Selling a Home During a Divorce
Buying and selling homes can often be exciting and positive experiences. However, if you have to sell your family home in the case of a divorce, it isn't such a happy experience. There is a lot to consider during a divorce, such as the division of assets such as your home. Sometimes it can be painfully difficult. There are some ways to make selling your home during a divorce a bit easier.
Cooperation is Key
If your divorce is civil and amicable, and you can cooperate with each other, you will find that the division of assets, such as your house, is easier. Cooperation is key in regard to selling your house during a divorce. If you cannot agree on issues like which real estate agent to use, what price to list your home for, what price you will accept to sell your home for, the division of the proceeds, and so on, you will most likely have to wait for a court order or when the divorce is final before you sell your house.
All Owners Must Sign
If you are going through a difficult divorce and you and your spouse cannot agree on much, you may not be able to sell your home during the divorce. This is because all parties must sign the listing agreement, sales contract, and closing paperwork. You must be able to agree on which real estate company and an agent will list your home for sale. You must agree to give access to the house for showings, inspections, walkthroughs, and the like. If you are in a state that uses real estate attorneys, you will have to decide on which real estate attorney to use. Perhaps one of your divorce attorneys can do the job.
Separate or Community Property Rights
Some states have different property rights laws. Check with your attorney in regard to which type of state you live in. Some states are separate property rights states. In this case, if you owned your house before you got married, you might be able to retain the home and just split the increase in equity your house has appreciated since the date you were married. If your state is a community rights state, like here in Texas, once you get married the property becomes marital property and belongs to both of you equally. All assets that you owned before the marriage become both of yours.
Prenuptial or Equitable Property
Equitable property is a property that you inherited before you were married or was gifted to you during your marriage. Any property that fits this description is yours upon divorce. For example, if you inherited your parent's home when they passed away, it is yours upon divorce. If you had a prenuptial agreement before you got married, that legal agreement stands during a divorce.
One issue you both need to know about is how capital gains can affect the sale of your home upon divorce. As a married couple filing jointly, you will not have to pay any capital gains taxes on the first $500,000 in capital gains from your home's sale. If you are single, you are exempt from the first $250,000 in capital gains.
Quit Claim Deed
You do not always have to sell your house during a divorce. If one party wants to keep the house, the other party can always buy out the other party. For example, this may be a good idea if there are children involved and you both want them to remain in the home that they have been living in for stability purposes. You will have to agree on an amount of money and have a quit claim deed drawn up. A quit claim deed is basically a fast way to transfer property. It may get a bit more complicated than this if you have a mortgage loan, however. The party that is retaining the house may have to be approved for and obtain their own mortgage loan. It is best to discuss this scenario with your attorneys and a mortgage lender.
Furniture and Other Belongings
Another issue to consider when selling your home in a divorce situation is who gets the furniture and other belongings in the home. If you are being civil and can agree on the division of these belongings, this is the best way to go about it. If you are not able to agree on anything and the divorce is difficult, the court may order you to get everything appraised by a professional and the division of the assets mediated.
The most important thing to remember when selling your house in a divorce situation is that the more cooperative you can be, the less money you will spend on attorneys, appraisers, mediators, and the like. Emotions can get high during a divorce. You will have more money in your pockets if you can agree on as much as possible.
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