Deciding what to do with the marital home is one of the most challenging parts of a divorce. Not only is the situation emotionally charged by the circumstances, but the home itself carries sentimentality and enormous value. It can feel like you’re alone in an impossible situation, however, help is available.
There are actually real estate agents specializing in divorce who navigate the details and roadblocks of selling joint property dozens of times every year. Some agents even get a special Certified Real Estate Divorce Specialist designation which involves special training in tax issues in the sale of the family home, alimony and child support, divorce and pensions, and bankruptcy.
If you’d like to partner up with a Divorce Specialist or agent with a proven track record of satisfied divorce clients, HomeLight can help connect you with a top agent in the area who best suits your needs.
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Meanwhile, we asked real estate divorce specialists: What are some of the top things you always advise divorcing clients? And they gave us these words of wisdom. Now’s your chance to soak up some of this free advice and learn how to get a handle on this collision of stressful life events.
1. “Pick a divorce specialist agent that both spouses can trust.”
Nothing will leave you feeling more isolated, alone, and backed into a corner than trying to get the house sold during your divorce with an agent who doesn’t feel like an ally.
And if you hire someone you trust—but your ex-to-be doesn’t—the entire process becomes an endless battle with no winners.
“A home sale during a divorce is different than a traditional sale because of the type of communication that you need to have with your clients,” says Dawn Fore, a Divorce Specialist and top-selling real estate agent in Houston.
“You’re typically communicating with each spouse separately, but sometimes you have to pull them together to make decisions during this very emotional, painful situation. So both homeowners have to trust you.”
However, likeability and trustworthiness aren’t the only qualities you need to seek. You also need an agent who has the knowledge and experience to handle the complexities of a divorce home sale.
Not only do divorce specialist agents have the training to handle the emotional conflict of a contentious home sale, they also know how your state’s property division laws apply to your unique situation.
2. “Fighting about the home sale will cost you both time and money.”
When you’re dividing up your most valuable shared asset, there’s an endless list of decisions to bicker about—especially when you’ve both invested a lot of time and money in the home.
Maybe you’re battling over who gets to keep the house, or how much your spouse needs to pay to buy you out.
Or perhaps you’re prepping to sell, but you can’t agree on which repairs and upgrades to make before listing—and who’s going to pay for them.
Then, just when you’re nearing the finish line, you and your ex-to-be disagree over which offer to accept or which buyer concessions to make.
Whatever the issue, neither party wins in the long run when you and your spouse fight about the home sale.
“Just remember that every argument and disagreement during the divorce is costing you money. A lot of times, only one spouse is giving me 100% effort and the other party is working against us,” says Fore.
“And if one spouse is fighting the home sale every step of the way, the divorce attorney may need to get a court order to move the home sale forward—which will cost you.”
Every time your divorce attorney needs to negotiate one of these little skirmishes, they’re going to charge you—and adds up fast at an average rate of $250 an hour.
But maybe your spouse is the one paying the divorce attorney, so you’re only too happy to rack up the bills. Well, if your spouse can prove that you’re purposely dragging out the home sale to delay the divorce, the court may order you to pay your ex’s attorney fees.
3. “Accept what the numbers are telling you when you get an offer.”
A spouse determined to finalize the divorce as swiftly as possible will do anything to get the house sold—including accepting any lowball offer that comes along.
However, just because an offer isn’t quite as high as you expected, doesn’t mean it’s a bad offer—and turning it down may not be the smart play.
Instead of worrying about why your ex wants to accept or turn down an offer, you need to do the math and let the numbers tell you what to do.
“When the couple is determined to disagree over an offer, we go through the numbers very carefully,” explains Fore.
“For example, if it’s less than one party wants, we talk about what it’s going to cost to hold onto the house if we don’t take the offer that we have on the table. If they continue to fight each other, that’s not going to give them a financial advantage in the long run.”
In some cases, it may actually save you money to accept a slightly lower offer sooner than to wait several months for a higher offer that may never come.
4. “Only one spouse should remain living in the house when you’re trying to sell.”
If you’ve read the book or watched the film based on the Warren Adler story “The War of the Roses,” you know that living with your spouse while you’re in the midst of a divorce is a terrible idea that’s practically guaranteed to end badly.
