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Disclaimer: This blog post is meant to be used for educational purposes only, not legal advice. If you need assistance navigating the legalities of keeping or selling your home in a divorce, HomeLight always encourages you to reach out to your own advisor.
Deciding what to do with the marital home is a challenging part of every divorce where real estate is involved. Not only is the situation already emotionally charged by the circumstances, but the home itself carries sentimentality and enormous value. While it can feel like you’re alone in an impossible situation, 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 certified, which involves special training in understanding tax issues in the sale of the family home, alimony and child support, divorce and pensions, and bankruptcy.
In this guide, we’ve done the research and asked Dawn Fore, a real estate divorce specialist and top-selling real estate agent in Houston: What are some of the top things you always advise divorcing clients? And she 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 Fore. “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.”
There are a few different types of certifications and training for real estate agents to specialize in sales due to divorce, but the most common certification is the Certified Divorce Real Estate Expert (CDRE), such as the program offered by the Ilumni Institute.
An agent with the CDRE designation has received specialized training in the following areas:
- Tactfully handling the emotional conflict of a contentious home sale, including keeping the process civil and in everyone’s best interest
- The pros and cons of selling the home or having one person keep the home and buy out the other
- Family law with regard to real estate
- The overall process and timelines of divorce proceedings
- Tax issues regarding the sale of a marital home, including whether the home was purchased prior to or during the marriage
- Considerations for how alimony and child support may impact any real estate decisions
- Considerations for how pensions, bankruptcy, and related financial situations may impact any real estate decisions
- Determining the market value of property in a divorce
- Ways clients can avoid adverse effects on future finances
- How your state’s property division laws apply to your unique situation
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.
2. ‘Fighting about the home sale will cost you both time and money.’
When it comes to dividing assets, often the marital home is one of the most valuable assets. But where bank accounts and 401k’s can literally be split in half, that’s a lot more tricky to do with a home.
Contention and disagreements about the best way to move forward are all but inevitable. Some of the more frequent arguments include:
- Whether to sell the home and split the proceeds, or have one person keep the home and buy out the other
- If one person is buying out the other, whether there are enough other assets to cover the equity owed to the person moving out or if there needs to be a cash-out refinance
- If the home was purchased prior to the marriage, how the equity balance should be determined where it isn’t equal
- If selling, trying to figure out which repairs and upgrades to make, and who’s going to pay for them
- If selling, agreeing on 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 — which adds up fast at an average rate of $270 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 may do anything to get the home 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.”
HomeLight’s Simple Sale can help you receive a cash offer fast and avoid the potential disagreements and strain the home-selling process may add to the already stressful divorce.
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. 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.
- Dawn Fore Real Estate AgentCloseDawn Fore Real Estate Agent at RE/MAX Universal Currently accepting new clients
- Years of Experience 33
- Transactions 906
- Average Price Point $263k
- Single Family Homes 896
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.”
There are multiple reasons for having only one spouse live in the home during the sale:
- The person with more at stake (if any) can remain to ensure the sale goes smoothly
- Scheduling showings is significantly easier with only one person
- The agent has one point of contact for small decisions about repairs and improvements
However, just because it’s best that one spouse moves out doesn’t mean that you should both vacate the property.
There are multiple reasons not to sell the house while it’s vacant:
- Vacant houses typically take longer to sell
- They receive lower offers because the rooms look smaller than they actually are
- You may have to pay for special vacant home insurance as empty properties attract crime
5. ‘Consult a tax specialist to preserve the home sale proceeds.’
Most engaged couples are too infatuated with each other to really think about the tax benefits of marriage. However, when the infatuation is gone and divorce is nigh, couples should definitely consider the tax implications of the various ways to divide the home equity.
“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.”
Hiring a certified tax specialist with divorce tax experience can:
- Help you navigate how mortgage interest and real estate taxes will impact your divorce
- Help with the timing of the sale to avoid paying capital gains tax (you can exclude up to $500,000 of the proceeds as a married couple)
- In the case of a buy-out, help the person receiving funds to avoid paying capital gains tax on any home equity received because it’s part of the divorce settlement
- Help with fringe cases, for example, for end-of-year divorces knowing whether filing in the current year versus the next year has tax benefits in terms of the filing status
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’re 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.
“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.”
The divorce decree doesn’t legally transfer the property. In most cases, you can transfer ownership with a simple quitclaim deed, though others may require more extensive paperwork to complete the transfer.
In any case, you need to make sure it’s completed as soon as the divorce is settled.
Bottom line: Listen to the experts to avoid any pitfalls
Selling a home as part of a divorce is difficult even in the best of circumstances. It is fraught with pitfalls that can significantly complicate the process, costing thousands of dollars in extra legal fees and adding months to the timeline.
However, by taking these tips to heart and following the advice of a divorce specialist agent, you can transform your contentious home sale from stormy seas to smooth sailing.
HomeLight can connect you with a Certified Divorce Real Estate Expert in your area or a top agent with valuable experience helping couples successfully sell their homes due to divorce.
Christine Bartsch contributed to this story.
Header Image Source: (Matthew Addington / Death to the Stock Photo)