For most of us, a house is the biggest purchase we ever make. It’s a huge commitment in money, time, resources, and emotions. Because it’s the most valuable thing we own, it often becomes a big issue in ending a marriage. The question often comes up of whether or not to sell your home during a divorce.
Should You Sell Your Home During Divorce?
Many reasons exist to hold onto a house. Some are emotional. You put a lot of time and energy into the home and feel a deep connection. That’s often difficult to leg to go of. Others are practical. It often helps maintain continuity for the kids. You may view it as an investment, especially with current real estate prices.
This situation generally plays out in one of three ways.
- First, one party buys out the other and keeps the house. That’s fairly straightforward.
- Second, if there are children, the custodial parent stays in the home, usually until the youngest child turns 18, and then they sell the house.
- Third, the couple sells the house immediately and divides the profits.
Whatever your situation, eventually, the question will come up of whether or not to sell your home during a divorce.
Cases, of course, vary a great deal from one to another. No two are alike. You should ask yourself a number of questions when deciding whether or not to sell your home during a divorce.
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Factors to Consider When Deciding to Sell Your Home
While far from exhaustive, these are a few questions you should ask yourself in this situation.
What’s The Market Like?
One consideration that impacts whether to sell your home during a divorce is the market. The real estate market fluctuates and varies from one location to the next. Sometimes it’s hot, other times it’s cool.
- Do you live in a buyer’s or seller’s market?
- Can you get market value?
- Will you bring in more than you owe on the mortgage?
All of these are important questions to ask. You may or may not be able to sell your house in the first place. Even if you can, the process takes time.
Beyond that, you may not be able to sell it for the price you want. In far too many cases, homeowners rush to unload a house as fast as possible for unfavorable prices.
You don’t want to sell your home during divorce and take a loss if you can avoid it.
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Are You Better Off With Other Assets?
Because a house is such a big piece of the financial puzzle, it’s easy to focus on that. It’s not the only piece, however.
In some cases, you may be better off letting it go in favor of taking other assets in the settlement.
Getting the house seems like a big victory, but it also raises other issues. You have to maintain it, pay property taxes, and more.
If you ultimately decide to sell it down the road you face capital gains taxes if it increases in value. And by focusing on one big thing, you may miss out on other financially or emotionally valuable assets.
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What Are The Benefits Of Selling?
When deciding whether or not to sell your home during divorce, it’s important to do a quick cost-benefit analysis. In short, do the benefits outweigh the costs? Consider what you gain by keeping or selling the house.
Divorcing couples often want to make a clean break. Unloading a shared home, one with lots of emotional baggage certainly accomplishes this.
You also free yourself from a major financial burden. In the right circumstances, you may sell your home during divorce and make a tidy profit. That helps offset some of the other costs or even helps start your new life on the right foot.
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Do You Want To Live There?
A good question to ask before you sell your home during divorce or not is whether you even want to live there?
Lay out your reasons and determine if you really want the house or not.
Do you want the house simply to keep it from your soon-to-be-ex? Is the house too big for you? It’s incredibly important to be honest with yourself. It may be best to break ties and sell your home during a divorce.
There are plenty of legitimate reasons to want to stay in a residence. Maybe it’s your dream house or the only place you’ve ever felt truly at home. If it’s where you raised your kids, maybe you’re not ready to let those good memories go yet. Some people simply hate moving.
But again, whatever the circumstances, it’s important to be aware of the whys.
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Can You Afford to Keep the House?
Maintaining a house is expensive. With all of the financial changes you go through in the process of ending a marriage, you have to consider whether or not you can realistically afford the cost.
Your tax status shifts and you may have child support or spousal support payments. Those are all new monetary obligations. Add to that, you may have to pay the mortgage, property taxes, maintenance, and bills from a single income for the first time.
As much as you may want to remain, your financial situation may dictate otherwise. Once you examine the harsh economic realities, you may have to sell your home during a divorce.
It’s often difficult to let go and sell a home during divorce, but it’s also often the best choice. Don’t think of it as an end, but as a beginning. Now you have the opportunity to start fresh and make new memories.
You can find a house that better fits your needs, move to a neighborhood where you’ve always wanted to live, or just relax knowing there aren’t painful recollections lurking in every corner.
However it plays out, whether you sell or don’t, you have a number of big questions to answer.
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