When a couple decides to divorce, one of the topics that will be discussed is who will get the house. Divorce is already a traumatic life event, and adding the loss of your house to the mix may be daunting.
Your home can contain a lot of sentimental value, and as much as you want to preserve it, it may make more sense to sell it.
Three Scenarios When Selling a Home in a Divorce
Most couples will face three options when selling their home during the divorce process:
- One spouse keeps the house and buys out the other party’s interest
- One spouse keeps the house for a period, usually until when the youngest child turns 18. The house then can get sold.
- The house gets sold, and the profit gets shared between the spouses.
Possible Tax Benefits When Selling a Home During a Divorce
Many people don’t realize that there are tax benefits that can come from selling a house. The Real Estate Capital Gains Tax Law allows for up to $250,000 in profit for single people and $500,000 for married couples. To be eligible, you need to have lived in the house for two of the last five years. The home cannot be an investment property and needs to be your residence.
Simply put, you can get a massive tax break if you sell the home while you’re still married. Selling your marital home allows up to $500,000 in profit to get excluded from federal capital gain taxes. The tax break applies if you file a joint tax return.
If you decide to file separately, you can still claim up to $250,000 on your tax return, but you still need to meet the two out of five years in the housing requirement.
If the parties have owned the home for a long period and there’s been considerable equity growth, there can be a sizeable tax saving. There can be quite a huge difference in tax savings if one party chooses to stay in the home but has plans to sell it in the future.
Can You Afford the Home After Divorce?
Co-own the home: If you want to keep your children in the same house, you can both stay on the mortgage. You can agree to both make payments, or the remaining spouse can make the total payments.
Take over the mortgage: If the spouse earns enough income and wants to keep the home, they can take over the loan and continue making payments. They will need to consult with the lender to refinance the house and qualify for this option first.
You can also calculate how much equity the departing spouse has in the home and either set up a payment plan or buy them out. If you choose to set up a payment plan, consult with a divorce attorney.
It’s risky and requires a lot of trust, as the remaining spouse can fall behind in payments, affecting both parties’ credit rating, as well as causing mortgage issues for both.
How to Sell Your Home During a Divorce
When selling your home during a divorce, you need to determine beforehand who gets what. Hire a qualified real estate agent to assist you since they will remain objective and will not get emotionally invested while they assist you in making the best selections for your circumstances.
When you choose an estate agent to sell your property, they can help you sell it for a fair market value, but you must listen to their recommendations. Both parties must also agree on how the sale money will be divided ahead of time. Consult with an attorney to assist you in making a decision.
If necessary, you may have to make a compromise. If you need to sell your home for less than it is worth, you will be able to get the house off your hands faster and both of you will be able to move on with your lives.
Your estate agent should get professional photographs taken of your home to make it stand out online and make your home sell faster.
When interviewing real estate agents, ensure you’re both present, as you want to know that they will be representing you both equally.
Sell Your Home for Cash Quickly Before You Divorce
If you want to sell your home quickly and avoid the lengthy process of hiring a real estate agent, we can help you. Getting divorced is already stressful enough, and having to sell your marital home can create an unpleasant atmosphere for you both.
We do our best to make the sale process go as smooth as possible by giving the best offer from the start. We save everyone a lot of time by providing the best offer right away. The chances of accepting our offer are high if we give you the best offer, resulting in a win-win situation for everyone involved.
Contact us to get an obligation-free cash offer quote. We buy houses fast no matter what condition your home is in. Divorce is tense enough, so let us take one burden from you to make your lives easier.
If you would like to discuss your situation further or need a free no-obligation cash offer, call us today at 781-309-7085!