Divorce is a civil court procedure that dissolves the bonds of matrimony between two former spouses. During a divorce, courts will divide property, figure out child custody and make decisions about spousal support, among other things.
Selling a house during a divorce can become complicated and can be costly. There are many legal issues to consider, including security deposits, joint debts with your spouse on the mortgage, your spouse’s name still being on the title of the house, and what happens to it after you sell it.
If you are the one who wants to sell your house during a divorce, then there are many steps you should take to ensure that everything is legal, fair, and above board.
Below are a few legal and financial issues you should consider before putting your house up for sale to avoid future problems. A judge will determine much of what is discussed here, but these are helpful considerations.
Cancel any joint credit cards
When divorcing and selling a home, you should cancel any joint credit cards so that you can track who is making payments and how much money is changing hands.
Keeping track of all the finances during a divorce is vital to avoid future disputes.
Verify if you will be owed money after the sale
You may want to determine whether your spouse will owe you money after selling your house. If expenses were made on a credit card only in one partner’s name, that partner would be entitled to reimbursement after the sale.
If joint payments were made on a car or other forms of joint debt, then the money should be shared equally. A real estate professional or an appraiser should prepare a market analysis to determine the value.
Determine who will be paying for what
If you are married, your spouse will typically be responsible for what is owed on the house, including the mortgage. If your spouse did not work during the marriage or has very little income, consider paying for it yourself if you want to sell during a divorce.
However, remember that you will still be required to split your profits from selling with your spouse at the end of a divorce.
Time the sale with the divorce
When selling your house during a divorce, try to time the sale close to when you will be getting divorced. This will keep everything fair and above board.
There is no need to separate yourself from owning your home if you are getting divorced since it is a legal process that can last for many months or even years.
Have a financial plan in place for both you and your spouse
If you are dealing with divorce issues and want to sell your house during this time, both spouses must get an idea of what they will be doing once the money from the sale of the home has been divided. This way, you will not be faced with a surprise when dividing the money from the sale and upkeep of the house.
Decide who will get the house during a divorce
When divorce proceedings start, you must decide whether to sell it to your spouse or someone else. You may decide to sell the house as is and let your spouse pay you out of the proceeds from the sale.
Find out when the house was last updated
When your home is being sold during a divorce, it will be necessary for all parties involved to know when the last major remodel, update, or new addition was made to account for those costs after the sale takes place. This way, no one feels taken advantage of.
Spell out your intentions regarding the house in your divorce papers
If you are the one who is selling your house during a divorce, then you should make sure that your intentions regarding the house are stated in your divorce papers. This will avoid confusion and save you money by keeping the cost of the sale down.
Consider not selling the house until the divorce is finalized
You may want to wait to sell your marital home until the divorce is finalized. Until your divorce is final, you should avoid any actions that could result in problems between you and your spouse. Keeping the house neutral could help avoid problems.
Having a real estate attorney that also handles divorces can be beneficial. It’s especially vital to remember divorce laws can vary from state to state.
For example, divorce in Massachusetts may be different in California or Florida.
Selling your home during a divorce can be a stressful process that could lead to arguments between you and your spouse. To avoid any problems, it is crucial to learn what you should do before the sale of the house takes place so that you can ensure that all of your financial and legal needs are met.
Depending on what agreements have been made between you and your spouse, you may still be on the hook for certain payments and debts even while being legally divorced.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 35 years.