of your house in court, the two main factors that determine this are the state where you live or when you got the house. Unfortunately, the decision of the court may fail to favor one or both of the spouses.
For this reason, it is always better to first try and decide this together before going to court. This helps ensure that you both get an option you are comfortable with.
What Options Do You Have for Your House When Divorcing?
Some of the options that you can discuss with your partner about your house are:
Buy-Out Your Spouse
As the name suggests, buying out your spouse means paying your spouse to walk away from the house, and you get sole ownership. In most cases, you pay them half of the current market value of the house.
However, this amount may vary based on factors like earning potential, financial contribution, and income.
Buying out your spouse can be a good idea if you remain with the kids and you feel that it is tough to uproot their already established lives. Other reasons such as being close to your workplace may also make you consider this option.
Nevertheless, ensure that you have enough to pay your spouse, not being subject to divorce. Additionally, before buying out your spouse, figure out whether you can maintain the house independently.
This includes paying the mortgage, among other financial needs in the house whose costs you previously shared.
Divide the House Among Other Assets
If you have several large assets of equal or almost equal value to your house, you can consider dividing them. For instance, if you own two houses, each of you can get one based on your needs and preferences.
Additionally, you can exchange the house for something of equal value, such as a car, among other assets.
When you choose to go for this method, first ensure that you get the value of each of your assets. Dividing these assets is easy since there are no finances involved or time spent selling.
Co-own the Home
You and your soon ex-to-be can co-own the home even if you both don’t live in this house. Additionally, one of you can live in the house, but you are both responsible for its financial needs.
This idea is recommendable when kids are involved, in which case the spouse with the kids gets the house.
However, you need to agree on how to continue paying the mortgage and handle other financial responsibilities. Failure of one of the spouses to pay the mortgage affects both your credit scores.
Moreover, discuss after how long you get to sell the house and what share of the house sales you each get after selling it.
Sell House
Suppose you are ready to walk away from everything in your marriage and start afresh; selling property before a divorce settlement could be your best bet. This way, there will be no ties with your ex after the divorce.
Additionally, you split the money you get from the sale, and you could use this money to help you in the divorce process.
If you decide to sell property, you will need to negotiate with your spouse on price, closing date, and how to slip the earnings from the sale.
What Are the Benefits of Selling Property Before Divorce?
Here are some of the benefits you can enjoy by selling your property before divorce.
You Can Share Costs
Before the divorce, you are both responsible for all the finances in the house. For this reason, you can share the costs involved when selling the house. For instance, you may need to repair the house to get it ready for sale or pay pending taxes, among others.
Reduce Taxes
Capital gains are in your favor when you are married than they are if you are single. You have the benefit of capital tax exemptions when you are married.
Additionally, you can exclude about $500,000 of the home equity from capital gain tax.
This leaves both of you with more cash that you can put in other divorce expenses, not to mention settle down in your new home.
You Have Enough Money for Your Divorce
Are you running out of money to help you finalize your divorce process? If yes, you have a solution by selling your property.
If you can complete the process within a short time, you can use this amount to help you finalize your divorce faster. Moreover, remember you have a new life ahead, and you will need money to help start you off.
It Makes It Easy to Move On
This house is probably one of the places where you shared many memories and had significant milestones with your spouse. For this reason, continuing to live in the same house after divorce may make it hard for you to move on.
Additionally, if you wait until after the divorce to sell it, you might remain attached to your ex for longer than you expect. Therefore, selling the house before divorce settlement will improve the emotional healing process and make it easier to move on.
Process of Selling Property Before a Divorce Settlement
The house selling process is never a walk in the park, especially if you have other serious issues such as a divorce settlement to think about.
Thankfully, you can make the process as easy as possible and spare most of your energy to deal with the divorce. You can do this by:
Determining the Value of the House
Meet with your ex-spouse-to-be and determine how much the house is worth based on the current market value. Set the ideal price that you can sell the house for and the lowest you can go.
Additionally, determine some of the improvements you can do in the house to help you improve its value for a better selling price.
Get a Real Estate Agent
A real estate agent is paramount when selling a house, especially if you are not on good terms with your spouse. This agent will help you get the best value for your house and advise you on making the house sell faster.
Additionally, they will help you get a reliable buyer who can close the sale within the shortest time possible.
Sell the House to As-Is Home Buyers
As-is home buyers are a heaven-sent option when you are in a situation such as a divorce. The truth is, during the divorce, you don’t have much time and money to focus on the sale of your home.
Moreover, it may be tough for you to meet your spouse to talk about home selling issues, such as the repairs needed. In this case, the as-is home buyers will help you complete the house sale within days, and you can get back to your divorce.
These buyers are beneficial because:
i. You don’t need to make any repairs to the house. You can spare your money and energy to deal with the divorce and not repair a house that you will not be living in.
These buyers won’t run away from necessary repairs when selling the home. Additionally, cleaning the house before the sale is unnecessary.
ii. You close the deal faster. You don’t have to wait for months to get the cash from selling your property.
You receive a cash offer within hours and close the deal within days. This way, you get the money to help you with the rest of the divorce processes faster.
iii. You don’t need to hire a real estate agent. It is possible that you already have a divorce lawyer and, therefore, hiring a real estate agent will be an added expense.
Luckily, you don’t need to have a real estate agent when selling to an as-is buyer since the process is easy and hassle-free.
Should You Sell Your Property Before the Divorce Settlement?
Generally, there is no best time to sell this asset where you have had some of the best moments of your life.
Nevertheless, it makes the most sense if you consider selling property before a divorce settlement.
Contact us for a simple and hassle-free home selling process during this stressful divorce process.