It’s 10 times worse when that divorcing couple is engaged in a battle royale over the sale of their home.
“The home sale is always smoother when both spouses can agree that the house is going to show better and sell quicker if one party has already moved out,” advises Fore.
“Because, if the spouse currently living in the house doesn’t want to do anything to get it ready to list, selling the home becomes that much more difficult.”
When possible, it’s best if one spouse remains in the house until it sells—preferably whoever is willing to put in the necessary time, effort and money required to get the home sold fast and for as much money as possible.
That way, the agent is dealing primarily with one party to make all those little decisions, such as making little repairs and improvements, or scheduling showings.
However, just because it’s best that one spouse moves out, doesn’t mean that you should both vacate the property.
Vacant houses typically take longer to sell and receive lower offers because the rooms look smaller than they actually are, and empty rooms leave only the flaws to draw the buyer’s focus. Plus, you’ll have to pay for special vacant home insurance as empty properties attract crime.
If both spouses refuse to move out and the battle over the home gets so bitter that the court orders everyone out of the house before it sells, then you’re either going to have to spend money on staging the empty property or settle for less money.
5. “Consult a tax specialist to preserve the home sale proceeds.”
Not many soon-to-be-newlyweds are thinking about the tax benefits of marriage when they’re about to tie the knot. However, you definitely need to consider them when you’re trying to decide what to do with the house when you’re getting a divorce.
“Divorcing spouses should consider how they’re going to file their taxes for the year when they’re deciding on if and when to sell the house,” advises Fore. “Because there are different tax implications if they’ll still be filing jointly, or as separate households.”
For starters, these marital tax breaks are a strong argument for selling the house before the divorce is finalized, rather than buying one spouse out and keeping a large, expensive house.
However, if you buy out your spouse and keep the expensive property, it’s a different story. Your ex will avoid paying capital gains tax on any home equity received because it’s part of the divorce settlement.
But when you’re finally ready to sell the house, you’ll probably have to pay some capital gains tax if your net proceeds exceed $250,000, which is the exclusion limit for single filers.
And this is just the beginning of the tax implications that impact if and when you sell the house.
You’ll also need the help of a certified tax specialist with divorce tax experience to help you navigate how mortgage interest and real estate taxes will impact your divorce.
For example, if your divorce is scheduled to finalize in December, it may make sense to delay until January 1st. You see, the IRS looks at your marital status at midnight on December 31 to determine your household status for the year.
So if your divorce is finalized in December, you’ll need to file as a single, head of household for the whole year—even if you were married for most of that time.
If you wait just a day or two to finalize in early January, you can take advantage of the marital tax breaks one last time.
6. “If you’re keeping the house, remember to remove your ex from the deed.”
While there are plenty of emotional and financial reasons to sell the house during your divorce, in some cases it may make sense to stay put and buy your spouse out.
If you are able to qualify for a mortgage with your solo salary, and your spouse agrees to a reasonable buyout amount this can all be handled as part of the divorce proceedings.
However, don’t assume that the transfer of ownership is official until you see it in writing—even after you’ve signed your divorce papers.
“Just because you get a final divorce decree doesn’t mean everything’s done,” explains Fore.
“After the divorce is final and the decree indicates which spouse gets the house, then your attorney must prepare paperwork to remove the other spouse from the deed. If this doesn’t happen, it’ll cause problems down the road when the spouse who kept the house finally decides to sell.”
While divorce decree says who gets the house, it does not legally transfer the property. So you need to make sure the property is solely in your name or you may have trouble selling it in the future.
Whether you’re able to transfer ownership with a simple quitclaim deed or your complex divorce settlement requires more extensive paperwork to complete the transfer, you need to make sure it’s completed as soon as the divorce is settled.
Selling a house as part of a divorce is difficult in the best of circumstances. And as tempting as it is to use the home sale to frustrate, attack, or get back at your ex, in the end you’ll only hurt yourself.
However, with some good advice and the help of a divorce specialist agent you can transform your contentious home sale from stormy seas to smooth sailing.
Article Image Source: (Matthew Addington/ Death to the Stock Photo)