When you divorce, your family home may be your most valuable marital asset — as well as your biggest shared liability if you’re still carrying a mortgage. What happens to the house in a divorce? Divorcing spouses have a number of basic asset division options for their home, including:
- Allow one spouse to takes ownership of the home and buy out the other spouse’s share of equity.
- Sell the house during the divorce process and split the equity.
- Sell the home within a certain number of years after the divorce to take advantage of improvements in the real estate market or other personal factors, such as selling the house after minor children turn 18 years old.
Each of these options involves detailed provisions that are unique to your own situation and will need to be worked out as part of your divorce decree.
Some couples who want out of their marriage as quickly as possible may be tempted to stick a “For Sale” sign in front of their home and accept whatever offers come their way. On the other hand, other couples, or one spouse in particular, may want to invest in “curb appeal” projects that home owners typically undertake before putting their home on the market, including fresh paint in rooms, making roof repairs, or adding gardens and other landscape features.
Unfortunately, this may lead to conflict as couples struggle to figure out the answers to such issues, who is going to pay for these repairs and projects — and who is going to complete them if you can’t stand to be in each other’s presence? Other issues that come up include arguments over an acceptable selling price, who will live in the house until it is sold, and who will the point person for contact with the real estate agent?
A recent article in the New York Times highlights real estate professionals in New Jersey who have carved out a niche representing divorcing home sellers. While it may be helpful to work with a Realtor who has experience helping divorcing couples through the home sale process, there are many things you can do right now to make the process a little easier.
3 Steps to Selling Your Home in Divorce
Create Master List of Home Repairs: Make a list of all home repairs that would be helpful to have completed before putting the house of the market. Show the list first to your spouse and discuss how these costs could be split, and why they are important. Often, couples can come to their own agreement on home repair or curb appeal costs, since in the long run, they can help to boost selling price.
If your spouse needs some motivation, ask a Realtor to come up with a market analysis of your home “as is” versus what the expected selling price of the home would be after repairs. If your spouse still won’t budge, you may need to scale down your list. It is also critical to make your divorce attorney aware of your home-selling situation to see what he or she suggests, especially if you or your spouse has abandoned the marital home. Have your attorney review your cost-sharing agreement prior to signing.
Look at your home from the buyer’s point of view: If your spouse has moved out, large gaps in rooms where one spouse has removed furniture, or large stacks of packed up belongings, can be obvious giveaways of a family in crisis. For buyers, this may translate into low-balling offers to take advantage of an obviously distressed situation.
How to avoid this “fire sale” pitfall? Go room by room and look at your home through the eyes of potential buyers. Is your family room missing a TV and couch? See what other furniture you have in your home and think creatively about to still give this room a homey feel. Maybe you have an old sofa in the garage that you can slipcover to make look like new, or you have a flatscreen computer monitor that can cleverly double as a TV during open houses. Ask friends and relatives for items they might have to lend that can make sure your house look comfortably lived in.
Neutralize the look of your home: If you and your spouse are still living together for economic or other reasons, it may be apparent to buyers as soon as they step in the home if they see things like hastily made partitions between rooms. Do your best to “neutralize” the look of the home until after the sale. If you do need to keep some distance, try to make partitions moveable and kept out of sight during home showings. For example, instead of plywood partitions, try curtains on pressure rods that can be quickly taken down when it’s time to show the house, and then put back in place afterwards. [See more tips for living under one roof as you divorce.]
Is your spouse reluctant to sell? Early on in the process, make your spouse aware of just how much money you can both get for your home if you are able to sell it for top dollar. Oftentimes, a spouse seeing how he or she can benefit, perhaps greatly depending on the worth of your home, makes cooperating and working on selling your home that much easier.
Have questions about divorce and the best asset division strategy for your home? We’re here to help. Please contact us today to schedule your free consultation with one of our experienced family law attorneys and get answers and a clear strategy for safeguarding your children. Call us at 888-888-0919 or please click the button below.