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Selling a house during a divorce is one of the most challenging and emotionally taxing aspects of an already difficult process. The marital property, a place filled with memories, suddenly becomes another marital asset to be divided during divorce proceedings. It can add significant stress to an already fragile situation.
Acting fast is critical. Here’s why:
Selling for cash before the divorce is finalized puts you in control of the home sale outcome.
It's the most common path for many divorcing couples. Selling the house and dividing the net proceeds offers a clean financial break and liquidity. It lets both parties move forward independently.
Con: This option involves the entire traditional sale process, such as finding potential buyers. It can be fraught with its own obstacles, especially when there's no mutual agreement between divorcing spouses.
A buyout is a viable option in situations where one spouse wishes to remain in the family home. It involves one party paying the other spouse a lump sum for his/her share of the marital assets. This option requires refinancing the existing mortgage into the sole owner's name and obtaining a professional appraisal from an experienced real estate agent to determine the home's current market value of the assets acquired.
Con: It's only feasible if the spouse keeping the house can financially afford the new loan and the buyout amount.
Some divorcing couples opt to co-own the house post-divorce. It might happen to let children finish school without disruption or to wait for more favorable home market conditions to sell.
Cons: Co-owning a home means both parties remain financially tied and are responsible for mortgage payments, property taxes, maintenance costs, and potential property dispute issues.
Avoid the conflict and uncertainty inherent in a traditional divorce sale. iBuyHomes offers a definite, superior solution designed to alleviate the pain points of selling a house during a divorce. Here are the steps:
Yes, if divorcing spouses can’t agree on how to divide the property, the court may order the sale of a house during divorce proceedings. This is often referred to as a partition sale.
The home’s value is determined by a professional appraisal. Both parties may agree on a single appraiser or each may hire their own, with the court making the final decisions if there’s a significant discrepancy. This valuation is crucial for determining equal distribution.
It depends on your specific situation. If you sell before the divorce, you can provide clear financial figures for the property division, simplifying the divorce settlement. It can also help avoid future disputes over mortgage payments and maintenance. On the other hand, if you sell after divorce, you allow for more time and better market conditions. But it can also prolong financial ties between former spouses.
The IRS offers an exclusion from capital gains tax for profits made from the sale of a primary residence. In a divorce, if one spouse moves out, they may still be able to claim their share of the exclusion if they meet certain criteria about ownership and use of the property as their main home, according to the IRS. It’s highly recommended to consult a financial advisor or tax professional to understand the specific capital gains implications for your situation.
Financial considerations would include the division of marital assets, debts, spousal support, and child support. You also need to understand the distinction between community property states and equitable distribution states. In community property states, assets acquired during marriage are split equally. A family law attorney and a financial advisor can help in navigating these complexities.
