Selling Property During a Divorce
Divorce is hard enough. If you need to sell your home during or after a divorce, hire an expert who specializes in helping divorcees sell their homes. This will make it easier on everyone and help you get the most out of your property in a very timely manner, allowing you to move on with your life quickly and with the least pain possible. As your Divorce home sale specialist, we are here to help.
Preparing The Home For Sale
Preparing the home to sell is a tough venture that stirs up so many emotions anyway. Add a divorce to the mix, and it’s exponentially tougher. Therefore, in selling the home and splitting the proceeds, it’s important to remember to think with your head and not your heart. This will help you get through the process faster and with minimal pain.
If possible, remove as much as can be removed from the home, declutter, and then take a hands off approach by getting your real estate professional to do the rest. This will minimize the emotional pain. Make sure that if one spouse is moving out, they take everything they want at the time they’re moving out instead of planning to come back for the rest. This will help the decluttering process and make it emotionally easier for both parties involved.
Negotiating the Numbers
Hiring a real estate professional who specializes in divorce will pay off when it’s time to agree on the numbers involved in selling the home. You can feel more at ease that a professional is involved when it comes to the list price and negotiations. As a part of Keller Williams, we’re able to act as a single agent with fiduciary duty, meaning the agent is legally obligated to act in your best interest and get the most possible for both of you. This being the case, it will make life much easier if both spouses can agree to let the real estate professional determine the numbers as much as possible.
As a single agent and fiduciary, you know you’ll be able to hold your agent accountable to be completely loyal, maintain full confidentiality, do everything both spouses agree on, and provide full disclosure of everything, in addition to the normal real estate transaction details. Avoid working with agents who are only permitted to act as a transaction broker, meaning they can’t legally act as your fiduciary and you won’t be able to hold them accountable to do so.
In addition, your agent should be well practiced at working with both people without taking sides and moving efficiently to help both sides come to agreement on listing price and how to negotiate when offers are made. Just remember, everyone wants to get the most out of the sale of the home so they can take their portion of the proceeds and move on. Thinking with your brain instead of your heart here will get you on the road to starting your new life much faster and with minimal pain.
After the Property Is Sold
Once the property is sold, each person will be eligible for a capital gains tax of up to $250,000 as long as the home was your principal residence, meaning each of you lived there for at least 2 of the last 5 years prior to the sale. That is why it may be beneficial to both sides to sell the home within 3 years of moving out of the home. If one person moves out while the other stays in the house, it’ll be important to both agree that one will be granted use of the property under a divorce or separation instrument. Then, the spouse who leaves can still consider the property as his or her main home for tax purposes as long as the other spouse is still living there. So, when the property sells, you can provide the supporting documents to the IRS and both spouses can avoid paying tax on up to $250,000 of profit from the sale.
As an alternative, one spouse can buy out the other’s share of the house. It’s important to get a good broker’s price opinion from your real estate professional and then work together to agree on the buyout price, which does not necessarily need to be half of the property value. It can by any amount that works for both parties considering all assets being divided. In general, you don’t have to pay taxes on any gains or losses you have from the buyout. Just be careful that if you’re the spouse moving out and the home is refinanced for the remaining spouse, then make sure to get in writing that the mortgage was paid off so you can prove you’re not liable for that debt.
No matter what you decide to do with your property as you move toward starting your new life, we’re here to work with you and help you every step of the way.
Just a note that this is intended to be helpful and general information and should in no way be seen as legal or accounting counsel. You should consult your attorney and accountant as needed for advice on your specific tax and legal situations. We are here to work with your team of professionals to help you with the most optimal solution for your real estate needs.
Contact Liz today and schedule a free consultation: 941-677-3442